The idea that the ability to collect taxes is the source of a currency’s value.
- “Fiat money has exchange value because it has sovereign power to tax economic activity paid for with the currency it issues.”
Chartalism Chartalism - Wikipedia
In macroeconomics, chartalism is a heterodox theory of money that argues that money originated historically with states’ attempts to direct economic activity rather than as a spontaneous solution to the problems with barter or as a means with which to tokenize debt, and that fiat currency has value in exchange because of sovereign power to levy taxes on economic activity payable in the currency they issue.
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