Banning cash is such a monumentally bad idea its a miracle of modern propaganda that a single person is willing to even consider it. From negative interest rates to ubiquitous tracking of your every move and purchase (by stores, banks, governments, and whoever else they choose to share the information with), to the total paralysis society would face from any sort of blackout or network disruption, to limitless technical vulnerability by hackers, eliminating cash is truly one of the worst ideas ever conceived. Its bad enough that the government enforces a legal monopoly on currency. Extending that monopoly to digital-only currency is a huge step in the wrong direction for business, commerce, and freedom.
That depends on your perspective. Our overlords have lost the war for hearts and minds of the 10% [1]. So the classic problem here is how to "drain the swamp". And this is a perfectly correct solution.
In this very forum a few months ago someone posted how they were afraid to search for Adhan -- the Muslim call to prayer -- because they didn't want to end up on a list. This approach works. It works silently, efficiently, and there is no paper trail to have to respond to in a future (one hopes) crimes against humanity tribunal.
[1]: Just a round number. The 10%(™) signifies the significant cross cutting core subset of society that the tip of the power structure, and the captive civilization, critically depends on.
I don't think anyone is considering banning cash. More likely, you'll one day find that merchants may refuse to accept cash, or provide change, the same way that many merchants today refuse to accept credit cards. And honestly, that is their right. As someone who's had to collect rent from roommates, I refused to accept cash from them. It's too much of a hassle/liability for me to deal with. I think that a law requiring all merchants to accept cash is government-overreach frankly.
Regarding negative interest rates - this is something that sounds really scary, but actually isn't. We aren't talking about a hard asset like gold - we're talking about fiat currencies. Every time your government expands the money supply and triggers inflation, you're losing money. If you try to prevent governments from setting negative interest rates, they will just pump up the money supply and make you lose money through inflation instead. There's little point in banning negative interest rates, unless you're willing to ban monetary-supply-expansion as well. And unless you're a hardcore Ron Paul libertarian, I bet you've never protested governments promoting moderate inflation.
Regarding anonymous monetary transactions, I agree that there is value in this. This can also be accomplished through cashless transactions. All you need is an aggregated prepaid debit card service. You buy the prepaid debit-card using your regular bank account, and then use that prepaid debit card to conduct anonymous transactions.
The one upside of cash is minimal transaction fees. It always annoys me that Visa takes a 1-2% cut from every single transaction. It effectively makes us all 1-2% poorer in the process. But this is a market-solvable problem if the government took adequate steps to foster competition, and ban anti-competitive tactics. We've already seen many attempts recently, such as Apple Pay, to undercut the credit card companies fees, while still allowing cashless transactions.
Overall, cash is a pain to deal with. If I never had to touch cash again, I'd be a perfectly happy man. I don't think the government should take steps to discourage/ban the use of cash, but if private merchants and individuals decide to abandon cash, the government certainly shouldn't interfere with that decision. The current benefits of using cash can certainly be replicated and had, even in a cashless society.
FWIW, the patents on blinded signatures have come and gone. E-cash based on blinded signatures has the critical property of untraceability that Bitcoin lacks. However, the system must be run by a real-world institution ("bank").
It's quite clear that the existing power structure "wants" to hinder anonymity, whether deliberately for more control via Orwellian crimes like "money laundering", or just emergently where no party wants to get stuck holding the bag in our defective soft-money banking system.
Cash is basically what we've got in the medium term. I've personally gone back to using cash for groceries and other various sundry purchases, because pushing back against the government+corporate surveillance panopticon is the right thing to do. This idea of anonymous e-payments is completely hypothetical until eg a proper replacement for Bitcoin arises that has untracability and can withstand nation-state attacks.
I'm under no illusions about its anonymity though - every note has a serial number right on it. It would be prudent to assume that banks record the serials of bills that are withdrawn and deposited. I don't actually think this is happening at the consumer level just yet, but I'm sure the diktat has been drawn up and is just waiting for the right 24 hour tragedy.
> You buy the prepaid debit-card using your regular bank account, and then use that prepaid debit card to conduct anonymous transactions.
Cash is mixed by changing hands multiple times before being deposited, so even recording the serial numbers at withdraw and deposit time yields little information. Notes frequently pass between people who don't even know each other. At best you might be able to make some assumptions about where people shop regularly, but there's no mandatory database of what is purchased.
Your suggestion is not anonymous at all. Prepaid cards can only be anonymous when purchased with cash, and even then they can be traced back to the merchant who sold them who may be able to identify the buyer. (eg. Cameras, known to staff, etc)
In addition to other bad things already mentioned, any government enforcement usually comes with "prosecutorial discretion" -- freedom to choose whom to prosecute and whom to ignore.
