Graeber, "If money can be avoided in complex societies, why do they still use money?" - "Money is not used because it is necessary—it is used because it is convenient for those in power. In small, reciprocal communities, you don't need money because trust and social bonds replace formal accounting. But as societies grew and power became concentrated (kings, empires, states), money became the perfect tool to control people. It's impersonal, portable, and allows the powerful to extract resources from the weak without relying on personal relationships. Money isn't used because complex societies can't function without it—it's used because powerful elites want it that way. It formalises exploitation. We still use money today because the system of debt and taxation has been institutionalised for thousands of years, and breaking free from it would require a complete restructuring of power.", "What is about the core functions of money (medium of exchange, store of value, unit of account) they successfully avoid? Why don’t the authors take them into account?" - "I don't ignore these functions—I simply argue they are secondary. The traditional story (barter → money → credit) puts the cart before the horse. In reality, credit and debt existed long before money fulfilled these functions. People used tally sticks, oral promises, and social obligations to exchange value and keep accounts. The 'store of value' function is particularly problematic—money as a store of value actually creates inequality because those with more money can hoard it and gain power over those who need it. I focus on the social and political functions of money because the economic functions (medium, unit, store) are just technical descriptions that hide the real story: money is about power, not efficiency. Economists love these three functions because they make money look neutral and technical, but it never is.", "Can’t inflation be triggered by the emission of additional money, especially taking into account that economies almost always are not at their full capacities? But there are plenty of examples when inflation substantially damages the wellbeing of households." - "Yes, absolutely. Inflation is a real danger, and it's often the poor who suffer most. But you're missing my point: I'm not advocating for printing money. My argument is historical and moral, not a policy prescription for modern central banking. I would say that inflation is another tool of the powerful. When governments print money and cause inflation, they are effectively devaluing the debts of the rich (who owe money) and destroying the savings of the poor. It's a form of wealth redistribution—but usually from the poor to the rich. My solution isn't 'print more money'—it's 'cancel debts and restructure power'. Inflation is a symptom of a broken system where money is controlled by elites. I would point to historical examples where debt cancellation (jubilees) restored social stability without causing inflation.", "There are economies where taxation almost doesn’t exist—how can they be explained with the money circulation?" - "This is a brilliant question, and it actually proves my point. If you look at stateless societies (like many indigenous communities) or historical periods before organised states, you find that money either didn't exist or functioned very differently. In these societies, value circulated through gifts, reciprocity, and social obligations—not through state-imposed taxes. The existence of tax-free economies shows that money and taxation are not natural or necessary—they are inventions of the state. When states did emerge, they imposed taxes to create demand for their own currency. But if a society has no state or no tax, money circulation happens through social trust and mutual obligation, not through coercion. So, these economies are actually evidence against Kelton's theory and for my view: reciprocity comes first, state money comes later—and it's not the only way.", Kelton, "If money can be avoided in complex societies, why do they still use money?" - "I would argue that money is necessary for complex societies, but not for the reasons Adam Smith gave. Money is the mechanism through which a government mobilises real resources (labour, materials, technology) for public purposes. Without money, how would you pay teachers, nurses, or soldiers? How would you coordinate millions of people to work toward common goals? The question isn't 'Can we avoid money?'—it's 'Who controls the money and for what purpose?' In a modern nation-state, money is the essential tool for the government to fulfil its obligations to society. We can't go back to tally sticks and reciprocity on a national scale.", "What is about the core functions of money (medium of exchange, store of value, unit of account) they successfully avoid? Why don’t the authors take them into account?" - "Actually, I fully accept these functions, but I would reframe them. Money as a medium of exchange only works because the state demands taxes in that currency—that's what gives it acceptability. Money as a unit of account is simply whatever the state says it is (dollars, euros, etc.). And money as a store of value? I would argue that's the least important function for a modern sovereign currency. If you want to store value, buy bonds or assets. The government's money is primarily a tool for spending and paying taxes. The traditional three functions are fine as a description, but they don't explain where money comes from or why it has value. That's why I focus on taxation and state power—that's the real foundation.", "Can’t inflation be triggered by the emission of additional money, especially taking into account that economies almost always are not at their full capacities? But there are plenty of examples when inflation substantially damages the wellbeing of households." - "This is the most common criticism of MMT, and you're right to raise it. But I would push back on two points. First, the examples you mention—where inflation damaged households—often happened when the economy was already at or near full capacity (like during wartime) or when supply shocks occurred (like oil crises). Second, my theory specifically says: don't print money when the economy is at full capacity. If there are unemployed workers, idle factories, and unused resources, then new money will create jobs and output, not inflation. The pandemic stimulus is a good example—in many countries, it didn't cause immediate inflation because the economy had slack. Where inflation did spike, it was often due to supply chain problems, not government spending. The solution is not to stop spending—it's to use fiscal tools (like progressive taxation) to cool down specific overheated sectors. You don't treat a fever by starving the patient—you treat the cause.", "There are economies where taxation almost doesn’t exist—how can they be explained with the money circulation?" - "That's a good challenge, but I would argue that such economies are either very small (like hunter-gatherer bands) or they use alternative forms of taxation—like tribute, forced labour, or religious offerings. In a modern, complex, nation-state economy, taxation is essential to give the currency value. If you have no taxation, you don't have a sovereign currency in the MMT sense—you have something else (barter, foreign currency, cryptocurrency, etc.). For example, some oil-rich countries have low direct taxes, but they still have taxation through state-owned enterprises or customs duties. Or they rely on foreign currencies (like the dollar), which means they give up monetary sovereignty. My theory is about sovereign currencies—like the US dollar, the pound, or the yen—where the government is the sole issuer. In those systems, taxation is what drives the currency. In tax-free systems, money circulation works differently, but that's not the reality of most modern economies today."

Dmitriy

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