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Chartalism is an economic theory which says that money is given value through its use as payment of taxes to the state.  Charta- means token or ticket:  items which have no intrinsic value but are given value by their acceptance as payment in exchange for goods or services.

Metallism, or “commodity money” says that the unit of account will have an intrinsic value; that is, it will have value apart from its use as a medium of exchange.  The Gold Standard is an example of metallism.

Chartalism was developed by G.F. Knapp in the early 1900′s and was used by Abba Lerner in developing Functional Finance.  Modern Chartalism is referred to as Modern Monetary Theory (MMT).


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