Tracking all money spent would give a huge additional opportunity to many government agencies to harass those they find obnoxious. I have little doubt it would get misused very soon.
It's a wonderful way to fight things governments don't approve of. For example, generating a list of every person who bought food / water / whatever at a protest.
The meme that banning cash is a useful way to fight tax evasion is hilarious propaganda. Unreported cash transactions are tiny compared to the tax avoidance and evasion done by businesses and the rich. Banning cash doesn't make big business pay a real tax rate, nor does it prevent profits from being hidden in overseas accounts.
Blaming low tax revenue on cash is a convenient distraction. When everyone is focused on their fear that the average citizen might get away paying less taxes, nobody notices the people cooking the (non-cash) books and/o buying legislation.
Depends on who is doing the tracking and for what purpose.
I prefer societies that expect people to do the right thing and have measures in place to deal with anti-socials than societies that expect people to do the wrong thing and therefore try to control everybody for it.
Oh no, not communism! Everyone knows that's the worst thing ever!
The American demonization of communism is a bit tiresome. You can't use the word "communism" as a conversation-stopper, it's not an argument, it's a fallacy. It's like saying "so you're basically Hitler".
And I'm tired of people underestimating feloniousness of communism.
Just for your information: communism, as in Soviet Union, accounts for more victims than Hitler and nazism. They might not have built gas chambers, but trying to deliberately starve the whole nation (Ukrainian) to death isn't much better [1].
Unfortunately, at some point of WWII Stalin became US and UK ally, so still some political correctness prevents West to freely speak about communism and it's crimes.
So all things considered communism actually is "the worst thing ever" and nazism is a close second.
Your should fear totalitarianism, not communism. Soviet Union was totalitarian state, but there was (and there are) many other bloody totalitarian states, which don't used communism as ideology.
True, not every totalitarianism is communism, but, as Leszek Kołakowski proved in "Main Currents of Marxism" monography, totalitarism is deeply ingrained in communism ideology. Every single country that was ruled by communists long enough ended up being totalitarian regime. There are no known examples of country being democratic and communist at the same time.
Nominal democracy and nominal communism didn't exist in the same country because they were each belief systems of different empires. The ideas themselves are certainly compatible, both being just different takes on collectivism.
Violating an entire population's right to their property, and to engage in economic activity with other consenting adults, is evil on a nightmarish scale.
I think communism to be a very good thing, and would be a great economy. But nash equilibrium will never work with humans. We are too egoist (that isn't necessary a bad thing) for it to work.
I want tracking by the government because I don't believe in humanity. With the caveat that the same spying that is done on citizens should be done (and more) on politicians.
> I want tracking by the government because I don't believe in humanity.
What do you think the government is comprised of? If you think communism is unworkable because of human nature, what makes you think that getting the people who make the rules to make rules against themselves will be any easier?
If you don't believe in humanity, you can't believe in any system.
Communism is the purest form of ideals: it assumes people will recognize and do the right thing because it's in their best interest collectively.
Capitalism abstracts over the ideals by offering money and property as incentives. By the nature of abstraction, a lot of the original value is lost and people mistake the incentives for the ideals.
Statism goes further, and whether or not it incentivizes the ideals, it centrally enforces them. But it's so far detached from the original ideals that it's not even enforcing the right things anymore.
So again, in the end, if humanity is incapable of communism then no system will save us.
The problem with communism is that, in order to work, it requires a version of humans that would render communism redundant.
At least capitalism works with the nature of humans and proposes kind-of, sort-of okayish incentives. Unfortunately, you are right, ultimately no system will save us.
The tyranny of the majority assumes that issues are always us vs. them, i.e. two choices. Often there are more than that and then no changes by government can be made. The two party system often masks this possibility.
Yes and no, and it all depends on what the black market consists of, if the laws are actually in line with the will of the vast majority of folks' morals (including those that aren't part of the majority), and things like that.
Do you want to have to report that you gave that teenager down the street $20 to mow your lawn, for example? That can make you an accomplice in tax evasion if the teen doesn't report that $20, and might make you run afoul of labor laws (after all, they probably couldn't work for a landscaping company because of dangerous equipment). You are unwittingly taking part in a black market at that point.
Now, if the data is used to make laws that are actually followable and allows for normal things such as the above to take place (which would make for a great deal of changes, including drug laws), maybe it would be a good thing. It would also need to be open enough for citizens to also track government spending and other things - otherwise, it would just be totalitarian.
Everyone here seems to be paid to say how bad tracking is, then on other thread you see people say they love Apple, windows 10, gmail reading their email.
I vote my government and they do what I ask for (this democracy after all) and I think payment tracking is a good thing especially for tax-evasion.
Nobody votes for those corporations and still there's people that love to have their privacy violated.
(I'm not putting too much effort in these comments because HN is a big bubble where tracking is bad, encryption is good and the same people advocating for privacy use proprietary software meh...)
