Evolution of love

war on cash

Why we should fear a cashless world.
Poor people and small businesses rely on cash. A contactless system will likely entrench poverty and pave the way for terrifying levels of surveillance.
This is nothing new. Money is tech... 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 is worrying is the unofficial war on cash that is going on... the suspicion with which you are treated if you ever use large sums of cash...
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. The 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. 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, you too would rush to withdraw them...
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. Not that 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’.
Cash has its uses for small transactions – a chocolate bar, a newspaper, a pint of milk – which, in the UK, are still uneconomic to process by other means. It will always be the fastest and most direct form of payment there is. Tipping waiters, for example, in cash, knowing they will receive that money, without it being siphoned off by some unscrupulous employer...
It also has its uses for private transactions, for which there are many possible reasons, and by no means all of them illegal. Small businesses starting out need the cash economy. Poor people need the cash economy. The war on cash is a war on them.
If you listen to the scaremongering, you’d start to think that all cash users are either criminals, tax evaders or terrorists. Sure, some use cash to evade tax, but it’s paltry compared to the tax avoidance schemes Google and Facebook have employed. Google doesn’t use cash to avoid tax. It’s all done via legislative means.
Cash means total financial inclusion... Without financial inclusion, you are trapped in poverty. So, beware the war on cash.