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Why we should fear a cashless world

292 pointsby mantessoabout 9 years ago

32 comments

carlobabout 9 years ago
Here in Italy the big issue is that many business will just not declare cash transactions. It&#x27;s pretty common not to be given a receipt when buying a coffee and often when you visit a doctor they&#x27;ll say: do you want the invoice or a discount?<p>A couple of friends got married recently and I found out they paid over half of what the owed in cash to get pretty decent discount.<p>So before we talk privacy and company let&#x27;s remember that this kind of hidden economy has a huge cost for society and it&#x27;s very widespread in southern Europe.
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mikegioiaabout 9 years ago
I&#x27;ve been &quot;cash only&quot; for 8 months now and I love it. Of course I need a credit card if I buy something on Amazon or a one-off web store, but the point is to move as many transactions offline as possible.<p>There are so many privacy benefits to using cash, but one that really resonates with me is the physical nature of it. When you pay for something with cash, you can feel the transaction of money exchanging hands and it can have a psychological effect to prevent frivolous spending. Or at the very least, further reinforce that YES we are spending money!<p>Also, store clerks, cab drivers, any anyone who accepts tips always love getting cash.
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fennecfoxenabout 9 years ago
&gt; We already live in a world that is, as far as the &gt; distribution of wealth is concerned, about as unequal &gt; as it gets. It may even be as unequal as it’s ever been.<p>Sure, if by &quot;a world&quot; you mean &quot;a hyper-prosperous nation like the US or the UK&quot;... and if by &quot;unequal as it&#x27;s ever been&quot; you mean that <i>third-world countries are taking our jobs and becoming much more prosperous, hitting our middle income brackets - the global 2% - harder than anyone else.</i><p>If you really mean <i>globally</i>, then inequality is in fact falling.<p>But sure, yes, the &quot;cashless&quot; ideas going around today are just a way for the government to enforce surveillance and steal away citizens&#x27; money with negative interest rates.
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yAnonymousabout 9 years ago
The push for a cashless society and negative interest rates doesn&#x27;t paint a good picture about the future of our financial system. It&#x27;s nearing its well deserved end.<p>The bubble is about to burst and they&#x27;re trying to release pressure to make it last a bit longer.
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staticelfabout 9 years ago
The best tip ever for saving to only spend cash. When you have the physical money leaving your hands it feels like a lot more than inserting a card and pressing a pin code.<p>I am mostly using cash if I have the possibility to, which is kind of annoying sometimes since in Sweden (where I live) there are many &quot;cashless&quot; shops. Even in normal grocery stores checkouts it&#x27;s like 50&#x2F;50.<p>I&#x27;ve never visited a country that has as strong opposition to cash as in Sweden. One time I walked into a boutique trying to purchase a cellphone and the salesmen there were happy to help. Unfortunately they told me that they didn&#x27;t accept cash and then I just said &quot;then there&#x27;s no deal&quot;. The look on their faces was kind of fun, even if it sucked that I had to redo the whole process.
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eveningcoffeeabout 9 years ago
Not only is the surveillance problem, but when all the peoples money is in the banks, banks have more control to charge people for &quot;handling&quot; their money, so not just negative interest rates are the problem.<p>Also when all the money is in the banks, governments have much more freedom to apply higher tax levels or just take the money.
pm24601about 9 years ago
With a cashless society, there are third party entities that decide:<p>1) if the payment will be honored ( legal pot growers &#x2F; legal sex workers &#x2F; donations to wikileaks have this problem<p>2) the payment will be possible ( is the bank systems functioning )<p>3) how much of a cut the third-party will take from the transaction (visa, mastercard, but also app stories 30% cut)<p>4) who gets to know what was purchased (your bank shares information with the government)<p>5) who gets to know who made the purchase<p>6) who can access money: minors can&#x27;t have bank accounts&#x2F;etc, does someone have access to a banking system at all - lots of people can only cash checks through pay-day lenders
BIackSwanabout 9 years ago
Genuine question - What about a &quot;cashless&quot; currency based on blockchain? (a la bitcoin). Wouldn&#x27;t it be and not be under any single entity&#x27;s control at the same time?
