Do People Value Money Because They Need It to Pay Taxes?

[@-whackd]

I have a friend who doesnt pay taxes and he still seems to value money. He especially values money and private exchanges between himself and others where taxes arent paid, and seeks out that kind of employment and farmers / retailers to buy from.

[@zg-it]

I have that same friend too ;) ;)

[@bentuovila5296]

This isn't the guy at the corner with the god bless sign is it?

[@snex000]

He values that money because others value it, because they do pay taxes...

[@joeblow3990]

If your friend owns a house and he does not pay taxes...the government can come after his house. Not sure how smart the decision not to pay taxes really is.

[@MBarberfan4life]

MMT---not modern, not monetary, not a theory.

[@CarrotCakeMake]

"When plunder becomes a way of life for a group of men in a society, over the course of time they create for themselves a legal system that authorizes it and a moral code that glorifies it" Frederic Bastiat

[@Oatriumph]

My favorite part of the Law is when Bastiat discusses how when the State perverts justice, it forces the people to either reject the law or reject their own morality, both, he claims and I agree, are bad choices.

[@seansingh8862]

If the term "Murphy's Law" wasn't already taken, it would be the principle that "whenever there is an economic fallacy there would be an historical instance where Paul Krugman has fallen for it."

[@newmoon2411]

Fair enough, but I'm not convinced all of MMT hinges on this premise. MMTers don't care if their origin story is right, which is why they don't bother responding to you. It's just a thing they say so they can get on with talking about their policy prescriptions. They purport to describe gov't spending as it actually works and can you say they're wrong? Has the US government NOT been printing trillions like there's no tomorrow? These people see Utopia in the distance and you guys are hung up on whether they false-started the race or something. They don't care. Point out why 0 unemployment isn't possible. Why interest rates shouldn't be 0. Why a federal job guarantee doesn't work. These are the things they care about so that's where you have to push.

[@Oatriumph]

I mean, they care about legalizing theft for the rich and connected against the savers and the future. What are we supposed to say to them? Off with their heads?

[@billmelater6470]

That's the slippery game they play. They CLAIM to "just be saying how things work" but when you actually try to engage with them on why that's a bad thing, then all of a sudden you'll see them come to its defense, thereby contradicting their initial claim. Happens every time.

[@Oatriumph]

@@billmelater6470 that's because they are a religious sect performing an inquisition, not scientists discovering truth.

[@CPubi]

basically the point is that tax obligation cannot be said to be “enough” to make something money, that is completely up to the economic decisions of normal people, who decide what goods are more marketable and therefore the best medium of exchange.

[@snex000]

People wouid not value fiat unless some outside force is convincing them to do so.

[@CPubi]

@@snex000 try watching the video. governments have to trick people into using fiat with step-by-step legal encroachments over time. but it’s all spurious. fiat currency is a non viable system.

[@VincentWeisTheThird]

​@@snex000bank notes.

[@soccerdude601]

Once the petrodollar no longer exists the dollar is doomed.

[@green3488]

It already is doomed, just not dead yet.

[@joedoe2407]

"Only gold and silver is money. Everything else is credit!" - JP Morgan. So what is the dollar again?

[@Oatriumph]

Not money

[@billmelater6470]

Dollar = fiat currency. Not money.

[@billmelater6470]

The fact is that if government could do all MMT claims, then it could also command the value of the currency on a whim and have no need of taxation to curb inflation.

[@farmyardfab]

Dont legal tender laws prohibit us from requiring hard currency in payment?

[@-whackd]

If you have a farm, just start. Ask your customers to pay you in cash, Monero, precious metals or even bartering. Give them a discount. Many agorists are looking for farmers like this.

[@mikeb5372]

Legal tender laws are the entire reason people value the dollar. We are forced by law to accept dollars as payment under penalty of law for refusing dollars. The other part of the equation is that the dollar is backed by the full faith and credit of the government

[@TheDuckofDoom.]

