ABSTRACT

This chapter provides the "passive" money order, which leads to more and more government intervention, to another one more distant from the state, in which money is legally defined as an asset. Most of the ruling houses issued their own money in order to collect the "seigniorage", which promised a more stable source of income than taxes. In order to give the state the necessary flexibility in money creation, money had to be freed from its link to gold or silver. Governments who take on a lot of debt in order to weaken the effects of clearing up are in danger of becoming over-indebted when growth remains anemic after the crisis. The issuance of money is subject to an inherent conflict. The consequence is a financial crisis and recession or even depression. As a consequence, it is impossible for the planning bureau to match supply and demand in a way that utility of economic agents is maximized.