Cash and freedom

I think you are failing to see the positives Chris Bertram, a cashless society would encourage responsible consumption, and would provide accountability, and could also help with logistics and less waste if the cashless system was integrated more into ordering products and so on. It would be different from what we have now, but that is no reason to just see negatives about possible total government control.

Already here if you are a pornographer. The US government exerted pressure on banks to cancel bank accounts of people involved with the smut industry in Operation Choke Point. There weren’t any hearings, no need for pesky judges, and the banks rolled over because they open only by the whim of regulators. Thankfully Congress intervened.

” It would be different from what we have now, but that is no reason to just see negatives about possible total government control.”

The sarcasm here just writes itself.

ZM@2

‘I think you are failing to see the positives Chris Bertram, a cashless society would encourage responsible consumption, and would provide accountability, and could also help with logistics and less waste if the cashless system was integrated more into ordering products and so on. It would be different from what we have now, but that is no reason to just see negatives about possible total government control.’

I think it’s worth focusing on Chris’s negatives rather than your positives, since the negatives he’s identified are both plausible and results of this one policy, whereas the positives you’ve identified are less salient and could in any case be brought about by other policies.

JTAS @1: Can you explain that for me. Surely if governments could block bitcoin they’d be doing it already. My feeling is that elimination of cash would make crypto-currency enthusiasts’ claims about how they were fighting for freedom against the tyranny of government look a lot less ludicrous.

Other random thoughts:

1) The UK hasn’t shown much inclination to get serious about money-laundering so far. How much does this sort of control depend on it’s doing so? Seems to me that if you don’t get serious about that, all you’re doing is massively expanding the illicit economy, and granting serious power to whoever can move money between the two spheres.

2) Is the real story here going to be about social control by private individuals? If access to the legal economy depends on someone conducting a check of your papers, that someone has an awful lot of discretion over whether and how to make your life difficult.

Have there been any studies of the effect of cashless payments on beggars so far? I’m sure I give them money less than I used to because I’m often without cash

good for basics, hard to use for drugs or booze

A cashless society “encouraging responsible consumption”, then.

I personally hope that any beggar who I hand money to is going to use it on drugs or booze. I can’t very well hand over the actual articles though.

The whole topic of cashlessness has been widely addressed (although not necessarily well addressed) in science fiction. For example, Zelazny had a series of short stories about a computer programmer who helped to set up the worldwide money-tracking system, saw the dangers of it, and (in characteristic Zelazny style) instead of warning anyone or taking any political action used his access to set up a backdoor so he personally couldn’t be tracked and could become a super-private-detective.

Ian Banks wrote a good deal about a society without money, which is a completely different proposition.

Walden: And when I give money to folks on the street I’m certainly not going to give them a credit card or transfer

They don’t want you to do that, you know.

“In practice this means that people whose right to remain is cancelled could almost immediately lose access to the resources they need to fight the administrative decision against them.”

That’s worrisome, alright. I couldn’t hire lawyers, for instance.

Now suppose I have some cash. How exactly does that help me?

Do I have a big stack of 500-euro notes, so that I can give one to my lawyers every time an hour passes? Do I walk around with the 10,000-100,000 euros it will take me to hire representation? And do I want to deal with the lawyers who regularly get paid in stacks of cash? Do I want to deal with lawyers who do not have sharp questions about how I brought more than US$10,000 with me into the country to begin with?

Maybe I keep it in a bank. Govts are good at seizing assets, esp. ones that look questionable. Banks are required to keep close tabs on deposits and withdrawals.

And why would my paying them in cash persuade the govt to let me take advantage of their representation? If the govt wants to dissuade lawyers from representing me, it will find ways to do it–especially if I am doling out wads of cash every time that we meet. A few well-placed enquiries from Inland Revenue will make those solicitors pull in their horns very fast indeed.

I don’t disagree with your concerns, Chris, I just think that cash per se is a side issue. The real issue is about a seamless web of govt control of banks and law-firms and cash transfers and so on. I don’t think letting me keep a few quid of colored paper in my pockets is going to make any difference to the big picture here.

Thanks, Matt. That’s information I did not have.

So do you think your work in representing poor immigrants was made *easier* by their having access to cash? Would anything have been different if they had only had e.g. debit cards?

Put differently: is there a scenario in which the INS goes after their debit cards, in which the INS would *not* equally go after their cash-on-hand?

EDIT: Sorry, not “trade those in for cash”. It should be “trade those in for usable digital currency”.

@oldster yes, it was intended as an example of the way control of banking already served as an exclusionary and controlling technology in one area, immigration. It would then be a trivial matter to extend it to other areas. That already covers most of us. Ending the option of using cash just closes the space in which a few marginal people subsist and makes everyone legible to the state across the full range of their behaviour.