​@@-whackd If by "many" you mean 0.01% of the market. which by its self would be plenty of the global market for a small business but such a business is nessesarilly local. Then add to that, the 0.01% adds huge risk and no sane businessman would entertain such a situation beyond selling some produce to known friends and family. What many agorists seem to ignore is that agorism is nothing but a child playing pretend games if you can't involve major industry, like sulfur mines and steel founderies which litterally have individual sccops of product measured in tens of tons due to the nessesary economies of scale involved.

[@charlessmith4381]

Some states have passed legislation to allow gold to be used as legal tender. Nothing at the Federal level. Making gold legal tender at the federal level would require the government to constrain spending. Balance a budget and decrease its size.

[@farmyardfab]

@@-whackd I'm a commercial farmer. I don't actually sell to individual consumers. I thought about inserting a "gold clause" into my next contract for my confinement hog barns.

[@Tenebrousable]

Maybe another angle? MMT's don't care about our questions, because we ask what we care about. What would be the things they care about, that we could ask, that would expose them? I've not have a slighest clue. But an interesting question?

[@billmelater6470]

If they cared about the questions they wouldn't be MMT'ers. It's onle held together by cognitive dissonence. It's really more of a doctrine than an economic theory.

[@charlessmith4381]

Excellent segment. 👍👍

[@charlestartt4110]

To be clear, I am very anti-MMT. But I think the hosts misunderstood the argument. That we all agree to exchange using the dollar stems from the fact that the government enforces tax payment in dollars, which brilliantly solves the dollar "chicken-and-egg" paradox. Yes, we could execute private exchange (in the US) using a non-dollar medium, but we don't. Why? Because it's the only enforced exchange. In the absence of other enforced exchanges requiring a non-dollar money, the market will naturally drift toward dollar exchanges. If I sold a chicken and the only requirement following the sale was a tax payment in dollars, receiving any form of payment other than a dollar would require effort to track down a trade for dollars. I would prefer dollars. When I go buy an egg, the only requirement for the egg seller following the sale is to pay taxes in dollars. Egg seller would prefer dollars. This preference repeats over and over for a couple hundred years and non-dollar exchanges are optimized out of the market due to innefficiencies. So here we are today, the dollar won and all private exchanges use the dollar. Do we have to? No. But at this point it would be stupid not to since now the government AND the entire private sector require dollars. Now who's up for some good 'ol fashion money printing? This round's on the government!

[@NickGore]

Hasn't this most recent, very sudden inflation made a solid case for people use the dollar when we need to but they're willing and ready to look for alternatives simply because the US dollar always suffers from inflation. This most recent inflation making it so clear and obvious to many who didn't realize the dollar was being continually devalued before.

[@dimitristsagdis7340]

The cashier's check and the casino chips are still dollar expressions that have the equivalent requisite dollar meaning/value in their respective context.

Yeah, I live in Sweden, the currency is Swedish kronor but the account I use for every day transactions is a Euro (and gold/crypto tokens if you want) account. It is not that hard to use a different currency then you pay taxes in...

[@thatsamorais584]

i certainly learned a lot

[@dimitristsagdis7340]

People use their national currencies within most of their national contexts (but not in all cause on occasion it is worthless and people prefer to use some other token like the currency of another country), because often it is illegal to use other forms of money, and because it minimises their transaction costs. So they will opt for anything (like cigarettes in prisons) that is considered as legit in their context and minimises transaction costs.

[@restonthewind]

People use the state's currency because they need it to pay taxes. It's not that no money would have value without a requirement to pay taxes, but if the requirement exists, people will use the money in which the tax is owed.

[@green3488]

Did you listen to the video?

[@restonthewind]

@@green3488 Yes. I'm basically saying what Bob says around 10:00. It's true that people could use another currency, or several currencies, in daily transactions and then purchase dollars with the other currency to pay taxes, but it's also true that they don't. A few people do use gold or Bitcoin in transactions with a few other people, but these alternatives don't become a common currency. At least, they haven't in the U.S. yet. Using multiple currencies involves transaction costs and generally complicates accounting. Most people just don't want to use more than one currency, so they use the currency in which they owe taxes exclusively. States can and occasionally do drive their currency into the dirt with inflation, and subjects then do adopt alternatives. Ironically, in recent history, subjects of other states typically adopt the dollar when their state's currency hyperinflates. I understand the regression theorem, and the dollar was a standard, silver coin issued by the Spanish government before it became the constitutional Money of the United State and ultimately the pure fiat money we use today, but this historical origin theory doesn't seem very relevant to debates over the dollar as money in the U.S. and around the world today. MMT or chartalism is a theory of fiat money. Fiat money is what we have regardless of what we had in the past or could or should have now. We use fiat money, so we need a theory of fiat money.