Using a specific company's technology is a choice. Participating in government is not. I'll always take a company I choose to track me over a government that does it by default.
Using a specific company's Technology, in today's socially networked world, is a choice that you impose onto your friends, family and fellow citizens.
I send you an email to your Gmail account, Google reads it. You choose to use Apple products, companies are forced to comply to Apple's unilateral and unaccountable app store policies, likely dropping other distribution platforms or 3.5mm audio jacks in the process. You give critical mass to the payment system of your choice, businesses and governments drop the ones they don't like or need anymore.
Your choice is not just your own, it's a choice that you make for all the rest of us as well. I have no say over what options I get deprived of because of other people's choices. That's why we have government, because as a society we need a way to prevent you from screwing over the rest of us following your poor choices that give power to companies that use it to my detriment.
If your choice only affects you, do whatever you want. If it affects all of us, let all of us decide on it together.
If I choose to use an email system that you don't like, you don't have to participate. Participation is non-compulsory. You can refuse to reply to my emails. You can refuse to send to services you don't trust. You can choose to use one payment broker or another.
Half of the problem with cash could be solved by ending the war on drugs. The war on drugs has created a class of people whose main economic function is to transfer wealth from the public to the worst people in society. This is a many-headed monster that robs/burglarizes/steals money from average people, and vacuums it into a global system of money laundering. The cost is mostly absorbed through higher insurance premiums and more costly welfare schemes. The physical needs of this class of people are often carried by family and charity.
No cash could kill this, but so could treating drugs like simple agricultural and/or chemical products and regulate the distribution.
All costs of the war on drugs are covered by the public. All profit by heavy criminals.
Sort this first, and then get back to cash and its utility in evading taxes.
This is mixing up "cash". Cash is produced by your country's mint (a public body), and comprises around 3-5% of available on-demand "money".
Private banks produce electronic debt which is fungible with "cash". This is available "on demand" as cash but only if you wish to withdraw less than the 5% which has a physical representation. The rest is available on demand to transfer as electronic banker-debt/credit into another part of the banking system.
The vast majority of the private bank debt is issued via lending against land.
I don't take issue with the use of cash in the drug trade, I'm unconvinced removing cash would see this fixed, most likely barter would take place instead.
I just wished to take issue with the fast and loose "cash is public".
How currency comes into existence is a different topic.
I agree wholeheartedly that bartering is the logical continuation of the drug economy in a cash free world. Maybe some pseudo currencies would also arise, creating black market banks.
Money is power. We, the public, ought to stop propping up cartels and giving power to drug lords. My suggestion is to try that first, and then see what problems remain with cash.
I've never heard a credible argument of how a fully cashless society could operate under conditions of natural (or man-made) disaster. The multi-day blackout in the Northeast US, flooding, tornado, earthquake recovery, targeted cyber attack, etc.
The idea that because the electronic payment system is readily available on all of the "good days" doesn't mean it will be available at a time of strife.
Cash works without electricity, without phones, and without network. That's a killer feature.
I distinctly remember stores having to use the old-fashioned "knuckle-scraper" credit card machines after hurricane Katrina in Baton Rouge because phone lines were down. It basically took an impression of the card from the raised letters of the card.
Not many places had one of these and some just had to close because it didn't take long for all their customers to run out of cash without atms. Nowadays my credit card doesn't even have the raised bumps anymore. The knuckle-scrapers were a wide open vector for fraud but did at least work in a natural disaster.
Basically nobody hoards all the money at home as cash, so people would just have a bit of money. Almost no difference.
How could you still buy stuff then? Debt! When you buy something your name will get noted down and how much you owe. When the systems are running again you will pay off your debt.
It depends. A couple hundred was sufficient for us when Hurricane Wilma knocked out power across most of South Florida in 2005, but we happened to be in a pocket that had power, were surrounded by family and friends with food and other resources, and didn't really have to go anywhere or do anything. YMMV, but be careful with the idea that you don't need any. The ATM's and card swipes work until they don't.
Once an intermediary feels secure in their position, the temptation to use the position to further other goals becomes pretty irresistable. Consider Square:
They are actively seeking to erode 2nd amendment rights. What other do-gooder impulses will Square pursue? Perhaps they'll next infringe on our 1st amendment rights by prohibiting payments to organizations they disagree with.
We see the same thing with speech brokers such as Facebook. Want to exercise your 1st amendment rights? Not on our platform!
"2. Your gun will avail you absolutely nothing when the government comes to you with a Predator drone. You will not "prevent dictatorship" by your gun."
I don't know that guns "prevent dictatorship", as you put it. North Korea is a good case in point - plenty of guns there but the leader retains his position. He's likely to die violently though, so I would tentatively post that one to the side of the guns people.
