Mish On Money Definitions

You know Mish is often quoted here with approval, but he has bollixed definitions in his post on bitcoin in California:

Three cheers to Dickinson. At the federal level, we need a more commonsense ruling that bitcoin is a currency, not an ordinary commodity like copper.

Ooops. No!  Bitcoins is a mere tally, not a currency (and as he says, certainly, not a commodity).

By the way, money is a commodity as well as a currency.

No, again, money is money, a medium of exchange.  A currency is a derivative, such as warehouse receipts (for say money), which USA paper currency was once.

In Man, Economy, and State, Murray Rothbard explains "Money is a commodity that serves as a general medium of exchange."

Right, note Mish has conflated currency and medium of exchange.

In contrast to oil, bitcoin has no commodity use other than to facilitate trade. Similarly, gold has very little industrial use. But unlike bitcoin, gold cannot be manufactured out of nothing.

No.  Gold has overwhelming industrial use, no computers or cell phones without it.. the connections would have to be huge and cooling systems built in if not for gold, to name just one industrial use.  The price of gold is tied to its use as a commodity.  If there is any stability in the price of gold it is related to its use as a commodity.

Gold's overwhelming role is still as a currency even though it is not in general use as money. After all, central banks still cling to it. They don't cling to copper, oil or even silver.

Ungh! Error of the narrow basis of comparison.  We all tend to think the universe began the day we were born, because we were born.  if we don't know we fill in the blanks with what we assume. Gold is money, silver is money, traditionally, because it acted as such.  Gold is rich man's money, which is why banks store it.  Silver and copper are poor mens money. Which is why they don't.  Most business on earth in history is done on credit among members of a community (see bitcoin).  The gold and silver come out as money instead of currency in times of chaos.  Since the people you are dealing with may not be alive in ten minutes, you are not inclined to extend credit, you want to be paid in money (gold or silver.)

This is why you see people using gold and silver as payment in wild west and frontier and war situations.  This is why archeologists find no gold buried around places wiped out by natural disaster but plenty around human disasters.

So after getting it very wrong, Mish gets back on track...

Many think gold cannot be money again "because there isn't enough of it". Others believe  "the production of gold does not expand fast enough for the economy".
Both statements are easily proven false.

Yes, and Mish goes on getting things right, and recommending Rothbard on the topic.  So do I.  But Mish needs to re-read it and more carefully.

A friend remonstrated with me for being strict on the definition of money when so few people use the term in the way Rothbard and I do.  Here is his error:  the people who use the term money incorrectly do some in one of perhaps 50 different definitions.  The people who use the term correctly out number the any group using a given wrong definition.  Yes, more people fail to use the term correctly that use it correctly, but any or each "wrong group" is smaller than the group that uses it right.

It matters because if one has ones terms wrong, it is likely, and is the case in the discussion of money, that there will be no apprehension of comprehension as to the questions posed.

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