[@green3488]

@@restonthewind I use other currencies.

[@green3488]

@Martin Brock States always drive their currency into the dirt with inflation and USA is no exception to that, but good luck grasping at straws to try to prove otherwise.

[@green3488]

@@restonthewind It's not ironic that they do that. It's because the dollar was the global reserve currency and stuff. That's changing rapidly.

[@joedoe2407]

Since the dollar was stripped from gold backing, isn't it doomed to die? It's not money anymore and sooner or later trade will have to transition to (stable) money in order to survive.

[@Oatriumph]

While we rediscover medicine, chemistry, physics, etc.

[@joeblow3990]

The dollar lost its gold backing in the 1970's. It has been 50 years now and the dollar is still there. The idea that when a currency loses its gold backing then runaway inflation is inevitable is FALSE.

[@seankennedy4284]

The two fundamentals in economics are (a) resource scarcity and (b) unlimited human wants/needs. MMT ignores the former.

[@vatchemanoug]

If you make no money then you dont need to pay taxes… therefore it is not a value as a value is defined as “the regard that something is held to deserve; the importance, worth, or usefulness of something”. Money is not held to value because you have to pay taxes but rather it is held to deserve/worth because you need to buy things to survive in this world. On the other end of the spectrum is that governments value taxes because it allows them to buy things or in the new world we live in they value taxes because it allows them to issue more debt which allows them to purchase good and services.

[@iCanSeeWhatMostCant]

If you could pay taxes in bitcoin and physical silver the value of the dollar would decrease.

[@TheOtherCaleb]

@@iCanSeeWhatMostCant An MMTer would just say that those things would be denominated in the given sovereign currency, but of course that would just purely post hoc.

[@TheDuckofDoom.]

There are many taxes other than, and predating, the concept of income tax.

[@vatchemanoug]

@@TheDuckofDoom. of course im very aware of that. Between sales tax, property tax, land tax etc… all are predicated on the fact that you either own something or want to buy something. Therefore the concept of consumption and ownership is what predicates the oppressors ability to levy that tax. Therefore, people’s “want” to own or consume is what determines the oppressors ability to tax and not the usage or acquisition of the currency.

[@dimitristsagdis7340]

Well gold and silver emerged as money precisely because people where demanding gold and silver for payment. Where did you get the idea that this was not the case?

[@bimsherwood7006]

How about about "taxes make people value dollars", but ALSO "dollars are generally accepted because of all the government-controlled infrastructure makes dollars the most convenient, reliable, and stable medium of exchange"?

[@hansfeiertag6534]

"The core problem of a purely nominalistic theory of the creation of money, which thus wants to be completely on its own, remains unsolved: How can one induce the initial value of a monetary unit created by mere command without any contact and experience with preceding exchanges? For the nominalist view, money begins only in the detachment of the monetary nominal from its material monetary base, in this moment of authoritarian fiat. Something becomes money here by the mere outer monetary form which a state authority imprints on it. But every name needs a reference to a signified in the actual environment and to its burdens and limits, which the acting human being is able to rationalize and economize. Money is not a means to magically remove or circumvent this scarcity of means. On the contrary, to function as a medium of exchange, it must itself be scarce. Without scarcity, a medium of exchange would have no meaning or purpose at all. Fiat money has only become possible through the inertia of social consciousness, which still imagines nominalist money as somehow material, even though its attachment to an actual material base has become brittle and questionable and has almost entirely disappeared. But even when this binding has completely disappeared one day, this inertia of consciousness would presumably ensure for decades to come that such a materialless money would be accepted and thereby be possible at all, but only if this money remains at least limited, i.e. scarce, by some mechanism of whatever kind. This awareness can only have been triggered by an impressively preceding actual materiality of money in exchange. A purely state or nominalistic theory of money thus remains devoid of substance, if it only definitionally sets the concept of money: Money is what an authority arbitrarily declares it to be. It cannot arbitrarily do so. And with the explanation, why it cannot, the substantial explanation begins, what money actually is and how it emerges." pointcloud.substack.com/p/the-origin-and-concept-of-money-from