Guns sure can wreak a lot of havoc, e.g., Archduke Ferdinand, Abraham Lincoln, JFK, MLK, Malcolm X, Yitzak Rabin, etc. Guns are cheap and (relative to drones) easy to make. They can be deployed with a form of AI: a human being willing to risk death or too dumb to know better.
At the current prices, I don't think any current government can afford to deploy Predator drones against all of their gun owners without facing serious consequences(bankruptcy, revolution). Perhaps, given time, your fantasy will become fact.
But I would expect that, if drones are cheap, gun-owners will also be drone-owners. Perhaps someday hunters will drone a passel of rabbit or squirrel from the comfort of their living room, have Google drones deliver the fresh carcass to a processing facility and the dressed frozen meat to their back door? Mmmm, something to look forward to, eh?
The point is, this is something for the people to decide, through the established constitutional amendment process. Do we really want a company like Square deciding that it is OK to abrogate our rights?
Also, according to the link, the Obama Administration is using Operation Chokehold to pressure the banks to do something that they'd never get a law passed to accomplish. What happens when the next admin comes in and does the same things to prohibit things that they don't like?
I greatly prefer the rule of law to the rule of lawyers or bankers.
That's a fantasy view of how military engagement works. The whole argument that the US military has advanced tech, particularly air power, therefore “your guns” are useless is demonstrably false. If it were true, you wouldn't have Vietnam, Iraq, Afghanistan, etc. Having millions of people armed with things like AR-15 or AK-47 is an effective form of dictatorship prevention.
The problem, however, is that you have to have those people actually want to fight a dictatorship. I don't live in the US, so I might be wrong, but it seems to me that most people, not all, most, in the so called gun culture there are more than willing to bend over and be servile to authorities, with dictatorship prevention being just a noble sounding excuse to have fun shooting soda bottles in their backyards (nothing wrong with that).
The government still does have better resources, though. Times have changes a bit from the 1700s in that the most modern things available to the two parties are not the same for both sides anymore.
Governments always had better resources. Until they didn't. The only way a government has resources is by people providing the resources by doing work. Once people collectively deny work, it's game over for the government.
As for the 1700s, all of the wars I mentioned happened in the second half of 20th, and early 21st century, with a gigantic asymmetry in almost every relevant resource. Yet, in all three examples it took the US a whole decade of trying to win and then get a graceful exit, if that, against, basically, people with AK-47s and improvised bombs.
natural disasters, riots, and home invasion are far more realistic and likely threats, funny nobody talks about these, because they happen all the damn time here in the US.
I'm under the impression that “gun culture” people mostly obsess with exactly these things? This is in a way a dual of what I was saying, they far more fear and obsess over the threat of their metaphorical neighbor then they do about the government. I think that is the problem with the gun culture in the US, not the guns.
Whether or not you support the 2nd amendment, it has the majority support of the US people.
It's evil and dangerous for massively powerful companies (especially monopolies like Facebook) to marginalize the political right just because their leadership are left-leaning.
Lol. So a private company deciding not to do business with guns (and tobacco and whatnot) is apparently eroding 2nd ammendment rights? Well I, a private citizen, don't have a gun in my house, I guess I am eroding those rights too?
So long as you have the right and the ability to ignore that private company I agree... the company's choice in no way erodes your rights.
BUT, if merchants stop accepting cash, and only a handful of financial companies control your ability to accept and spend money, THEN it's no longer irrelevant. Have you read the stories about payments being stopped because the memo field happened to contain the word "cuba"? Have you read articles about how difficult it has been for Marijuana companies to operate in US states where it is now legal because banks refuse to provide them with support (no loans, no credit card processing, etc). What if that kind of moralizing were targeted against guns, doing an end-run around the 2nd amendment because it's technically not the government doing it? Or for that matter, what if ANY right that isn't particularly popular were targeted in this fashion?
Pick a hobby you care about. Like 70's muscle cars. Do you have any idea how much pollution those things put out? A major government agency spends much of it's time monitoring the industry that built them. Now imagine that the agency goes to Square and says "We'd like it very much if you didn't facilitate purchases of these vehicles, so it'd be great if you no longer allowed transactions for the cars, their parts, and gasoline additives for them"
While owning a classic Mustang isn't a constitutionally protected right, how would you feel if you got marginalized by government fiat?
A non-sequitur. You, as a private citizen, are not in a position prevent someone else having something by not having it yourself. A company, private or public, whose business is arranging for people to get various stuff has the potential to erode people's rights by not letting them get stuff.
And furthermore, private citizen =/= private company, no matter what Mitt Romney would have people believe.
I don't know what Michael O. Church did on Quora, but when he was (hyper) active here he ruined this site for a while. His post volume was too high, and it was always the same open allocation/stack ranking rant, over and over and over and over.
