The Cashless Society Is a Creepy Fantasy

https://www.bloomberg.com/view/articles/2016-10-14/the-cashless-society-is-a-creepy-fantasy

by kushti • 10 years ago

57 56 10 years ago

bloomberg.com

jimmywanger5• 10 years ago

Having no cash is the authoritarian's fantasy.

When every transaction is trackable, everything is taxable and able to be fed into big data.

"Sorry, sir, we can't sell you health insurance. Our records show that you've been purchasing too much alcohol."

"Excuse me sir, we're from the local police. We're concerned that you've recently bought 500 rounds of 22lr ammunition (and that's a perfectly reasonable amount). Mind coming down to the station and answering some questions?"

Edit:

And of course, the ever popular.

"Hey, we noticed you bought a used car. Based on your finances you shouldn't have been able to afford it, according to our calculations, unless you've been getting paid without notifying us. We already know what you spend and how you spend it, and how much money you make. You're going to prison for tax fraud."

900022• 10 years ago

It's incredible how ignorant some folks can be when it comes to why cash is still considered king today. For one, half of all small transactions (less than $50) are made in cash.

OH the other day in Palo Alto: "Cash will no longer be a thing in 5 years."

Sorry, we are still roughly 200 years away from achieving this authoritarian fantasy, if we are to consider the current rate of decline of payments made in cash. I wish folks would leave their suburban bubble for once and talk with real people across America, especially those living at the bottom of the pyramid.

jimmywanger5• 10 years ago

The interesting thing is, this has to be adopted internationally.

If RMB or Euros still exist in paper form, but the USD doesn't, or any combination thereof, the economies will quickly shift to taking foreign currency as a matter of course.

If you're selling tacos or hot dogs on a street corner, you're not really caring what kind of money you're taking in, as long as it's good and honored by the people you owe money to.

Obviously for large transactions, there will be currency controls (and there already are). But for small day to day stuff? Like restaurants and dealing with food suppliers? Or hell, even hiring the neighbor's kid to shovel out snow or mow your lawn.

As long as there's some form of cash, that's what they'll use.

solipsism• 10 years ago

if we are to consider the current rate of decline of payments made in cash

And why would we do that, in this age of technological acceleration?

kylebenzle• 10 years ago

Only if you consider cryptocurrency "cash". Otherwise, plenty of people are already living exclusively on bitcoin today with many benefits and few of the scare mongering issues. I can't imagine the masses are still 2 whole generations from catching up, I'd think about 10 years would be enough.

shakna• 10 years ago

I think this concept is predicated upon the culture of a government.

Australia has fully adopted contactless cards instead of cash, as others have said. [0]

However, there is a clear cut tax for transactions, GST, and though there are no rights guaranteed by the Constitution, there is a precedent where police can be called out for stalking and harassment. [1].

[0] https://news.ycombinator.com/item?id=12740677

[1] http://mobile.abc.net.au/news/2016-08-30/police-officer-invo...

Scarblac3• 10 years ago

But this is why privacy laws are so big in the EU, sharing such data with other companies leads to huge fines.

rtpg• 10 years ago

I find it a bit silly that "catching tax fraud" is the main marker of the authoritarian. And then some jump to bitcoin, which is by definition perfectly auditable, as a decentralised ledger.

Even in a cashless society, governments (well some, anyways) still require warrants to search business records, to wiretap, to follow you around.

Inversely, even in cashful societies tracking all of this is still pretty easy. You register car purchases through the state. Your employer files taxes.

This is why a strong, independent judiciary is important!

jimmywanger5• 10 years ago

I don't think that's the main marker of the authoritarian, and that's a fairly reductive way to think about it.

Put it another way, what can be tracked should be tracked is the way we should be thinking about authoritarians.

If there exists a database where all transactions can be monitored and datamined, they will be monitored and datamined in the name of national security, terrorism, or money laundering.