Oldster – my pleasure. I worked at this place long enough ago that taking payment via a pre-paid debit card would have been a bit unusual (in 2004, if I’m remembering correctly) though it’s possible that they are now taken. I’m pretty sure we didn’t take them at the time. I suppose that, if people were paid with prepaid debit cards somehow, or got a hold of them, they could be used. (There are, of course, other reasons to not like those ideas – the fees really add up for poor people.) But, cash people have on them can’t be made difficult to use in the same way that, say, a bank account could, and paying people in cash is easy if they are working in the grey market, so that made it attractive and easy for many of our clients.

“In the US, $20 is the largest common bill . . .”

Really. Why you dissin’ our old friend, Benjamin Franklin? He does get around, you know.

I am very interested in taxation and technology, and blog about it when I get the chance.

I think Chris is absolutely right to point out that it makes it more difficult to live ‘outside the system.’ In some ways that is good – making life harder for criminal gangs, tax evaders, etc. etc. but we might worry that it would impact on vulnerable people who are on the edge of society.

My take is that technology is coming anyway and we have to try to make the most of it and make sure it works for the less well off and not just those at the top. I think for example we can have a much more progressive tax system, for example.

And those on the edge of the system could try to get by without cash – gifts in kind etc. It might be harder but it would be possible.

Another thought is that the end of cash might lead to a lot of liberalisation/legalisation – prostitution, soft drugs etc.

They don’t want you to do that, you know.

They criminalised
not buying things for moral reasons – giving your money to people who need it will probably be next

Alternative currencies will emerge; this is an old, old story.

Bitcoin is looking better and better.

In the US, $20 is the largest common bill, harder to hide large sums of money in $20s vs. 500 Euro notes. While the US cash economy covers a lot of undocumented workers who are evading taxes, it is small potatoes compared to Europeans hiding assets from taxes in swiss safe deposit boxes…

According to today’s Financial Times, there is a serious move to eliminate the 500 Euro note, on the grounds that it’s mostly used for tax evasion and to finance terrorism (and for Germans to buy expensive things, it seems.) It doesn’t seem certain yet, but apparently the talks are serious.

That is a horrible idea …. what is this rush to Big Brother all about??
Privacy and freedom go hand in hand.

Not true, the majority (I think) of Oyster cards are not registered, and you can also use unregistered bank cards. In both cases Transport for London have no idea who you are.

Cash Oyster topups are still big and you can do them at lots of small shops “Oyster Ticket Stops”

<a href="https://crookedtimber.org/2016/02/16/cash-and-freedom/#comment-659098"@Engels, you’re welcome – it wasn’t directed at you, it’s directed at everybody. When reading CT, I’ve often found it a bit of work to figure out to what comment people were replying, as the comment number was correct when they typed the reply but became incorrect later. “The comment numbers don’t change” is the obvious assumption, but, alas, it’s an incorrect one.

Guy Harris @ 12:32 AM: that’s why I quote the time (and in a long thread the date) rather than the post number, which as you note can change if there are posts in moderation or one gets deleted for terminal obnoxiousness.

Keeping your money in cash is the only way to have control of your money. As soon as you put it in the bank, it can be taken away from you because you owe somebody for car payments, student loans or whatever. If your intention was to pay your rent and buy some food for your children as your top priorities, you’d better keep your money in cash.

The most-needed reform is to limit the fees charged by check-cashing companies, because they really gouge people who can’t afford to use banks. Unfortunately they have a very powerful lobby.

It’s been suggested that bringing back postal banking might help this problem. Possibly it would for some subset of people who are too poor to have bank accounts.

45, 47 good point

It is just another method for the powerful to more efficiently plunder the rest of the system. Since this also involves the slow destruction of the productive economy, prepare.

On my hobby horse now, but just last night I was giving out about a world (in the UK anyway) where the salaried tax-payers are not just caught in the tax web (rightly so, of course) while plutocrats dodge all manner of tax and consider the social contract entirely optional, but Know Your Customer rules mean we are trapped in an endless cycle of proving who we are and where our money is coming from just to be able to buy our homes etc. etc. while shell corporations pay cash for empty apartments and London is just a safe haven for the world’s dirty money. A cashless – or in all likelihood low-cash – society will change this not a jot, and a progressive tax system is only possible, a la Doug Bamford above, re. those already in the net, and not for taxing what is effectively free-floating international capital.

Technology is not ‘coming anyway’; its implementations are the result of choices we are making or, more typically, ignoring, and putting our fingers in our ears and singing cheerful songs about.

Chris W @34, actually, you can still pay cash for an anonymous travel card in London. Just.

