John Carney at CNBC tells the fascinating story of a college currency called the Buckaroo and asks the question: is the demand driven by the community service taxes that the college only collects in Buckaroo, or is it driven by what goods/services these Buckaroo can be traded for from students. John argues in favor of the latter.
This has implications for real world economics, of course. It demonstrates that taxes are not sufficient to give money value—at least, not beyond the level of near-term anticipated taxes. What is required first is the creation of wealth, or genuine economic output.
The desire for the products of our economic output drives money. If productivity collapses—or if it is anticipated that productivity will collapse—the value of money will collapse right along with it.
I tend to agree with John. Here’s my comment, based on my practical experience with rewards
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