In Pratchett’s Discworld® book Making Money, Moist von Lipwig,in his new role as Master of the Mint and personal dogs body to the bank’s chairman, discovers that cities are the value, the backing store of the local economy:
Hmm. Moist stared at the bill. What does it need to make it worth ten thousand dollars? The seal and signature of Cosmo, that’s what. Everyone knows he’s good for it. Good for nothing but money, the bastard.
Banks use these all the time, he thought. Any bank in the Plains would give me the cash, withholding a commission, of course, because banks skim you top and bottom. Still, it’s much easier than lugging bags of coins around. Of course I’d have to sign it too, otherwise it wouldn’t be secure.
I mean, if it was blank after “pay,” anyone could use it.
Desert island, desert island…on a desert island a bag of vegetables is worth more than gold, in the city gold is more valuable than the bag of vegetables.
This is a sort of equation, yes? Where’s the value?
He stared.
It’s in the city itself. The city says: In exchange for that gold, you will have all these things. The city is the magician, the alchemist in reverse. It turns worthless gold into…everything.
How much is Ankh-Morpork worth? Add it all up! The buildings, the streets, the people, the skills, the art in the galleries, the guilds, the laws, the libraries…billions? No. No money would be enough. — emphasis added
The city was one big gold bar. What did you need to back the currency? You just needed the city. The city says a dollar is worth a dollar.
Not that I think cities need their own currency, but if the city wants to borrow against the value of itself, it should be able to do that. And the way to do that is to tax the land value represented by the buildings, the streets, the people, the skills, the art in the galleries, the guilds, the laws, the libraries…
It’s clear cities already have their own wealth to draw on, to borrow against and to tax for the good of all. They just let speculators and rentiers pocket it every month.