Heterodox In macroeconomics, chartalism is the theory of money that money originated historically with states' attempts to direct economic activity rather than as a spontaneous solution to the problems with barter or as a means with which to tokenize debt,[1] and that fiat currency has value in exchange because of sovereign power to levy taxes on economic activity payable in the currency they issue.
[3] When Knapp was writing, the prevailing view of money was that it had evolved from systems of barter to become a medium of exchange because it represented a durable commodity which had some use value.
He has to redeem or cancel that portion of the debt...The redemption of government debt by taxation is the basic law of coinage and of any issue of government ‘money’ in whatever form.Knapp and "Chartalism" were referenced by John Maynard Keynes in the opening pages of his 1930 Treatise on Money [7] and appear to have influenced Keynesian ideas on the role of the state in the economy.
[8] Lerner argued that responsibility for avoiding inflation and depressions lay with the state because of its ability to create or tax away money.
James K. Galbraith supports chartalism and wrote the foreword for Mosler's book Seven Deadly Innocent Frauds of Economic Policy in 2010.