NOTE FOR THE READER: I want to reiterate that fascism, in the sense I use the term, only describes a state managed economy. I need to clarify again that my argument is not that modern money theory (MMT) is wrong, but that it correctly describes how fascism works. Nor do I wish to suggest that fascism means MMT is Nazism — many people who could never be described as Nazis embrace MMT insights. A fascist state, as I use the term, must be contrasted with a commune of the social producers, not with ‘democracy’ or a bourgeois republic. In fascism the bourgeois state manages the economic activity of the whole society, while a commune of social producers is self-managed. If the reader fails to keep these critical ideas in mind when reading this post, nothing much of my argument will make sense to you.
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A ‘sufficient’, but not ‘necessary’ cause?
At this point, I want to discuss a critical weakness in Tymoigne and Wray’s “Modern Money Theory 101: A Reply to Critics”, that is exposed when a third, external trade, sector is introduced to the simple two-sector MMT model of an 
economy. In the simple two-sector model, the means of exchange used by society in its exchange relations is assumed to be supplied by the state. According to MMT, the preference for state issued inconvertible fiat currency — over commodity money or bank notes — is that the state imposes taxes for which it only accepts its currency as payment. This, the writers argue, is sufficient to explain what “drives” state fiat as currency:
“The simple fact is that almost all monies of account are ‘state monies’ and almost all government currencies do have taxes or other obligations standing behind them. Further, even if one can find a money of account and a currency that has no fee, fine, tax, tribute, or tithe backing it, that would not invalidate MMT. Perhaps Palley does not understand the difference between ‘necessary’ and ‘sufficient’ conditions: a tax (or other involuntary obligation) is sufficient to drive a currency; it might not be necessary. MMT theory relies on the sufficient condition, not the necessary condition.”
For the moment, I will overlook the questionable assertion that “almost all monies of account are ‘state monies'”. For July alone, in the US, consumer credit outstanding — a money form that is not in any way a ‘state money’ amounted to $3.2 trillion. This private money is, of course, denominated in US dollars, but it is a privately issued money form that seldom takes the form of state currency.
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As I showed in the first part of this series, Marx’s argument is that the rate of profit falls because, over time, generally less labor is employed in the production of commodities. The falling rate of profit triggers a crisis during which capital attempts to restore the normal operation of the mode of production.
