Money Wisdom #499

As I say, money, for proponents of MMT, when the term is used for items used in making payments, is said to be debt. Thus, in a chapter of Wray’s book focussed specifically on the nature of money, two subsections in which money is interpreted in this way are given the heading “money is debt”. Wray also identifies three “fundamental propositions regarding money”, one of which emphasises that “money [not a particular good] buys goods”, and another of which runs as follows: 

“Money is always debt; it cannot be a commodity […] because if it were that would mean a particular good is buying goods” (Wray, 2012, p. 264). 

I take it that the term debt is here understood in its traditional and legal sense as an obligation held by a debtor to satisfy a creditor. It is internally related to a credit, where the latter means a specific right to payment or satisfaction. Credit and debt, in other words, are two aspects of the same social relation – a credit/debt (or debt/credit) relation – connecting a creditor and a debtor; you cannot have one aspect without the other. Credit is simply this relation viewed from the perspective of the creditor; it is debt from the point of view of the debtor.

Tony Lawson Money’s relation to debt: Some problems with MMT’s conception of money (2019)

Real-world Economics Review, issue no. 89

Money Wisdom #498

"Although a unit of value ‘measurement’ or assignment is clearly a primary concept in any sustainable theory of money, it is not itself money. Rather, money, at least as I conceptualise it (or money proper, as Keynes calls it), comes into existence only if/when the community also positions a suitable kind of thing or stuff (denominated of course in the accepted unit of account, and so, as a kind, typically positioned elsewhere in the system previously) to serve as a general means of payment and, in the case of a successful money at least, a store of purchasing power. Money is that so (additionally) positioned kind of thing."

Tony Lawson The Constitution and Nature of Money 

in Cambridge Journal of Economics (2018) 42, 851–873