In What Has Government Done to Our Money? Murray Rothbard writes,
A most important truth about money now emerges from our discussion: money is a commodity. Learning this simple lesson is one of the world’s most important tasks. So often have people talked about money as something much more or less than this. Money is not an abstract unit of account, divorceable from a concrete good; it is not a useless token only good for exchanging; it is not a “claim on society”; it is not a guarantee of a fixed price level. It is simply a commodity. It differs from other commodities in being demanded mainly as a medium of exchange. But aside from this, it is a commodity — and, like all commodities, it has an existing stock, it faces demands by people to buy and hold it, etc. Like all commodities, its “price” — in terms of other goods — is determined by the interaction of its total supply, or stock, and the total demand by people to buy and hold it. (People “buy” money by selling their goods and services for it, just as they “sell” money when they buy goods and services.) [emphasis added]
@mattgilliland said in last week’s bookworm hangout that he considers this a potential problem with the WHGDtOM, if taken literally — a problem that only becomes evident with the advent of cryptocurrency.
But I guess I need someone to explain to me why Bitcoin isn’t a commodity. It certainly seems to fit Rothbard’s implicit definition in the above passage.
