The State Theory of Money

"In 1895 I put forward my views for the first time, laying down that the money of a State is not what is of compulsory general acceptance, but what is accepted at the public pay offices..."

-Georg Friedrich Knapp, Preface The State Theory of Money (1905)

The State Theory of Money (1924), a pioneering economic work by German economist Georg Friedrich Knapp, argues that money is created by the state and does not have any intrinsic value, directly contrast to the theory of the Gold Standard. Knapp's so-called chartalist school of monetary theory paved the way for the Modern Monetary Theory, which states that governments can print as much money as they need without having to borrow or tax to finance spending.

The State Theory of Money, first published in 1905 in Germany, and abridged and translated into English in 1924, is essential reading for students of monetary theories and economic history.