Plus, I don't even want to think about private companies. "Sorry sir, unless you give us the right to search your financial records for suspicious transactions, we're not giving you car insurance or a mortgage. Or a job."

vertex-four2• 10 years ago

"We've used data from your employer's requirement to register you as a foreign employee, and the fact that you've been shopping at B&Q recently, as probable cause for a broad-reaching search warrant against everywhere you spend time - your home, work, mosque, social clubs, and your best friend's house. At the same time, we're detaining you under the Terrorism Act on suspicion of materially aiding a terrorist operation."

That should be a lot scarier than "they're taking our guns away" or the obvious continuation of capitalism. Many countries across the EU, and the US, have politicians with broad support who are promoting outright fascism. It's not very difficult to see where this road goes for members of our least accepted minorities.

dudul• 10 years ago

Can you name a few countries in the EU where politicians advocating for what you describe get broad support?

AReallyGoodName• 10 years ago

Not a fantasy. In Australia contactless payment using smart cards is now everywhere, even in the small news outlets, food stalls and coffee shops. I bought lunch at a small shop just a minute ago with one.

For things like buying second hand cards we also have a pretty good online direct deposit system where you can just transfer money online.

Cash is losing the war here, check out the graph in the following article showing the dwindling usage of cash.

http://www.heraldsun.com.au/business/why-our-looming-cashles...

reustle• 10 years ago

Same in Japan! I use my suica card everywhere I can

Vanit• 10 years ago

Fellow Australian here, basically completely cashless. Only withdraw cash if I have an immediate reason.

masklinn• 10 years ago

Many scandinavian countries are also 'round there. Icelanders seem to use card to pay for a pack of gum, cash is a tourist thing. The cash wankery seems to be a pretty uniquely american thing.

sitharus• 10 years ago

Can't see the graph due to subscriber begging interstitial that redirects to the homepage :/

In New Zealand I haven't used cash since 2002 except for pop up stalls, and even those take cards these days. I've never used or possessed a cheque book. I did get paid by cheque for my first real job, but it's been direct credit since 2004.

chewxy• 10 years ago

Except the occasional phó shops that still refuse to use eftpos for some unknown reason. They're the bane of my life - I feel like Viet but have to walk to Woolies to draw cash :S

TulliusCicero4• 10 years ago

When I was living in the bay area I used cash only very rarely, at farmer's markets or toll booths. Everything else was credit card.

BoringAsian• 10 years ago

"Having no cash is the authoritarian's fantasy."

That's a giant step in logic that I can't understand yet. How come more cashless societies seem less authoritarian then ones that societies that use cash? E.g. Britain compared to Russia. Sweden is one of the most cashless societies and they seem far from expressing authoritarian traits. I bought a greg's using a contactless card and I haven't felt this strange grip of authoritarian fear. I guess it is better to say

"Having no cash means you can speculate a authoritarian's fantasy easier"

vixen99• 10 years ago

"I bought a greg's using a contactless card and I haven't felt this strange grip of authoritarian fear". What's that - QED?

spangry• 10 years ago

It reduces the number of entities a government needs to control or coerce (i.e. banks), in order to have some effect on the general population (e.g. expropriation). I'd imagine that net savers in Cyprus, the people least responsible for the financial collapse in 2007, would feel much the same way.

gambiting2• 10 years ago

It only doesn't feel authoritarian to a point where a bank closes your bank account without specifying a reason, and you find that you can't get a bank account and a card anywhere else, which also means that even if you work and have cash, you are excluded from 90% of the business living in a society requires.

mickronome• 10 years ago

One reason most Swedes are laid back about cash is the Swedish banking laws, especially what is called 'insättningsgarantin', a deposit guarantee law.

The gist of that law is that in Sweden a bank is not allowed to close your account, or disallow you to open one except in very specific circumstances. Essentially you have to either use your bank account for something illegal, or lie to the bank. I've never once read about a case where a bank has closed the account of anyone, while it still probably happens, it's not something anyone is afraid of.

audunw• 10 years ago

Sweden is one of the most cashless societies and they seem far from expressing authoritarian traits.

I believe this is because of a critical fact about scandinavian countries:

People trust the government, and by exchange, the government makes themselves trustworthy to the people.