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Shivetyaabout 9 years ago
I think the primary reason is a loss of privacy and freedom. With a digital currency all your purchases can be tracked. You also lose freedom in that government at any level could suddenly make some products or service illegal, throw in that they could retroactively do so.<p>Of course there is monetary policy too. Negative interest rates try to force spending to correct bad government policies which usually are the cause of depressed spending. Then combine this with the idea that printing digital currency is as simply as flicking a switch which would rapidly devalue currency in people&#x27;s accounts.<p>Simply put, its another attack on privacy and the freedom it entails
arca_voragoabout 9 years ago
It&#x27;s nice to see the Guardian writing negatively about the cashless push, and they hit the main points.<p>To me, the main danger of our time is totalitarian governments overreaching in reaction to changes in threat-actor models, and hence most of my primary concerns revolve around the particular issues that touch upon this point. There are two main issues I have with the push to the cashless society.<p>1. Lack of anonymity. Cash serves as a mostly anonymous medium of exchange, which encourages the free flow thereof. That being said though, one of the primary reasons you might want anonymity is from government overreach. For example, there is evidence that in the increasing surveillance panopticon, the gov wants to know what you are reading and purchasing for reading. If you use a cc to buy a book at a bookstore, that is easily tracked back to you and could in the future be used to put you on $list. While cash isn&#x27;t perfectly anonymous, it ups the level of effort to find out (pulling cctv recording to correlate purchase to person).<p>The lack of anonymity has been my primary disagreement with Max Keiser regarding bitcoin as well. To me, I can very easily see a currency upset on the horizon which is then used to push cashless on the society as a new currency model.<p>2. Revocation of access&#x2F;control of assets. In a similar vein to police forces using confiscation as a budgetary padding tool, I can far too easily see the same being applied to cashless currencies. More than that though, is the ability to access the option at all in the first place. As an example for this, I give you the national bank blacklist database. For some people, suddenly being blacklisted by banks can create all kinds of problems, because much of our society relies on banking functions. I fear the same type of blacklist with little oversight could be applied to a cashless currency, to the point that, lets say you were a dissident, suddenly you lose all your money and can&#x27;t open a new account. If everything is cashless, how do you buy bread?<p>The article itself touches on the surface of these matters, but I think there needs to be a much deeper and deliberative discussion about the potential dangers, and benefits, of the push towards a cashless society.
taivareabout 9 years ago
I was living in a rural area where the poor used the underground economy ( flea markets etc. ) to supplement or offset low subsistence , meager wages and I know the poor in urban areas do as well. A cashless society will be a regressive tax on the poor !
vtlynchabout 9 years ago
I am not one to argue that technology solves the problems of the poor. But, there are lots of holes in this argument:<p>1. The unbanked already exist in a world that expects them to be banked. Almost all jobs in America are paid in checks or direct deposit. Checks are useless to people without bank accounts. They then have to spend time and money getting the check turned into cash at a check cashing place, like Amscot.<p>So moving to electronic banking would actually HELP these people. If you really <i>rely</i> on cash, then you are at a disadvantage since most jobs dont pay in cash.<p>Yes, there are real obstacles in the way of these people getting bank accounts. Education, time, documentation, etc. But everyday someone continues to remain unbanked, they are inconveniencing themselves in many ways.<p>2. Cash is already dead to a lot of people (in 1st world countries), so surveillance is already possible. Governments, banks, and payment processors ALREADY have access to this information for a large number of people. If this is a large concern, the author should be tackling the fact that this is on-going, not that it might happen in the future.<p>But it does seem true that killing cash will open up new demographics to the same surveillance.<p>3. Bankruptcy is not a tool used by very poor people. Its often used by middle class and upper class people who deal with the finance world. I think this article has a very poor understanding of what &quot;poor&quot; means, even in a 1st world context.<p>4. This whole article is based off of bad solutions. Keeping cash around so that <i>some</i> people will be saved by withdrawing their money in the next financial crisis is NOT the solution to financial crises. Better regulation, management, and transparency is.
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0xCMPabout 9 years ago
I love being cashless honestly, but I see the benefits of using cash for transactions.<p>My problem is that I usually do things online and plus I&#x27;m always feel much more secure knowing my Amex would be fully protected vs cash. Day to day I&#x27;m not worried I&#x27;ll get robbed, but in the off chance I&#x27;m somewhere where I might I&#x27;m much happier carrying no cash and just my Amex.
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analog31about 9 years ago
In my view, long before the government realizes the full potential of abusing a cashless society, private businesses will have bled us dry -- especially the poor -- with transaction fees.
