> - A store of value
> - A unit of account
Note that these are all social attributes. They are true because and only because society treats them so. A medium of exchange works because counterparties to the exchange accept the medium. A store of value works because counterparties in the near future will accept the currency at something similar to its current value - its value isn't heavily fluctuating. And a unit of account works because people physically write up accounts using the currency as a unit, issue invoices and demand payment using the unit, issue debt and demand interest, borrow and pay interest, all using the unit.
It's all a social construct.
(Gold's value is a social construct too, of course.)
Money was a liability like now. It's just that the associated promise was different. Gold was not money then more than it is now.
Is there any promise associated with money now (except "you don't go to jail if you pay enough taxes in government's money")? If not, then I can't see money as a liability, only as an investment (i.e. the government prints money, sells it for other assets (FX, bonds, stocks, etc.).
Government money is, also, a liability in a very real accounting sense too.
When the government creates money (by crediting the accounts of their providers, for instance) it is also registered as a liability for itself.
This same money always will be accepted back as a payment. That's the promise.
The widespread use of paper money is actually quite a recent innovation, compared to the millennia of history for gold and silver coinage. People didn't trust paper for a long time (and still don't, when times get troubled).
The Constitution of the United States (quite a recent document, historically speaking) invariably refers to "coining" money, not printing it.
If the value of the coin comes from the material, why issue coins in the first place?
Actually, once the state stopped recognizing gold as the standard economic unit of account, it ceases to be money. It becomes just another commodity, like corn or platinum.
Another natural consequence of gold having become a commodity is that monetary policies cease to cover the value of gold, thus it fluctuates naturally in the market just like any product, and is also subjected to economic bubbles.
The price fluctuation alone makes gold unsuited to be used as money, as it is no longer suited to store value.
Maybe Econ 101 has changed, but I remember learning that "money" was:
- A medium of exchange
- A store of value
- A unit of account
When we were on the gold standard these were all true. Now that we're off the gold standard gold is no longer a medium of exchange or a unit of account, but one could argue pretty effectively that it's a better store of value than dollars have been, and it's done so for throughout history. (I'm talking time periods of decades, not the post 2008 crisis volatility here.)
The fact that the system we're using now is debt-based rather than based on precious metals should't change the definition of money, however.