It seems to me that people in the US has a deep distrust for the government. This may be because the government there is less trustworthy to start with, but I think it also goes the other way around. It creates an "us vs them" mentality which makes politicians and government workers have less respect for the people they serve.

I do agree with some of the points of the OP though. We shouldn't need some bank AND credit card company to stand between us and payments to other people and the government. Before we make the switch to cashless, we should have some kind of cryptocurrency. I don't care if it's created by the government, and that new currency is injected by them according to their monetary policy. I don't care if the government can see how much I have in that currency, as long as only they can. All I care about is being able to settle payments without being dependent on a bunch of private, opaque bank and payment companies, and their opaque infrastructure.

squozzer2• 10 years ago

You have a point but let me make a counter -- it's the subordinate who must prove their trustworthiness to the superior. Which in your view, seems to be the people and their government, respectively.

If you had said, "The government acts in a trustworthy manner, and the people, in turn, trust their government", then our viewpoints would be in alignment.

spiderfarmer• 10 years ago

I cash ever dissappears there will be other things of value that can be traded.

buro9• 10 years ago

This already happens. On the estate I grew up the base currencies people traded with were sexual favours, soft drugs, and stolen bicycles.

ChoHag5• 10 years ago

For reasons to tired too explain, I've been without a bank account (and therefore also credit/debit card) for a couple of months.

Nightmare. And scary as hell. And when it's not "official" c/d cards, its the shop points or the we're-not-a-bank-honest-guv quasi-debit-cards; it's impossible to catch a bus in London now without a tracking device^W^Woyster card.

Luckily for me I've only returned to this decadent backwater for a brief period before I head back to the glorious freedom (for once not a sarcasm in sight) of the ex-USSR. I feel disgusted that I had to write that.

Edit: And I think I'd like to add that despite the pain, I don't plan on getting any kind of card and may end up regaining a bank account but only as another means of converting my bitcoin to whatever the locals call cash.

Edit 2: And another thing. I tried to book a driving test in the UK. Wasn't able to do it online, even to book and pay later, without using a (non-government) bank account and (foreign) clearing house. Apparently a postal method is available. Our governments themselves are starting to require banks and credit/debit in order to interact with them.

easytiger• 10 years ago

Is much of your angst directed at the pain one goes through opening a bank account in the UK?

ChoHag5• 10 years ago

That certainly doesn't help, but really it's just bureaucracy and you batton down the hatches and get it done.

Needing one, and it is really very close to need, is the concern. Interactions between me and my fellow citizens, or between me and my government (but I repeat myself), should not require a chaperone.

s_q_b• 10 years ago

In the United States, we're much more evolved: we don't just exclude people from government services, we also use innovative free market solutions to extract as much money from the "unbanked" as possible.

First, corporations only pay in direct deposit, check, or debit card. Of those three, only checks and debit cards can be used by the unbanked.

Secondly, while you can choose a check, the only method through which the unbanked can receive actual USD, you can't cash it very easily. However, the unbanked can't simply submit a photo of them through an app on their iPhone. They have to walk to "check cashing" businesses, which abound in our inner cities. These businesses exist by taking a cut of the paychecks of the people too poor to afford a proper bank.

Finally, there is the debit card option. Debit cards for pay were originally intended to eliminate predatory check cashing businesses. The cards were supposed to prevent the type of ridiculous costs imposed by check cashing businesses.

What occurred next was fairly predictable. Instead of a direct rate, companies charged small fees such as withdrawal fees, card replacement fees, and account fees, which accrue over time to roughly the same amount as going to the check cashers. Since the debit cards are often more convenient, many people choose that option, and the corporation takes the cut that used to go to the "unscrupulous" check cashers.

Later I'll tell you about bail bondsman and private prisons...

anexprogrammer• 10 years ago

Everywhere else in the UK you can still pay cash on buses. I'm slightly taken aback that London bus thinks cash is no longer worthy as every time I've been on a bus everyone pays cash or has weekly pass.

I pay cash nearly everywhere, card is for online only. I'll be a long way towards the back of the cashless adoption!

TulliusCicero4• 10 years ago

I'm slightly taken aback that London bus thinks cash is no longer worthy as every time I've been on a bus everyone pays cash or has weekly pass.

