Page under construction - just notes for now -
Adrian Wrigley (25Feb12)
The money flow is backed by the flow of land value. Money serves its catalytic function only when it flows. And when it gets to the land, it is redeemed. This makes it similar to theatre tickets as a store of value - effective, but time limited. People would like an instrument which is a permanent store of value. But in the real world people can't easily create and maintain permanent stores of value - perhaps the closest of which is a successful business. The medium of exchange function is well served by a flowing, catalytic money, issued by the people, redeemed against the land use, such as I describe. But the store of value function has almost the exact opposite requirements, best served by real economic capital maintained and used by business - in other words real investments. Land, taxation, promises, contracts, credit, bonds do not comprise real investment and shouldn't be put forward as "stores of value" for individuals because they are clearly not stores of value for the economy as a whole.
I think the confusion on this issue may arise because "money backed by land" makes people think of a *stock* of money backed by a *stock* of land. Since the land can be bought or sold for a lump-sum of given value, then the stock of money representing it also has this value, people might think. Indeed this was the thinking behind the Assignats of Revolutionary France, 1790s. The Assignats "backed by land" taken from The Church rapidly hyperinflated ( http://en.wikipedia.org/wiki/Assignat ). This is in sharp contrast to the Rentenmark ( http://en.wikipedia.org/wiki/Rentenmark ), mentioned in my recent interview. The Rentenmark issue flow was backed by the flow of land value from German property, and immediately halted the hyperinflation of the tax-backed Papiermark (which followed the stock of gold-backed Goldmark). Moneys purportedly backed by a stock of something are likely to serve a store of value function better than a currency (medium of exchange) function, but are prone to fraud, hoarding, depression, bubbles. Moneys backed by a definite flow are continually validated reducing fraud and tend to avoid hoarding (eg "Paradox of Thrift"), serving as a medium of exchange, not a store of value. Money today is backed in the first instance by the indefinite flows of income/sales taxes and mortgage service, serving poorly either as a medium of exchange or a store of value.