[thaumasiotes]

Taxes certainly existed before state-issued currency, but the purpose was obviously not to grant value to the currency. (It can't have been -- this was before the currency existed.)

Ancient taxes were assessed in kind, most commonly in grain or labor. The reason was that the government wanted the grain or labor. The main benefit of taxing in metal is that grain is perishable and voluminous, not that it creates demand for more metal.

Consider a stylized section of Chinese history:

State-issued currency: copper coins (low value, accepted most places); paper notes (high value in the capital, hard to spend elsewhere)

Means of exchange: raw silver valued by weight

Form of taxation: silver

[hnick]

I was replying to the specific use case of creating a tax to grant value to a freshly invented currency by giving it to occupying soldiers as payment while requiring merchants to pay taxes using it. It was intended to speed up adoption because the merchants needed to get the coin for taxes so had to accept it as payment.

[thaumasiotes]

Do you know of such a tax? There are two types of freshly invented currencies:

1. Currency invented where there were just raw materials before. ("Conceptual invention")

2. Currency invented to replace or exist alongside other already-known currency.

In case 1, I believe the currency is generally an object that was already valuable, and therefore doesn't need support. Coins were usually able to trade a little above their value as measured in raw material because of the nominal standardization they provided.

Case 2 is not at all rare, and there are even cases of states deciding to make coins from a worthless material (iron) for ideological reasons. Everyone can have iron.

This seems like an ideal case for propping up the (otherwise too low to bother with) value of the ideological coins, but I'm not really up on the history of this kind of thing. I know the iron-coin states were often economic failures (e.g. Sparta). I know there were a lot of difficulties with paper money in China, but I don't know the details.

[hnick]

"Fresh" from the perspective of a population might be more accurate to what I'm saying - not invented from nothing (that was inaccurate wording). The book we're discussing goes into a lot of detail on this, more than I could having read it so long ago now.

The wikipedia article briefly mentions this: https://en.wikipedia.org/wiki/Debt:_The_First_5000_Years

"The author postulates the growth of a "military–coinage–slave complex" around this time. These were enforced by mercenary armies that looted cities and cut human beings from their social context to work as slaves in Greece, Rome, and elsewhere. The extreme violence of the period marked by the rise of great empires in China, India, and the Mediterranean was, in this way, connected with the advent of large-scale slavery and the use of coins to pay soldiers. This was combined with obligations to pay taxes in currency: The obligation to pay taxes with money required people to engage in monetary transactions, often with very disadvantageous terms of trade. This typically increased debt and slavery."

It occurred mostly in subjugated nations as a way to bring in the new money (from the perspective of the conquered, who saw no value in this foreign coin). It accelerated adoption in populations who had no familiarity with the system, and indeed may have been operating on non-monetary systems still (the book credits Alexander as wiping away many of the last vestiges of such economies).

Looking at the above passage, it has some resemblance to company scrip.

[thaumasiotes]

> "The author postulates the growth of a "military–coinage–slave complex" around this time.

I'm trying to get a sense of where to put this on a continuum between "I could imagine things happening this way" and "here are contemporary records in which the king specifically states that the new tax is needed in order to get people to accept the new coins".

Postulation isn't really what I'm usually looking for in a historical work.

[thaumasiotes]

I should point out that historically, getting people to accept metal was not an issue that usually came up. For example, Hammurabi's code details a punishment for certain merchants who will accept metal as payment but refuse to accept grain. That's the king complaining that what merchants want is to accept metal exclusively (though not coins; they are not known to have existed at the time).