“A Fiscal Theory of Government’s Role in Money”
“As an alternative to market failure explanations, we draw on theory and historical evidence to argue that fiscal considerations explain the roles governments typically play in producing and regulating money. Public monopoly production of coins and banknotes, substitution of fiat for commodity standards, and restrictions on substitutes for government money all generate revenue and especially provide means for meeting fiscal emergencies. We argue that these arrangements do not reflect conscious design so much as the evolutionary survival of the fiscally advantageous.” Read more.
George Selgin and Lawrence H. White
Economic Inquiry, Vol. 37, January 1999, pp 154-165.
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