Hey everybody, welcome to the What is Money Show.

I am thrilled and honored today to be sitting down with a very special guest, Mr. Nome Chomsky, who is an emeritus professor at MIT and a professor at the University of Arizona.

Noam, it's a great pleasure to have you here.

And in honor of the namesake of the show, I'd like to start with a very general question and topic.

What in your view, is the proper definition of money?

And how do you see the proper role of government in money?

Well, money is an accepted means of exchange.

It's nothing in itself.

It's based on trust and willingness to agree to let this particular means of exchange be used in some community.

There was a time when it was theoretically backed by some fixed commodity, usually gold.

But that again is based on trust. Why should anybody care about that particular mineral? So it's a convention

that says, let's accept this as the means of exchange. By now, most money is just something

going on in the, you know, the electronic media.

It's not a medium at all.

The role of government depends on what kind of society we have.

If there's no general answer, I mean, there's a debate, has been a debate.

If you look at the concrete cases, so let's take the last 45 years, roughly, the, as you recall,

I'm sure when Ronald Reagan's inaugural address, it answered this question.

It said, government is the problem, not the solution.

We have to reduce government to the minimum.

His own administration acted in the opposite way. The share of

government in GDP actually grew, but the distribution of the way government worked changed.

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