Take a look into his ban from Wikipedia and what he did there.
I recall him commenting for a good while before his comments went "downhill" [0]. The pattern seemed like some event knocked him out of the bubble, causing him to lose faith in some aspect of groupthink and then become frustrated and combative over time. This would jive with his above narrative, but many other stories could explain as well.
[0] Even these had some good truths in them, but yes they got repetitive.
By bubble, I mean the memetic assumptions that any culture takes for granted. They generally only get questioned when some event happens that causes an individual to doubt a prevailing narrative. Usually, that individual then seems crazy to everybody who is comfortable leaving said narrative unquestioned.
I definitely saw insightful comments from him, so I'm not not going to speak up. I was merely hedging my assessment because it's impossible to discern justified from unjustified paranoia [0], especially merely observing via a forum.
[0] I hate when this word is used as a pejorative, but I don't intend it as such. Much paranoia is justified.
> By bubble, I mean the memetic assumptions that any culture takes for granted.
Oh, I see. Like slavery, religion, or when people talk about morality without knowing there are different moralities, or the unquestioning love of the state. AKA mass ignorance. Or more benignly: tradition/mores. And on the positive side: protocols.
Nope; I have no idea what went on on Quora with him. I haven't heard his name in a long time. I just know that he ruined this whole site for years. If we had had the [-] button at the time it wouldn't have been so bad.
"There's huge interest in cryptocurrencies and what perhaps they can create in the market place. Now we at MasterCard are not completely comfortable with the idea of cryptocurrencies largely because they go against the whole principle that we've established our business on which is really moving to a world beyond cash and ensuring greater transparency.. If you think about it, cash is a problem for a number of countries. Cash really facilitates anonymity, it facilitates illegal activity, it facilitates tax avoidance and a range of other things that aren't going to drive efficiency in an economy"
Says the guy who stands to make ~3% of every single transaction that is deanonymized. For more clarification of how cashless would save us, look into BofA & Wells Fargo's not so distant past laundering of illegal guns & drug monies from Mexico, sure they paid fines & promise to be more diligent. Around the same time was the Wikileaks payments freeze across multi platforms(Guv mandated). Sounds fair & equitable for all who can afford justice.
The destruction of privacy also means that the minority has zero protection against the majority. If the majority imposes an oppressive law, like prohibiting financial transactions with people of a certain nationality, or requiring people to hand over 1/3rd of their income for programs that enrich the political establishment and their donors, there is no way to circumvent the law.
More to the point, there is no way to protest or circumvent spurious fees and charges that always follow lock-in to any system. Some charges certainly are justified, but accompanied by many purported new fees and "errors". This is already abused by every telecom & public utility I have dealt with over the past 25 years, and it could only get worse as freer access is secured. I would never give a major monopoly service provider free access to my accounts today to "conveniently" auto-pay my un-scrutinized charges. They are entitled/entrenched beyond retribution excepting the most extreme trespasses and regular 'nicks & dings' on billing cycles in hopes of not being noticed is the norm. Unearned revenue is profitable when it nets > the penalties, if penalties ever were imposed.
This is not possible today. It is very easy as a government (often something bitcoin people rant about) to bulk transfer wealth from the population to a preferred group, since you have control of the mint. Which is why the mint (reserve bank) is, in all functional countries, a standalone entity with independent decision making power about currency creation.
The idea that digitally tampering with bank accounts would not be noticed or reacted to, but softer measures like inflation rate meddling, or stealth measures like doing a currency re-issuance and controlling how hard it is for people to exchange old money, is absurd.
Not to mention you've managed to ignore the fact that only a tiny fraction of circulating cash is physical cash anyway.
In terms of protecting rights, this is one of the worst, least effective ways to do so.
>The idea that digitally tampering with bank accounts would not be noticed or reacted to, but softer measures like inflation rate meddling, or stealth measures like doing a currency re-issuance and controlling how hard it is for people to exchange old money, is absurd.
Who said anything about "digitally tampering with bank accounts"? The situation today, where the bulk of transactions are done through large trusted third parties, which act as deputies for state regulatory organs, means that there is no expectation of privacy in most financial transactions, which increases the power of governments (meaning the political majority of countries) to enforce majority-supported laws that restrict voluntary exchange.
It's certainly true that physical cash does not protect against inflation, but the idea this is the only major method by which governments redistribute wealth is false. Taxation is the main way in which governments raise revenues, and destroying privacy increases the ability of governments to tax.
>"In terms of protecting rights, this is one of the worst, least effective ways to do so."
It is the absolute most effective way to protect rights. Furthering financial privacy increases the protection that the politically disenfranchised have against those with political power more than anything else. Money is power, and having privacy in your usage of money means your power is protected.
