Why We Should Fear A Cashless World

[DamianTV]

http://www.theguardian.com/money/commentisfree/2016/mar/21/fear-cashless-world-contactless

The health food chain Tossed has just opened the UK’s first cashless cafe. It’s another step towards the death of cash.

This is nothing new. Money is tech. The casting of coins made shells, whales’ teeth and other such primitive forms of money redundant. The printing press did the same for precious metals: we started using paper notes instead. Electronic banking put paid to the cheque. Contactless payment is now doing the same to cash, which is becoming less and less convenient. In the marketplace convenience usually wins.

That’s fine as long as people are making this choice freely. What concerns me is the unofficial war on cash that is going on, from the suspicion with which you are treated if you ever use large sums of cash to the campaign in Europe to decommission the €500 note. I’m not sure the consequences have been properly considered.

We already live in a world that is, as far as the distribution of wealth is concerned, about as unequal as it gets. It may even be as unequal as it’s ever been. My worry is that a cashless society may exacerbate inequality even further.

It will hand yet more power to the financial sector in that banks and related fintech companies will oversee all transactions. The crash of 2008 showed that, when push comes to shove, banks have already been exempted from the very effective regulation that is bankruptcy – one by which the rest of us must all operate. Do we want this sector to have yet more power and influence?

In a world without cash, every payment you make will be traceable. Do you want governments (which are not always benevolent), banks or payment processors to have potential access to that information? The power this would hand them is enormous and the potential scope for Orwellian levels of surveillance is terrifying.

Cash, on the other hand, empowers its users. It enables them to buy and sell, and store their wealth, without being dependent on anyone else. They can stay outside the financial system, if so desired.

There are many reasons, both moral and practical, to want this. In 2008 many rushed to take their money out of the banks. If the financial system really was as close to breaking point as we are told it was, then such actions are quite justified. When Cyprus’s banks teetered on the cliff of financial disaster in 2011, we saw bail-ins. Ordinary people’s money in deposit accounts was sequestered to bail out the system. If your life savings were threatened with confiscation to bail out a corporation you considered profligate, I imagine you too would rush to withdraw them.

We have seen similar panics in Greece and, to a lesser extent, across southern Europe. Mervyn King, the former governor of the Bank of England, recently declared that banking was not fixed and that we would see financial panic again. In Japan, the central bank has imposed negative rates and you are charged by banks to store money. This is to try and goad people into spending, rather than saving. So much cash has been withdrawn from banks that there are now reports that the country has sold out of safes.

These are all quite legitimate reasons to want to exit the system. I’m not saying we should all take our money out of the bank, but that we should all have the option to. Cash gives you that option. Why remove it? It’s our money. Not the banks’.

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Full article on link.

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"Mr. Jones, we see that you would rather spend your money on porn than to buy our premium health insurance, which you are expected to do by law. As a result, we have decided to increase your premiums by $100 per month until you seek a mental health professional and take care of your porn addiction."

"Oh no! The stock market has crashed again! I better go pull my money out of the bank!" to which will be replied "Sir, we can not allow you to withdraw any of your money from that bank. They have been deemed 'too big to fail' and need your money to survive more than you do! Your money will be used to bail-in your bank."

There are so many things that will go wrong in a cashless society that it isnt even funny. Problem is that all of these things benefit the Monopoly of Money at the expense of everyone else. People will alter their behavior significantly when they finally discover the consequences of having total surveillance, and that behavior will not be that of a free and open society.

 

[oyarde]

Put me down as a non participant to cashless .

 

[timosman]

 

[DamianTV]

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What surprises me is the number of people in the non banking / financial sector that have no problem with this. How the hell do we get through to people like that?

 

[spudea]

irrational fear of losing something tangible, physical, contributes to panics.

Cash, on the other hand, empowers its users. It enables them to buy and sell, and store their wealth

This is not true. Paper money enslaves the user, forced to keep track of and protect something that is in actuality a worthless piece of paper, not a store of wealth. Buying a safe for paper money???? That's hilarious!

In a cashless world, perhaps we could have a secondary store of value like bitcoins, that the financial institutions cannot use or have access to. Strickly person to person but digitally.

 

[Origanalist]

irrational fear of losing something tangible, physical, contributes to panics.



This is not true. Paper money enslaves the user, forced to keep track of and protect something that is in actuality a worthless piece of paper, not a store of wealth. Buying a safe for paper money???? That's hilarious!

In a cashless world, perhaps we could have a secondary store of value like bitcoins, that the financial institutions cannot use or have access to. Strickly person to person but digitally.

Sounds good in theory, but until the digital world is free from government intervention if it threatened their monopoly in a significant way would they not collapse such a system?