On London transport: you don’t have to register your debit card, although obviously police (and data miners?) could easily trace it to you, but if you don’t there’s no longer anyway of knowing how much you are being charged for any given journey.

Outlawing cash will intensify the contradictions, will it not? In the US, and probably elsewhere, we already have a considerable underground economy; if it is denied currency, it will create new ones, even more out of control than the old one.

I believe it is already theoretically illegal in most of the US to directly give money, food, clothing, or shelter to people without official permission. Thus Food Not Bombs is said to be a ‘terrorist organization’, although it neither terrorizes nor is an organization.

Anarcissie @59
Yes.

In the US, $20 is the largest common bill

the largest bill in common use, but the largest bill in issue by value is the US$100, two thirds of which are held outside the USA.

Margaret Atwood, in The Handmaid’s Tale

All those women having jobs: hard to imagine, now, but thousands of them had jobs, millions. It was considered the normal thing. Now it’s like remembering the paper money, when they still had that. . . .

I must have used that kind of money myself, a little, before everything went on the Compubank.

I guess that’s how they were able to do it, in the way they did, all at once, without anyone knowing beforehand. If there had been portable money, it would have been more difficult.

If HSBC is any example to go by, going cashless won’t slow the drug cartels down a bit.

A large proportion of US Dollar bills are held outside the US. One reason, as explained to me by an East African Asian colleague, is that periodically governments change their bank notes, and typically you would have to bring in your old notes to the bank and exchange them for new notes. At that point the government knows how much money you have, and then they come after you. So lots of people throughout the world keep their wealth in US Dollar bills.

“I don’t understand the logic behind this to be honest. Governments have police forces and armies – they already have almost unlimited power in physical terms. What restrictions they have on them is a question of laws and institutions.”

Anyone who says this has clearly never much to do with either police or armies. Like tax offices, these institutions rely on the fact that 90% of compliance is voluntary. The resources to enforce compliance more than very, very selectively are simply not there. Which is why when a crime becomes a normal habit, police give up on enforcement.

What a move to end cash promises is a major shift in the cost of enforcement. Anyone can be cut off from most necessities with a few clicks.

oops
words missing
The discussion about getting rid of currency become POLITICAL POISON fast when people realise that.

Anyone who says this has clearly never much to do with either police or armies

+1

Beggars should have access to income from government welfare payments

To quote Bob Dylan: ‘is that some kind of joke?’

You said ‘if you think beggars won’t get any money then, 1. Beggars should have access to income from government welfare payments’. I agree that they ‘should’, what I can’t take seriously is the idea that that ‘should’ translates into anything other than wishful thinking.

I live in London and I pass several beggars every morning and evening. They don’t get any money from the government and government policy (and the kind of policies favoured by most Labour MPs) is focussed on making it harder for them to get any government money.

I personally hope that any beggar who I hand money to is going to use it on drugs or booze.

Don’t forget cigarettes! The best of the lot. But seriously, I completely agree with this sentiment, and I think it needs to be voiced more often and about as bluntly.

Peter T.
“What a move to end cash promises is a major shift in the cost of enforcement. Anyone can be cut off from most necessities with a few clicks.”

Still don’t understand the point – people can be thrown in jail. People even without money have friends who will not let them starve. The point is that the restriction on government power is not a question of what they can do, but what they think they can get away with and what opposition forces there are.

Look one thing that shocks me in Europe, is that in many European countries you can change the constitution via a simple act of parliament. I thought what happened in parliament was the ironic thing I have ever heard of – the parliament via a simple majority changed the constitution to insist that the highest court needed a supermajority to stop a law. Of course this should all be exactly the other way around. Constitutions should require supermajorities (after all they are laws to be followed by political opponents).

This may seem like a distraction from the original post, but I think the original post is missing the point – the problem is not details of particular regulations, but represents instead lack of general inalienable rights. You are looking in the wrong place.

Oops …. me @85
what happened in parliament should read … what happened in POLAND .. sorry for any confusion.

engels
????? Is this relevant to the discussion? I was just pointing out that if a government freezes an account, it is just as subject to judicial and press review as if they put someone under house arrest. It is not a different level of power, it is just a different detail about a single lever of power. This potential (and unlikely) law change is not the real problem, it is just a small symptom of a bigger problem. Pretending that this by itself is a major problem is a sort of blindness. I think you are UK based, but I see this more often in the US because their political system is so dysfunctional. They concentrate on single small items (instead of whole systems), because reforming whole systems seems impossible to them. But whole systems is the way you need to think.

I just read the original article and it also shows or reflects another sort of blindness. The only reason we would need negative interest rates is because inflation is so low. It is easy to create inflation – print and spend money (or even take it off rich people with loads of it, and give it to poorer people who will spend it). Why doesn’t he point out that unwillingness to do this is the real problem?