> Furthering financial privacy increases the protection that the politically disenfranchised
Wow. This isn't even supported by any of America's notable civil rights successes of years gone by, whereas the entire history of political corruption is enabled by the wealthy's use and access to opaque financial instruments.
I guess you don't consider economically inhibiting regulatory prohibitions, in place in countries all over the world, that funnel economic activity through politically connected gatekeepers - at massive economic cost to the politically disenfranchised masses, or trillions of dollars in taxation to enrich the political class, or sanctions targeting every person of a particular nationality, or the multitude of market prohibitions, like those on drugs, or socialist policies put in place in countries like Cuba and Venzuela - to be forms of oppression inflicted by those with power on those without.
You don't seem to appreciate that it is the ability to transact privately that enables people to circumvent all of the above-mentioned laws.
> He (Kenneth Rogoff) argues that, apart from facilitating crime and tax evasion, cash hampers central banks from setting negative interest rates.
I think a lot of the "war on cash" boils down to this. Central Banks want to impose negative rates on us to try and get us out of the mess of having too much debt in the system. Cash makes this difficult.
Two points: First, the economic logic of negative rates is actually to try to incentivize the private sector to create more debt.
This isn't completely absurd. Slow economic growth quite often boils down to a lack of spending. One way to get more spending is by having the private sector take on more debt.
I think this is a bad idea, considering how the global financial crisis was caused by too much private debt in the first place. It would be better to increase public debt, at least in countries with monetarily sovereign governments, since there is no risk of default and the financial chaos that goes with it.
Second point: I've been hearing voices against cash since before negative rates became a thing. So while they're certainly a factor, they're far from the only one.
> Central Banks want to impose negative rates on us to try and get us out of the mess of having too much debt in the system
Of course, lower interest rates encourage more debt. So if they are honestly trying to do this, they're doomed to failure.
(I model their activity as self-interestedly creating as much debt as possible to further erode the ability of plebs to save, siphoning all economic surplus to them back as rent)
Reduced, including negative, rates are a stimulus measure, designed to (in the short term) increase borrowing (and therefore overall economic activity), not decrease it.
Generally, central bank monetary policy is driven by measures of economic activity, unemployment, and inflation.
I wish I could upvote this ten times. This is the clearest and best written exposition of what cash really is and why it matters that I have ever seen. Well worth taking the time to read the whole thing.
> We are fighting a broader battle to maintain alternatives to the growing digital panopticon that is emerging all around us.
This is just one of the aspects that support stronger governments and corporates that put the interests of themselves and a tiny section of the population (those who help these get even stronger) above everything else. While some people discuss about this or mass surveillance or tracking, most of the populace isn't even aware how liberties are being lost and how "the power of the people" is becoming more of a carefully constructed mirage. Things seem to be moving in the direction of a dystopian society where appearances mask reality and common people are kept complacent with entertainment and other things to keep them occupied.
I don't see a cashless world happening in the next few decades, because it will take a lot of work to get people out of poverty first while some entities focus on removing cash. Even if it were to happen, a cashless society would still have many different pseudo-currencies and barter systems (like those that exist in different contexts and systems today). What's worrying though is that in the future many goods and services may become inaccessible (if one wants to avoid electronic transactions) unless one resorts to the black/gray/underground markets.
here are the alternatives to the new status quo of totalitarian democracy:
1. leave
2. revolt
seriously, that's it. we lost the first dozen encounters with totalitarianism, so now options are limited and undesirable. widespread witholding of labor/ consent to be governed is the next step if we are serious about change.
politically, we're on the downward slope for at least another 8 years...
"Revolt" doesn't work because democracy provides a pressure relief valve that prevents any significant mass of people from wanting to revolt. Notice how the "hopeful" prepper culture is based around passively waiting for things to "inevitably" fall apart rather than actively forming a militia.
"Leave" doesn't work because there's no place to go. The US empire is nearly everywhere, the best you can do is escape to the different monetary spheres of Russia/China and buy some time.
IMHO our two options are 1. digital freedom through cryptography, or 2. become slave cells of a larger organism.
The first is a fucking long shot, but I don't see any other possibility for individualism.
Then again as I get older, I can't help but shake the feeling we're really just observing bog-standard societal collapse.
Am I the only one who found it sadly ironic to read this on a site that pops up the warning, "We use cookies to help us improve this site and your experience. Continue to use the site if you’re happy with this or click to find out more"?
Except hn cannot imprison or tax you. The problem is not tracking but give more power to something overly-powerful. Same thing applies to corporations.
I was expecting yet another puff piece on the advantages of some app-based alternative. A good exploration of some of the disadvantages of cashless society.
Only thing they have missed is the indirection of cashless - the further you are from actual money, the more you're likely to spend, especially impulsively. Works for credit cards, game currencies, and undoubtedly for cashless apps.
