Did any country ever suppress the value of money?

Upvote:1

Yes. It's called feudalism and arose organically, rather than by government decree, over much of Western Europe following the fall of the Western Roman Empire.

One might think of it as a type of quantitative easing. With the precious metals of Europe mined out above the water line, yet the steady stream east of specie for silk and spices unabated, money became too valuable to tie up in banal transactions such as daily labour. In consequence, much of the economy transitions to use of the moderately fungible one day's labour, freeing up specie for commercial and international transactions.

Upvote:4

Yes, nearly every government suppresses the value of money – but the question as stated doesn't make any sense.

The most frequent way to suppress the value of money is inflation. Every government manipulates the value of their money. Premodern governments debased their coins to suppress the value of money. Of course they maintained the fiat value, but suppressed the intrinsic value of the coin.

Furthermore Seigniorage means that it is nearly always prudent for a government to count things in terms of money – government makes a profit off every unit of currency. This is part of the reason why inflation is a tax that nobody votes for.

Having said that, the question makes no sense. The definition of money is a medium of exchange. You ask:

physical resources and manpower were so important that it did not make sense anymore to count them with money.

As a consequence, the government would have suppress the count of money, or make it pointless by artificially increasing the sum of money hold by the government.

It cannot make no sense to count things with money; money is the way we count things. If a government were to suppress the value of money not only would they need to increase their tax rate to compensate for the lack of seigniorage, but they would have no way to tax – because they couldn't assess value, or collect value.

Since you don't reference the sources that you're viewing, it is impossible to discuss the assumptions present in those sources.

The only context in which these terms could potentially make sense is if the value of the goods and services being purchased were existential – if failing to engage in the transaction would result in the elimination of the government. In such cases the government will typically nationalize the resource. You allude to the Tiger Tank. Wartime production is not an economic activity – it is an existential activity. It is common for governments to nationalize (in some form) wartime production. It isn't that they "suppress the value of money", it is that they direct production of goods and services detached from economic incentives. Economic transactions must balance the values of the participants – wartime transactions are valued by "if I lose, I cease to exist".

@PieterGeerkens has offered an excellent alternative example of economic transactions carried out when the government has no recourse to specie. Marxist economists advocate abandoning money and substituting "exchange entitlements" (which are really just another word for oppression). But in money is the way that we establish, measure and communicate value. Suppressing the value of money would involve suppressing the measurement and communication of value, and that can only be done outside the context of economic activity – doing so in a modern nation state seriously delegitimizes the state, and is generally considered only when there is no alternative.

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