Chicklet-currency (Photo credit: Wikipedia)
Are you clear about the simple notion that all formal currency systems are created by the declaration of the “taxing authorities?” The taxing authorities declare themselves legitimate (as in willing to act on their threats to seize property) and then they say “we will ONLY accept the following:___.” In different geographic areas, different units of currency are recognized and used.
Who says what is valid? Taxing authorities and their courts declare what is valid and enforce their declarations/claims/orders.
Continental Currency 1/3-Dollar, Obverse (Photo credit: Wikipedia)
When there is no confederacy to enforce the tax claims of the confederacy, or no USSR to enforce the tax claims of the USSR, then there is no formal purchasing power for the underlying currency. There is no court accepting it. There is no court punishing the failure to use that currency. Where there is no invasion or eviction or arrest or seizure or execution (ritual human sacrifice), then there is no value to a currency.
When a king says “we will accept gold coins bearing the face of the king,” THAT declaration CREATES demand (purchasing power). Why were rare metals chosen? Because the ruling pirates of imperialism had secured a monopoly or near monopoly on those substances (those mines).
In the 19th century, with the “uncontrolled” discovery of gold in the American continent, especially California, there was a recognition that simply accepting gold or silver was not reliable for maintaining monopoly power. Even when Spain starting bringing lots of gold from America to Europe, it disrupted the prior balance of power in Europe. Pirates (“privateers“) were hired by the competing European powers to intercept the ships heading to Spain with gold (and silver). The increased supply of precious metals dropped the demand for any individual coin, threatening the ruling institutions of organized coercion in Europe, such as the Vatican.
The Spanish Piece of Eight, used widely as currency in Colonial America and the ancestor of American coinage (Photo credit: Wikipedia)
Currency represents organized coercion. Organized coercion has always been the real functional power. With no confederacy, there is no coercion behind their currency of confederate dollars. An obsolete currency of a defunct regime is basically just a collector’s item. What if a Tea Party rebels against one piracy system with some piracy of their own?
English: Currencies exchange logo Français : Logo symbolisant le change de devises (Photo credit: Wikipedia)
With no coercion behind the currency of Chile, how much would it be worth? If you have a pocket full of foreign money in the US, does the coercion behind that currency extend in to the US? If not, then it will not buy much here. You could take it to another member of the international piracy network (a money changer or currency exchange bank), but the paper is just paper outside of the functional reach of the organized coercion network.
Monopoly (Photo credit: Mike_fleming)
en: Photo of Euro coins and notes. da: Foto af Euromønter og -sedler. (Photo credit: Wikipedia)
Small Tax Day Tea Party Protest at San Francisco City Hall 97 (Photo credit: Steve Rhodes)
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Tags: Coercion, confederacy, confederate dollars, Currency, money, monopoly, pirates, privateers, tax, taxing authorities, tea party