[@snex000]

What else can possibly give value to fiat? If government accepted taxes in other forms, why would you ever accept fiat as all it does is erode away to inflation? You'd take gold or Bitcoin and just pay taxes directly from that. The reason you don't accept gold or Bitcoin from your employer or why the grocer won't take it from you is obvious. You'd then have to go and trade those things again at tax time and owe even more taxes.

[@austinbyrd4164]

How does the government tax? By paying police to enforce it. The government started by borrowing to fund this coercive theft later. In other words, money & the value of it preceded taxation.

[@philipkruseman4857]

Doesn't make any sense, why do blackmarkets then use currency/money as medium exchange whether it be government run fiat money or non taxable ones to sell and buy goods.

[@Oatriumph]

Well, I think all the hospital EMR ransoms have all requested crypto, so some black markets avoid dollars.

[@snex000]

@@OatriumphEven markets that use monero eventually have to filter back into dollars somehow in order to spend that wealth in the "real" economy.

[@theethicsofliberty4642]

👍

[@joeblow3990]

I need dollars in order to pay taxes. If I do not pay my taxes to the government with dollars, eventually the government will take my house, put a lien on my salary, etc. The origin of our economic system was based on a state with armed men that can violently enforce the state laws. The Austrian absurdity is that in the beginning we had barter....then money was invented as a convenience to replace barter. There are NO EXAMPLES of generalized barter ever existing in ancient societies. The Austrian approach is a historic. Not based in science just BELIEF. It is more religion than anything else.

[@oldspammer]

International law dating back several centuries has confined what trends we see in the uses of currencies and debt and debt-servicing. The US Constitution makes mention of "The Law of Nations." The outside entities and groups of international law lawyers have constrained how international transactions are done, and at each stage, some middle man has their hand extended wanting their cut to do the exchange rate conversions. These forms of skimming reduce the income of everyone else in the chains of custody. It seems that Marxism Manifesto central bankers are able to skim the most in all these transactions by buying promissory notes such as bonds and Treasury Notes that accrue yearly compounded interest to cause the national debts of most countries to grow without bound causing inflation automatically due to money begetting more money as explained 350 BC by Plato, an Ancient Greek philosopher and teacher. This system is destined to collapse every so many years when inflation has it that one dollar borrowed into existence (when the only money in circulation) accrues a 51-digit number figure amount owing balance from yearly interest at 6% compounding semiannually for 2018 or so years. At some point, the number of atoms on planet Earth shall each cost $1. Inflation is a tax on a person's savings. Wars make huge profits for international bankers. What could go wrong with such a system? Answer: too many unnecessary wars for fabricated concerns. Online web application calculators for compounded interest exist that can compute the balance owing on very long-duration loans like thousands of years with a HUGE number of digits resulting in the balance owing. There is a video that came out a number of months ago that explains that birthrates have been on a huge collapse for decades so the number of people alive in a few decades shall drastically collapse. This is in part due to Marxism trying to attack the nuclear family by instating toxic ideologies into Western civilized cultures worldwide: feminism, Western Marxism (Woke culture, Intersectionality, political correctness, race-baiting, the long march through the institutions, cultural Marxism, etc). See birth gap documentary youtube

[@green3488]

Yeah. What else is new? Also, the way you write appears like just a bunch of copy pasted sentences that don't really go together well and stuff. Also, you basically describe the problem, but then present no solutions, such as using real money (gold) and taking away a certain gender's privileges, especially their voting privilege, etc.

[@oldspammer]

@@green3488 When anyone dares try to propose solutions, the Google AI especially censors those remarks, yet leaves the stupid crypto currency scams and What's app spammers to do phishing.