Paying cash on the bus substantially slows down the bus. It makes sense to get rid of that transaction.

tommeader• 10 years ago

In Nottingham some buses allow cash but only exact change.

ChoHag5• 10 years ago

It's impossible. I just had a fight with a bus driver over this.

"Single to X please"

"No"

"I'll pay you, whether personally or your employer, an entire £10 (the fare's about £1.50) to take me to X"

"No"

"£20?"

"No. Go somewhere else (there was nowhere near this particular bus stop to buy one and I'd have missed that bus even if there was) and buy a card so we can follow you everywhere you go"

It's fucking scary. Or would be if I lived permanently in this shithole. Haha!

Recent events rather than persuading me to get bank account and card have entrenched my position not to get one. Things should not be like this and fuck any and everyone who's OK with it.

adgasf• 10 years ago

Regarding the bus: The system isn't perfect but the alternative is significant queues for counting change etc. I would suggest buying an Oyster card in cash and only topping it up in cash at corner shops etc.

dmytroi• 10 years ago

Currently Sweden is on a race to be first cashless society: many shops completely stopped accepting cash (many also started to use iZettle [1]), people usually simply don't carry cash with them, and if it happens that you need to send money to other person: Swish [2] is to the rescue, which is direct bank-to-bank money transfer system for small amounts.

On other hand everything is traceable, you can call tax office and ask who is get paid what, if you want to know where the person lives: just hitta.se them by name, you will also get avg income for household there.

- [1] https://www.izettle.com/ - [2] https://www.getswish.se/

jamesblonde• 10 years ago

At flea-markets, i think about 90% of all transactions are non-cash in Sweden. It's nearly all Swish. Swish is amazing - it's mobile payments supported by all the banks with no transaction cost. You type in somebody's phone number, the amount to give them, then authenticate it with your pin code (using a cert issued by your bank - basically another app).

lmm• 10 years ago

The crime-fighting case against cash is overstated. Last year, a risk assessment of money laundering and terrorist financing conducted by the U.K. government found that regulated institutions such as banks (like HSBC) and accountancy service providers (like the Panamanian tax-shelter specialist Mossack Fonseca) posed the highest risk of facilitating the illicit storage or movement of funds. Cash came in a close third, but if we’re going to cite unlawful transactions as a rationale for banning cash, it only makes sense to ban banks and accounting firms first.

This is specious logic. Stricter regulations on banking and accounting are being introduced, and even if they weren't, that wouldn't be an argument for doing nothing about cash.

And yeah, america-centric article is america-centric. The author should try living in a place with low cash use for a while. Their concerns are real, but unlikely to carry much weight with the public when held up against a) the inconvenience of cash and b) the reality that it's mainly used not by valiant freedom fighters but by common criminals.

TulliusCicero4• 10 years ago

Cash sucks. One of the annoyances of having just moved from SV to Munich is that credit cards are often not accepted and you need to use cash. In the bay area, I used cash only very rarely, and it was glorious.

throwaway7767• 10 years ago

One of the annoyances of having just moved from SV to Munich is that credit cards are often not accepted and you need to use cash.

The benefit is lower prices. Credit cards have high transaction fees, and the contracts generally prohibit the merchant from adding those to the cost of the transaction. So everyone, regardless of payment method, pays higher prices if the store accepts credit cards.

TulliusCicero4• 10 years ago

Handling cash has its own logistical overhead, though, so this is debatable.

blazespin• 10 years ago

Clearly this guy hasn't heard of something called precious metals, art, diamonds, blah blah blah

dbbk• 10 years ago

In the UK. I never carry cash on me. Hell, you can't even USE cash anymore on public transport here in London.

drKarl• 10 years ago

In my opinion, a cashless society would make some cryptocurrencies like Monero, which enforces privacy, anonimity and fungibility, take off and start to spread its adoption more broadly.

squozzer2• 10 years ago

Keep in mind a completely trackable currency would require more creativity in funding political "dirty tricks" a la Nixon and his (spiritual) successors.

The Cashless Society Is a Creepy Fantasy

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