I agree with you, but in not sure I'm right in that. Chances are that, centuries ago, people used to say "further you are from actual gold, the more you're likely to spend, especially impulsively". So, people could/might become used to currencies that are even less physical.
Also, before banks provided credit, people used to run up bar tabs not only at bars but also at their grocer. Maybe, the thing to fear is credit, not money being virtualized?
"Chances are that, centuries ago, people used to say "further you are from actual gold..."
I've never considered that angle, and you may be right, but centuries ago 9 out of 10 or more spent to survive rather than consumerism. We may become used to them, but I'm not sure how comparable the two eras can ever be.
I've also seen enough reports on the topic to see that paying via plastic (both debit and credit) leads to higher overall spending. There's countless gamasutra type articles explaining the income benefits of tiers of virtual currencies. Game monetisation seems to have been researched well enough that most freemium have ended up with a combination of soft and hard currrencies, with deliberately unusual prices, and a remarkably similar set of price points for a bucket of gems. They're not all ending up there as customers spend less.
I once got into a car accident on a friday afternoon. It was on a highway, so my car was towed by scumbags who insisted on bringing it all the way back to their facility rather than anywhere useful. Obviously they wanted to require me to come back later, store it all weekend, and rake in more ill-gotten gains.
I demanded my car be released as soon as possible, to which they tried to dissuade me that it would be a lot of money, they didn't take credit cards, they were technically closed so if I went to an ATM they wouldn't be there when I got back, etc. I stood firm since none of this was a problem, bailed my car out, and successfully avoided being further gouged by their racket.
If you don't see the utility in carrying cash you're basically asking to be taken advantage of, in both the immediate and long term.
This article fails to touch on who issues the money. In particular in the example of the Rai stones it fails to ask what if the ledger keeper could magic up stones all over the island to capture labour by eroding the value of the current stones.
Really for me this is one turtle down the stack and he needs to ask who creates credits and what that means.
edit: and right on queue in my twitter feed an article on money creation as theft:
Tracking isn't the problem to prevent tax avoidance at the point where avoidance becomes immoral.
UK last month: Grosvenor dies leaving 9bn GBP in land to his son. We have inheritance tax in the UK, the son should have received a bill of several billion which would fund our health service.
They know where all the assets are, but the UK govt has a special loophole for rich people: trusts. The son inherits the full 9bn GBP.
It's all tracked but the UK is totally corrupt.
Given the above example how will the state act against the rich when all "money" is tracked because it's electronic? They won't touch them.
> UK last month: Grosvenor dies leaving 9bn GBP in land to his son. We have inheritance tax in the UK, the son should have received a bill of several billion which would fund our health service.
The Grosvenor family have spent the centuries since 1622 — when Sir Richard Grosvenor was created a baronet by King James I — slowly building up their family fortune. In 1761 Sir Richard Grosvenor, Bt, was created Baron Grosvenor; in 1784 he became Earl Grosvenor. In Robert Grosvenor, the second earl, was created Marquess of Westminster; in 1874 Hugh Grosvenor, the third marquess, was created Duke of Westminster.
The family has distinguished itself by long and loyal service to the Crown and to the people of England. I fail to see why the new Duke should be forced to see the fortune his ancestors have spent centuries building be diminished so brutally.
Bitcoin can be used anonymously with a little understanding. The ledger is immutable and permanent, however a party is only identified by their public key, and the chain of transactions that carried money to that key. If you can't associate that key with an actual person, we consider that pseudo-anonymity.
Here is a tip, anytime you a filling up on petrol check your pockets first if you find some coins as you are bound to have some, then add them up
For example last time if filled up I had a 10euro note in wallet and had about €5.60 in coin change so I just filled up petrol for €15.60 since its not hard to fill up down to a cent amount
This works much better in Europe or Canada than in the US... US pocket change is effectively worthless, since the largest denomination coin in wide circulation is the quarter. Unless you are carrying around (physical) pounds of change, using it for anything beyond laundry, vending machines, or parking meters is impractical.
1 & 2 euro coins, on the other hand, are pretty convenient for small purchases.
Though that's also somewhat of a feature with respect to US change. I can just dump it in a bucket at home to get turned into "real money" with a coin counting machine someday.
Quarters are also sometimes still useful for parking.
What stops banks from implementing a negative interest rate today? Practically nobody keeps a large amount of savings in cash. Such a policy would be really lousy in a society where retirement planning is largely a private affair, though.
It could be that, faced with a -ve rate, account holders can simply withdraw everything from their account, thus no revenue is generated for the banks and no guarantee that account holders aren't hoarding their cash instead of spending it.
If I keep $1999 in my account the bank charges me $5-$10 a month to hold onto it. I'd wager over a third of the country has less than $2000 in their checking accounts at some point during the month.
