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About Money
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Backing of money
Money primitives
On monetary communism
Helicopter money: the question not asked
Government fiat: how much is too much?
Can interest ever be repaid?
Debunking the three functions of money

Home > Money and Credit Conversion > About Money > Backing of money

Backing of money


There is, in the end, only one possible backing of money, and that is human work. All the mechanisms of banking and finance tend to hide this basic fact.


Money originating from private sector debt is backed by a promise to work, to provide goods and services. We call this “productive money.”

Money originating from public sector debt is backed by a promise to tax. We call this “unproductive money” if issued in excess. As Mitchell-Innes noted, it creates an illusion of wealth: “the more government money there is in circulation, the poorer we are.”