Money has no value of its own, and it never has. Both physical cash and ancient and modern intangible forms of money (to cover all forms of ledger based monetary creation – which are in essence identical however the record has been maintained) get their value from recording debt. A currency achieves that by being issued into existence by a government that accepts it back in settlement of legally due tax obligations.
It’s the last sentence which is wrong.
A currency might achieve value through government action. But it is not necessary for there to be the government bit for money to achieve value. There have indeed been private currencies around. Sometimes accorded greater value than the government backed ones too.
The Senior Lecturer is making one of his usual mistakes, taking something that can, does but might happen to be a necessary thing that must happen. It is neither true that money only gains value from government issuance or acceptance (that’s “legal tender”, not “money”) nor is it necessarily true that government issuance and acceptance creates value – you could pay your taxes in $Z for example.
This is fun too:
….no country where two currencies are in widespread common usage can ever be subject to effective macroeconomic management in my opinion.
This from the man who insists that monetary policy not longer has any value and that only fiscal policy works?
There is no currency that exists independently of the fact that a sovereign state will accept it in settlement of tax owing. The looser the connection, the weaker the currency, by and large. It is literally this fact that gives money its value in use: nothing else does because nothing else requires that it be used in exchange in a location.
It’s simply not a true statement.