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joefarishabout 9 years ago
<i>Cash, on the other hand, empowers its users.</i><p>And convenient electronic payments doesn&#x27;t in anyway empower users?<p>Also, if people are unbanked and below the poverty line I would expect they would be more concerned with getting by than &quot;Orwellian levels of surveillance.&quot;
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mapleoinabout 9 years ago
I don&#x27;t understand this argument that people feel safer storing cash than keeping it in a bank. The cash is just as ephemeral as bank credit. With the exception that it&#x27;s controlled by your central bank instead of the commercial banks.<p>Cash can be made useless centrally just as easily (if not easier because of its central nature) and there have been instances of this in the past in cash-only societies.[1]<p>[1] <a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Romanian_leu#Second_leu:_1947-1952" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Romanian_leu#Second_leu:_1947-...</a>
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retrogradeorbitabout 9 years ago
The whole &quot;but criminals use it&quot; is a complete straw man. Yet you can see most people fall for it, over and over again.<p>If we had a totally cashless society, you would see a level of white collar financial and banking crime that would make 2008 seem like a picnic.<p>Anyone who is not convinced that the banking elite are the top criminals needs to watch this very recent documentary:<p><a href="https:&#x2F;&#x2F;www.youtube.com&#x2F;watch?v=eHgbRYgpGGs" rel="nofollow">https:&#x2F;&#x2F;www.youtube.com&#x2F;watch?v=eHgbRYgpGGs</a>
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PythonicAlphaabout 9 years ago
I&#x27;d love to have only electronic money. It would have so many advantages.<p>BUT:<p>The risks of it and the potential for misuse are so many, that all advantages of electronic money are not worth to go in this direction. We are in a situation today, where privacy is one of the greatest assets we have and should preserve. When we loose it, we very likely loose our freedom and essential democracy. Instead we might get a &quot;democracy&quot; that is controlled by opinion-formers and big corporations that make money with our privacy.
scott_sabout 9 years ago
The concern for economic fairness is, I think, a real one. There is a disparity in most economies between the people who are banked, and those who are unbanked. Going &quot;cashless&quot; favors the banked, and that is a problem. I don&#x27;t know how to address this.<p>But, I disagree with one of the authors&#x27; other claims: &quot;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.&quot;<p>This is not necessarily so. Think about another example: let&#x27;s say I order something online, and the store gives me free shipping. Free! For sending me a physical item! How can they possibly come out ahead on that? Simple: because we have a sophisticated infrastructure for sending physical goods to many different places, and the marginal cost of one more item on all of those vehicles - and there are likely to be at least three or four, including several processing centers - is actually rather small.<p>What if, instead, I want that item as soon as possible? Very expensive. Because my item is no longer a marginal-add to a sophisticated system. It is now closer to a one-off, and I have to pay for the service.<p>So what does this have to do with cash? Everything. Cash is a physical item that must be stored, transferred from businesses to banks, then counted at banks, stored and redistributed. Doing this is <i>expensive</i>. There are many small businesses in NYC that do not accept cash, and I have assumed the reason is that completely eliminating this cost - handling, storing and transferring cash - is easier and cheaper for them. We have always considered handling cash just a part of running a business, but it is not necessarily so. In the future, handling cash may be more like overnight-express, rather than free-ground-shipping.
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scrrrabout 9 years ago
The whole cash less payment industry is in trouble, once people realise that they can withdraw more than 50 [USD|EUR|GBP|..] at once..<p>Just kidding.<p>Well almost, since it was what did it for me. I started withdrawing larger amounts, 500 or 1000 Euros, each time, after ending up with no cash too often.<p>And I didn&#x27;t feel the need to use another payment method since. YMMV (obviously).
xixi77about 9 years ago
Many very good points there, and it&#x27;s definitely nice to see this suggested from the left.<p>Although:<p>- &quot;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.&quot; -- I keep seeing this kind of statement all over. It seems really, really hard to believe, presuming that &quot;ever&quot; includes antique or even more recent feudal societies, but perhaps there is something to it -- perhaps it might be true under some measure of inequality?!<p>- &quot;Today more than 6 billion people have a mobile phone&quot; -- similarly, I really don&#x27;t see how this could be true, as it seems to imply something close to 100% market penetration worldwide for most age groups. I can see how there might be 6 billion mobile phones (or phone numbers?) active, but 6 billion distinct people?!
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dangjcabout 9 years ago
If stores weren&#x27;t required by law to charge the same price to credit card users vs cash users, you would see most stores slap a 2-5% surcharge on credit card transactions, because that&#x27;s how much they have to pay to Visa&#x2F;Mastercard&#x2F;Amex. Many people only use credit cards to get points, which is an unfair tax on customers who don&#x27;t use credit cards. I find cash to just be easier to use, and I forego the rewards chasing. Once I pay with cash, I can throw away the receipt and not worry about the transaction ever again. No worry about identity theft. No need to check my statement every month and remember whether the transaction was me or not. Easier to split bills or pay people back. Knowing that more of my money is going to the shop keeper than a large financial corporation.
