by Frank Shostak
Mises.org
According to some “experts,” there is an urgent need to remove cash from the economy. It is held that cash provides support to the “shadow economy” and permits tax evasion. Another justification for its removal is that, in times of economic shocks, which push the economy into a recession, the run for cash exacerbates the downturn—it becomes a factor contributing to economic instability. Moreover, it is argued that, in the modern world, most transactions can be settled by means of electronic funds transfer. Money in the modern world is allegedly an abstraction.
The emergence of money
Money emerged because barter could not support the market economy. A butcher, who wanted to exchange his meat for fruit, might not be able to find a fruit farmer who wanted his meat, while the fruit farmer who wanted to exchange his fruit for shoes might not be able to find a shoemaker who wanted his fruit. The distinguishing characteristic of money is that it is the general medium of exchange. It has evolved as the most marketable commodity. On this process, Mises wrote,