Normative consequences of chartalism for post-capitalist society

[MarxSchmarx]

This came up in an IM discussion, but I am curious to what extent comrades who identify as chartalists see their theory as providing any sort of prescriptive or normative guidance about monetary systems as they emerge out of capitalism. To what extent do your chartalist world views commit you to certain approaches about adopting, for example, labor certificates and the like? How do you see acceptance of chartalism as providing insight or policy suggestions that would be distinct from a non-chartalist?

[Kotze]

What would Abba Lerner say? I believe he would say something like this, independent of whether the question was about a socialist or capitalist society:

On the micro level people experience a budget constraint. On the higher level, where the currency is issued, it is pointless to aim for a balanced budget over a period of any length per se, the aim is rather a mix of high employment and low inflation; state expenditure and taxes and "borrowing" are to be set with an eye only to their effects regarding these goals, not according to any "common sense" that projects people's everyday experience onto the state.

It's widely agreed that inflation happens when too much money changes too few goods, but I don't believe that any additional amount of currency units put into the system by the government without a tax increase that exactly matches it always makes a stable currency inflationary, which seems to be the position of "common sense" — sometimes moderated by saying this happens with a delay because of rigidities like contracts obligations in nominal terms and people being a bit slow in the head or whatever. It's more complicated than that.

A difference between Chartalism and the mainstream story of money is that Chartalism doesn't take as given that something just so happens to be used as currency. Regularly taking currency units out of circulation via taxation isn't just for fixing the right amount of money chasing goods, it ensures the currency is used as a method of payment by linking it with something that has value to people. Suppose a state that issues its own fiat currency doesn't give it any special treatment — you don't have to pay for specific state services with it, courts aren't only enforcing those contracts where one side pays with the state currency — the only exception is that you have to regularly pay taxes for some stuff you own, the state takes either units of that currency or the stuff. What happens if the tax code is changed, so that you are only taxed for owning units of that currency? Those who only think about fixing the amount of money chasing goods don't see something special here. The Chartalist view is that this invites a currency collapse, because it isn't linked to anything anymore.

A currency doesn't change into labour vouchers by printing on it TIHS IS NAO LABOUR VOUCHERZ KTHNXBYE =), replacing it requires big institutional changes, and hearing about Chartalism doesn't tell you what the strategically most promising sequence of attempting these changes is. The Chartalist explanation of money can inspire ideas how to ensure something is used as the most prevalent payment method, even without use of an electronic system that tracks every transaction. It's somewhat like when you want to check that people in a building aren't armed. We can run around the building like crazy mofos touching everybody all the time, or we do the check at entry. It isn't necessary to check every single transaction, it's sufficient that most people regularly encounter situations where they absolutely have to use one specific payment method to ensure that its manifold tentacles reach into every orifice of society.

Hmm, wording it like that is maybe not the best way of promoting the concept :/

[Die Neue Zeit]

I think what the comrade is trying to get at, and what I tried to get at previously without any comments from you and Paul, is some sort of Chartalist justification for the labour "gold standard" Paul suggested in his EU transition program: some rate between the amount of currency printed and circulated ("quantitative easing") / rate of change of money supply and some rate of change of labour hours.