by Jason Myers – Money has a number of integral functions in society. As a medium of social exchange, money goes far beyond “only” the transmission of value. Inherent in money is also a message of appreciation for something (goods) or someone (an artisan, a craftsman, an entrepreneur) for providing a solution to some problem by providing some goods, services, knowledge, ideas, or an invention. All this is what makes an economy in the first place, and what makes the economy work in general.
For this to happen, money needs to have certain functions, In fact, there are four main features something must have in order to function as money. Economists agree that money must be a
- unit of value,
- medium of exchange,
- standard of deferred payments and
- store of value
While it could be argued that money may develop and possibly change over the course of history, its main characteristics need to always be present or people will turn to something else to replace old money that is no longer useful. This has happened time and again throughout history, particularly when fiat currency — or money that existed only by government “guarantee” but did not have an inherent value — was involved. So far, there is not one single fiat currency example in all of human history that has not collapsed and be replaced by something else — often another equally artificial form of money — at some point in time. The only exception are precious metals which have kept their value and an astonishingly constant purchasing power throughout history.
As if the troubles purely government-issued currencies find themselves in weren’t enough, the exact same governments relying on paper currency to finance more or less useful government spending at will and by simply putting more paper currency in existence one way or the other now appear to have set their minds on the elimination on the very essence they live off.
Starting in the 1990s, it all of a sudden became “essential for public safety” to demand ID checks when someone paid with “suspicious amounts” of cash. Normally, it was some consumer making a withdrawal from their money in the bank in order to maybe buy a small compact car (or even a luxury one), a bunch of materials to remodel their hose or backyard, or maybe even a horse for their precious daughter. Nothing “suspicious”, after all, but commencing in the 90s, this somehow had to be scrutinized and recorded from there on out. Fast-forward to the post-2008 era with an economic crisis in full swing that, ironically, has been brought about by non-cash derivatives speculation by the incompetents at the very banks entrusted with “enforcing” those “anti-moneylaundering” schemes and you are left with a bunch of politicians demanding the abolition of cash altogether in order to “fight terrorism”.
What these “experts” of both their political departments as well as real life fail to understand is that, just like the arts, a free press, freedom of science, freedom of assembly, and many other basic human rights, a functioning and also legitimately confidential monetary system is essential for the proper functioning of the economy and society in general.