Very good article to write.

Cullen has a very solid understanding of endogenous money, as well as the principles of portfolio management and investment.

I like to draw a relationship between unemployment and property rights, that it is the monopoly property owners possess, which results in unemployment, when the people who own resources don't want to buy further labor, so the price of labor can fall arbitrarily low.

There are many layers of concepts that matter here, including the minimum wage: both a regulatory level and a practicable minimum wage, below which a laborer takes a net loss, as it becomes more costly to provide the labor then the compensation they receive. This may or may not be comparable to a living wage, which is about paying people enough to allow them to have a socially inclusive lifestyle and a basic level of comfort. So already we have 3 different definitions for a minimum wage: regulatory, labor sustenance, and a socially inclusive wage.

The issue with labor is that it is both perishable and also non-fungible, so like any perishable unique good on clearance it may be sold at a negative profit margin, as if something is perishable any price is better than zero. In regulatory terms, a minimum wage prevents this self-defeating "race to the bottom" wage bidding.

The entire notion of unemployment is of course dependent on these concepts of a minimum wage, as without a minimum wage there would be some price at which labor markets clear.

If we thus take a property view of unemployment, conditional on the various levels of minimum wage, we now must establish a basis for property rights, of course. And regardless of the procedural practices for determining property ownership, I think it should be clear and non-controversial that property as a practical matter is established through common public recognition. Like I said, property rights can have different procedural justifications. Some may see property as a right coming from first use or initial incorporation or the labor of developing an unclaimed resource, and even in some cases people may make naturalistic social hierarchical arguments such as divine right or class systems. But in all cases property is a matter of public recognition.

Seeing as property is the public's grant of a private monopoly--every owner is a tiny king and every plot is a tiny kingdom-- we must then realize what is one important public monopoly? Money is a public monopoly. What we recognize as money is money. Like all property, money is a public recognition of a private claim.

And then "why taxes"? How do taxes fit into this? As MMT points out, they are operationally a reserve drain. But in this conceptual viewpoint, taxes are the price to an owner to maintain their private claim.

The people who constantly harangue that the public is stealing through taxation, fail to realize that the public is granting them more in return. And while not all tax policies may be well balanced, any time you want a private domain that requires some practical level of public grant.

The view that taxation is theft is an anti-social viewpoint that property is an intrinsic claim of the owner and that no consideration to anyone else must be given. It is so anti-social in fact that it becomes strange and even hypocritical that they would even bother publicly expressing this idea: If the property is yours regardless of what anyone else may think, then why do you feel a need to constantly complain publicly?

So the function of taxes is to establish a system for dispersing trading, and ultimately redeeming tax credits, which allow private parties to justify and maintain their private claims, which are public grants.

An illustrative parallel example to how tax credits work is bank credits. A bank credit is a claim on a deposit. However it is not like a key to a safety deposit box. The bank credit "deposit" is just a record of a debt the bank owes you. Imagine we were using gold coins as money. The bank will not keep the specific coin you deposited, and may not even have any coins on hand at all to cover your deposit. In a pinch, they can borrow themselves to service your withdrawal. Imagine a carrier pigeon delivering gold coins to a bank with an empty vault as you wait at a teller window. So long as the deposit can be fulfilled in a reasonable time frame, it does not matter where it comes from or how that happens behind the scenes.

Similarly, a tax credit is just a token or record of a debt until it is used. Until you use the credit to pay your taxes, there is nothing there and nothing that needs to be there. When you pay your taxes, your property remains in your hands, and the public mob is held at bay through the power of rule of law.

A tax credit, or public money, like a bank credit- private money if you will-, is an abstracted claim that is redeemed at a window. Except that the tax credit is redeemed at tax time, whereas a bank credit is redeemed at the teller window. With a tax credit your physical property is allowed to remain in your hands, whereas with a bank credit, a physical token is restored into your hands.

MMT focuses a lot on the operational matters of accounting, and sometimes I wonder if this is enough to contend with the mistaken idea of money as a thing or an object, rather than expression of a social relationship.

It makes me think of this old Lutheran hymn I learned in German class back in college:

Wach auf, wach auf, du deutsches Land!

Du hast genug geschlafen,[5]

bedenk, was Gott an dich gewandt,

wozu er dich erschaffen.

Bedenk, was Gott dir hat gesandt

und dir vertraut sein höchstes Pfand,

drum magst du wohl aufwachen!

This is the best translation I could come up with:

Wake up, Wake up, German Land,

You have slept long enough

Think on what God has bestowed on you,

for what purpose he created you.

Think what God has sent you,

and trust in the token of his highest pledge.,

thereby that you may awake.

https://de.wikipedia.org/wiki/Wach_auf%2C_wach_auf%2C_du_deutsches_Land

It is specificallly that word pfand, that I find so interesting in this context. That word is literally used in German to describe their bottle deposit system that encourages recycling. So there is a sense in which a promise and a commitment gets transformed into something physical and real.

Regardless of the religious message of this hymn, I think it has a great human message, that we should think about our pledges and commitments seriously, that it is an expression of who we are and not just what we have.

And as much as finance comes across as cold and calculating, it does not exist without the human element.