What is the source of the value of fiat money? i.e. why do people want them?
In the case of gold or any other good, you’d want it because you know in the future other people will want it, and because ultimately at the end there is someone using it for production (and people buying those products).
But in the case of fiat money, there is no ultimate use in production. There are some other factors though that tie in a need for it. For example, you have to pay taxes in fiat money. So that means there is a lasting demand for it. But you have to pay those taxes because you earned money in taxes. So what is the reason you’re earning them in fiat money? Is all this simply tied into the status quo, i.e. everyone earns money in fiat money and therefore people have to pay fiat money taxes and therefore there is a lasting demand?
I understand you also have legal tender laws and taxes on property value gains, but it seems to me that without the above tied in need, I would think the pressure to move away from fiat currency would be too great to be sustainable.
If currency competition would be legalized and their property gains taxes removed, wouldn’t dollars almost instantly lose all it’s value?
Suppose you have a primitive society with a few clans producing and trading, and you would force them to use your monopoly fiat money. How would their products find prices?