This might be a naive question, but has there ever been a successful non-profit bank-like financial institution?
As I was reading this article I thought of iPredator.se, which provides a non-tracked VPN service. Their USP is "We don't track anything you do". I wonder whether there could ever be a cashless option that offers a similar service. This of course would only address the concerns of privacy and profit-driven interests, and not the other serious concerns raised in the article.
Has there been/could there ever be a bank like that?
In Germany we have GLS bank which is for profit but has a strong ethics code about their investments and try to maintain high standards of transparency.
Well if someone comes up with, and popularizes a system that can actually replace cash then we should consider it. I would be thrilled to use something like bitcoin or taler to pay for my groceries. In the mean time we are stuck with physical cash. Credit and debit systems are good for some stuff but are simply not technologically advanced enough to replace cash. In fact, actual electronic cash would to some extent make credit and debit obsolete, as well as causing a great many other changes.
"Much fintech 'disruption'..." revolves around eliminating slack and incompetence of the low grade employees. Once you've tried services of an average investment banker, and paid 1% entry fee,1% exit fee, and 1% annual maintenance fee, you'd see fintech needs in a different light.
This is temporary. Contactless payments will change that so that electronic payment becomes faster than cash for small transactions (as is already happening in many places).
I like cash too. I'd like to see a smart start up do for cash what Square did for credit card payment. A super simple way for a small store to manage it.
The cashless society is hugely convenient though. Wouldn't it be better to accept that it's inevitable, and solve the privacy issues?
For the year 2016, and excluding rent, 3.1% of my expenditure has been cash. I've used an ATM five times. [More-or-less; foreign spending isn't on this statement. In Germany I use more cash, in Norway I didn't use cash at all.]
The convenience argument is complete nonsense. Personally I hate dealing with physical things like writing a letter, buy an envelope (well, buy 20 when I need one) and a stamp and mail it, but cash is really the single most easy physical thing to deal with that I know of.
It depends on the cash. I suspect that a lot of the cash-hate is supported by experiences in countries with badly designed cash. Compare e.g. the US$ and the Euro - the latter one is well designed, the former isn't.
Other cultural factors come into play, again the US comes to mind as negative example due to the way prices are usually displayed without sales tax, which makes it hard to have the correct change in hand quickly.
I'm European and recently visited the US, so I'll describe what bugged me about dollars. All bills are the same size and color, making them Very hard to distinguish at a glance. The coins are mostly useless, as the largest commonly used denomination is the quarter. The five cent coins is also ridiculously large (but nothing compared to the British 2p coin...)
In contrast, Euro bills' size increases with value (easy access in the wallet if you keep them in sorted order) and they are easily distinguished by colour. The largest commonly used coin is 2€ ($2.25), which is actually worth something and doesn't jut clog pockets/wallets. I do wish we'd get rid of the 1c and 2c coins, though.
I actually hate the different size bills of the EU (and other nations).
It makes carrying a decent amount of cash a huge pain, since I usually don't put it in a wallet. US cash I can fold up and it stays very well organized, EU cash turns into a crumpled mess in my pocket.
It's a minor complaint, but I do prefer a uniform size. The colors though are spot-on, and the US is slowly starting to change that. The new $100 bill is easily visually distinguishable from any other bill just due to the color.
These have clearly been designed to be distinguished. They're different sizes and different colours. One side has a bold number and a bold shape (circle/diamond/square). The other has a monochrome (but not black!) portrait, plus a picture with reasonable contrast.
By comparison, the American notes all look very similar. A black-and-white portrait of a man, centred, with a black circle to the left and a green circle to the right, with dark borders to the top and bottom. Numbers are in a traditional, unclear font. Slight colouring exists on some values, but only in the background, and the colours aren't far from a green-brown. https://upload.wikimedia.org/wikipedia/commons/6/64/USDnotes...
Sure it isn't hard to figure out the denomination of a given bank note, but that's not what I'm talking about. If I shuffle the notes in your wallet and tell you to get a 20 out, you'll have to go through them one by one. If you do the same with mine, I go for the medium sized blue note.
Related: how do blind people distinguish dollar notes? I know a blind guy who recognises euro denominations by their size very reliably.
Not commenting on currency, but I enjoy visiting countries where taxes are calculated into the menu price, which also tend to be nice round numbers. No more estimations on what stuff costs (level of taxes can change with a 20 minute drive), you always know and making/having the right change is easy.
Solving the privacy issue would be great, of course, but much more challenging than your one line would indicate (while keeping up with other benefits of cash, e.g. it doesn't disappear when I run out of battery, ...).
Meanwhile, a private company now knows an incredible amount about you and is potentially willing to sell that information to advertisers, give it to the US government, or get hacked and give it to everyone.