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dimitarabout 9 years ago
&quot;Cash means total financial inclusion&quot;<p>The author doesn&#x27;t know what financial inclusion means. In fact financial inclusion has seen a boon thanks to cashless payments like m-pesa in Kenya. Thanks to not having to lug around cash and maintain expensive bank branches and offices, some of the poorest countries have made great strides in furthering financial inclusion.<p>People want to eliminate €500, not €5. But even if they eliminated all cash I doubt there would be a catastrophe of the type the article claims; people will use different implementations of the same technologies to find privacy and convenience. In fact wives married to alcoholics in Africa often prefer to store their money in cashless wallets and saving groups, because it is easier to hide from their husbands who might find the cash under the mattress.
galfarragemabout 9 years ago
IMO the real issue on tax evasion is not that people don&#x27;t like to pay taxes. People don&#x27;t like is to be obligated to give money that will be spent in ways that they don&#x27;t agree.
knownabout 9 years ago
Cash is the only way Govt can implicitly (<a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Petrocurrency)&#x2F;explicitly" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Petrocurrency)&#x2F;explicitly</a> (<a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Zimbabwean_dollar" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Zimbabwean_dollar</a>) control 99% population;
phlip9about 9 years ago
In theory, cryptocurrencies like Zcash [1] should solve the issues with transaction privacy. However, enforcing taxation when using a totally private and anonymous currency disconnected from government control would be nontrivial if not impossible. Likely the reason why governments are so against them.<p>[1] Zcash: <a href="https:&#x2F;&#x2F;z.cash&#x2F;" rel="nofollow">https:&#x2F;&#x2F;z.cash&#x2F;</a>
mark_l_watsonabout 9 years ago
I recommend Douglas Rushkoff&#x27;s book &quot;life inc, How Corporatism Conquered the World and How We Can Take It Back&quot;:<p>Centralized money has been the means for sucking profit out of local economies since about 1300. Rising income inequality has been an 800 year process. I thought I knew how the world worked, but Rushkoff changed my world view.
squozzerabout 9 years ago
The article itself is somewhat misleading - cash, i.e. currency, does depend on the issuing institution&#x27;s integrity and the willingness of people to accept it.<p>Was a bit surprised to see The Guardian echo certain viewpoints heretofore only heard from preppers.
Silhouetteabout 9 years ago
I think this is a symptom of a wider malaise in our societies today. Technology can be an enabler of wonderful new things, but it also affords new opportunities for power and profit to those who control it.<p>The average person is not a financial expert and so there are very lucrative opportunities for those who know the system well to make a lot of money at the expense of those who do not. Payday loan companies and high interest credit cards come to mind as extreme examples, but every time you put money in a savings account at your bank they are making a lot more on it than they are paying you in interest, and every time you use an on-line payment service or swipe your card in a store you&#x27;re giving a significant cut to the payment services involved, not the person you thought you were paying. This is before we even get into the privacy implications and so on.<p>The average person is also not a technical expert and so there are analogous opportunities to take advantage of them, but we are becoming so dependent on technology that if anything the opportunities here are even more one-sided and certainly much greater in number. Day-to-day functionality and communications increasingly rely on isolated, closed ecosystems, run by commercial operators that have every incentive to lock people in and then exploit them, yet which are typically not subject to regulation as essential public services the way that traditional phone and mail systems typically have been. The &quot;war on general purpose computing&quot; is well underway, again with even basic things like the software you can run on your own devices locked up through a combination of proprietary repositories or app stores, cloud integrations, DRM and similar technologies, and legalised anticompetitive behaviour thanks to ever-increasing distortions of IP laws.<p>Much of this comes down to the same recurring themes with new technologies: as well as providing useful new capabilities, they can also become a threat to privacy, to ownership, and ultimately to the freedom of smaller businesses or private individuals to create and use technologies and data as <i>they</i> wish rather than as the controlling mega-businesses and governments dictate.<p>This does not seem healthy to me at all. However, since most of it is predicated on the average user of these technologies not understanding the full implications and often not having any meaningful choice apart from giving up on a technology altogether anyway, there is only so much the little guy can do.<p>We <i>should</i> fear a cashless world, but we should fear more the kind of world that cashless transactions exemplify.
nibsabout 9 years ago
Proposal: remove cash, add constitutional amendment defending the right to transact.
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throwaway21816about 9 years ago
It is all about control. If you remove the independence of cash and you end up with government regulation deciding how much, what and where you spend your money. Such regulation can be used to put stress on businesses that the state deems &#x27;unsuitable&#x27;[1] as well as punish those with differing opinions than the state[2].<p>Cashless society would essentially turn the world into one giant PayPal.<p>1 - <a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Operation_Choke_Point" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Operation_Choke_Point</a><p>2 - <a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;IRS_targeting_controversy" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;IRS_targeting_controversy</a>
Olscoreabout 9 years ago
A good conversation of &quot;why we should fear a cashless world&quot; should at least mention the Book of Revelation and the Book of Daniel in The Bible. It would be negligent to omit them from discussion like this.
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