What is Money? --Steve Roth

First I read this: 

The Fed is not “Printing Money.” It’s Retiring Bonds and Issuing Reserves.

 

Printing money is money creation.  Creation is making some thing out of no thing.  Money is a thing.

Retiring bonds and issuing reserves is shuffling money around.  Moving a thing from one place to another by changing its name related to some aspect of its nature as a thing but it remains money.

 If I read it a hundred times and mapped out the relationships it describes in a structured information engineering method then I might understand what is being described.  No need to do that.  It describes what money does not what money is.  No need to even read it.  Just read the headline.  Printing, Retiring and Issuing are all verbs!!!!  Can anyone get that??  They are verbs about what money does.  (All Verbs).  Not what money is A Noun).  After some analysis supporting the headline Steve says:

"Or, I would say, all of the above. I’d actually replace all three: there is something wrong with the (nonexistent) definition of “money.” But that’s another post."

"Another Post" addresses what money is.  The post is excellent: 

The Money Confusion

 There is no way to really understand what money does without first understanding or defining what money is.  What it is now in fact and what it should be as a basis for the information system design. I think that defining what money is, and that can be done, it is a man made thing, ends the confusion about what money does.  Money is the operating system.  What it does is all the applications that the operating system supports to be done.

Hurray for Steve Roth!  He says:

"I’ve been worrying at it despite (or because of) endless reading spanning centuries of money thinkers, reading that has brought me to the conclusion that economists don’t have an even-vaguely coherent or agreed-upon definition of what money is. No: saying that it “serves three purposes” — store of value, means of exchange, and unit of account — does not a definition make. Not even close. In my opinion, that fumbling tripartite stab at something vaguely definition-like actually takes us farther from, and obfuscates, any useful definition.
It’s not uncommon to find leading economists of all stripes — even deep money thinkers like Randall Wray — using vague, quasi-technical terms like “moneyness” and “money-like.” They don’t seem to have a tight technical definition that they can rely upon others to understand and use synonymously. cf., Decades, centuries of inconclusive argument on the proper definition(s) of “the money supply,” and the various definitions thereof."

This comment by "Paul" on what Steve wrote hits the nail on the head:

"This is a creative approach near and dear to my heart as a mechanical engineer. I generally make arguments myself based on principles of thermodynamics. Economics is after all a system and known systems are subject to relationships that re-occur in all similar systems in one way or the other.
In my view, traditional (read neoclassical) economics is a a farce based on fallcious assumptions has has no value to the vast majority of citizens. 95% of the economics curriculum should be jettisoned and it’s progenitors retired before they do any further damage.
Keynes was a true scientist of economics and his ideas will always prove to be true, although they can be refined and moved forward like any scientific thinking. Your approach can win the hearts and minds of science-based thinkers such as engineers, mathemeticians, physicists, biologists, etc. and future economists must come from people of that background, just as the great tennis players of today are athletes that just a decade or so ago were playing football or baseball.
Modern economists are little more than hacks or as Dan Kervick likes to say, shamanists.
Real world economics is more predictable than shamanism as it is governed by the “tyranny of the arithmetic” as Bill Mitchell would say, not magic."