[@oldspammer]

@@green3488 We need smarter people and we need fewer stupid. There are no diets or exercises to reverse or eliminate one's immutable characteristics. We are all "born" this way. But "the way" that we are born has been carefully engineered to bring about civil downfall. By this, I mean exactly hormone disruptors, synthetic hormones and so on that bring about a HUGE reduction in left-right brain hemisphere differentiation. This differentiation is what makes possible higher orders of cognitive abilities, and having very much higher impulse control.

[@oldspammer]

@@green3488 kzbin.info/www/bejne/nGe5nJulq8Skrpo The Matter with Things | Iain McGilchrist | EP 278 uploaded by Jordan B Peterson

[@oldspammer]

@@green3488 kzbin.info/www/bejne/rGWslqh_nJ6hfbs Dr Iain McGilchrist: We are living in a deluded world uploaded by UnHerd

[@dualfluidreactor]

I never said Halleluja when I payed taxes

[@homewall744]

Most of us value money and want to keep it to spend voluntarily, not to pay the extorted tax. I think local taxes are some low federal taxes -- if we all paid the same rate on the same stuff without special interest exemptions, deductions, credits, etc. -- would be acceptable for the true common good, but this use of federal government debt spending, undeclared wars and global military empire and trickle-down economics and socialism/fascism isn't anything we'd want our money to go to. Government doesn't have any dollars just because they create them. They are supposed to create them FOR US to trade freely around the world. They have corrupted the currency so we suffer inflation and we don't know much about global trade because our money isn't sound. Government is supposed to create dollars to match the new wealth created by free people.

[@snex000]

But why can you spend those dollars? Why does the grocery store only accept dollars?

[@Tenebrousable]

How about this? Taxes are paid from what you have earned. If you earn a dollar or 100? Government does not need to spend it into existence, because you already have it to pay the taxes. Not that I think it will matter. They are not thinkers. They do not care about reason. I'm failing hard at avoiding the sin of pride.

[@modelmark]

Make the tax 100% and the currency will be super valuable....

[@dks13827]

no hope for us, none.

[@albionicamerican8806]

America was full of poor white people back when the country had "sound money" based on the gold standard. The Russian ruble also had the reputation for being "sound money" under the last tsars. Yet Russia was full of people who were even poorer than Americans at the time. In other words, it is not necessarily the case that the gold standard is compatible with what we would consider to be a decent standard of living. If you don't have enough fiat dollars now to pay your bills, you certainly don't have enough gold to pay those bills, either. Under a restored gold standard, you would be trading one kind of poverty for another.

[@TheDuckofDoom.]

You should see a doctor, it appears your herpathalimus is producing way to much derpamine.

[@1st-Impressions]

Value is derived from utility and scarcity. In the US, dollars have utility to settle tax debt. In addition they have utility indirectly because they are required by others for the same reason. Instead of asking why people use a poor money, why don't you start from the position that people use a poor money and ask why? Graham's law applies to monetary systems as well as monetary units so it is logical that people should spend dollars and keep their Eagles in their safe. The purchasing power of the dollar is related to the monetary supply compared to the total supply of goods and services, not the tax rate. It's possible for something to exist for a purpose (taxation) but also be used for a secondary purpose (barter). You don't really demonstrate why dollars have value if not primarily for payment of taxes.

[@Oatriumph]

First sentence is explicitly rejected by Austrian economists. Value is subjective. Not derived or correlated to anything other than an individual actor's preferences.

[@1st-Impressions]

@@Oatriumph Utility is subjective. There's no contradiction.

[@Oatriumph]

@@1st-Impressions utility is not subjective.

[@1st-Impressions]

@@Oatriumph Really? You don't think water is subjectively more useful to someone in the desert, compared to someone who's drowning? I find it hard to take you seriously.

[@Oatriumph]

@@1st-Impressions it is objectively more useful, if survival is the value. If suicide, then you are literally as wrong as possible. Like I said in my original comment, your definition of value is explicitly rejected by Austrian economists, and you don't even try to address that. That's you not taking them seriously, not the other way around.