link to original reddit post by /u/subsidiarity

From the outset, I doubt the state origin of money and I don't have strong feelings on MMT.

I have heard from multiple sources, often in relation to MMT, that the state cannot be the origin of money because of an initialization problem. If the state released tokens into society then individuals would have no way of knowing what sort of ratios to put on these tokens.

  1. Like in a market, people can guess. Good guessers will be rewarded. Equilibria will eventually set in defining what was a good guess.

  2. The first bitcoin transaction had exactly the same problem.

  3. People do have some touch points for guesses. The king has paid his staff in tokens. If people need the tokens for taxes then they have had some communication from the king that they they will need these tokens. That communication may also say how many tokens they will need. Say 100 tokens. The peasant should trade less than his yearly product for 100 tokens. Likely, he would guess that what ever he paid in taxes last year is worth about 100 tokens. The staff also expect their income last year to be roughly equal to the value of the tokens they got for the year.

So, there is some grounding for the problem (3). Even if there isn't it will work itself out (1). Just like it has worked itself out before (2).