
In praise of cash - denzil_correa
https://aeon.co/essays/if-plastic-replaces-cash-much-that-is-good-will-be-lost
======
CPLX
The core concept to remember I think is that there are two ways to pay for
things:

* Ways that involve cash or cash equivalents

* Ways where a purchase requires the permission of someone else

Just think of the word authorization, which is a required element of
essentially all non-cash transactions. It has the word authority embedded
right in it. If you're OK with that concept, you are necessarily OK with the
idea that someone you have never met and don't control has the ability to stop
you from using your funds in the way you'd like to at any time.

A cashless society is, at a fundamental level, not free.

~~~
M_Grey
A cashless society would be an attempt to create a society that lacks basic
economic freedom, but it would also fail. People will simply return to barter,
and the use of whatever precious metals/stones/etc are hot that year.

~~~
vkou
Unfortunately, the US Government does not accept tax payments in turnips,
emeralds, pirate treasure, moonshine, or Eth. Until that changes, you will
need to interface with the USD economy.

The US government also expects your tax payment on an annual basis.

~~~
lucio
But, if you fully trade using any of those examples as money, you're actually
invisible to the tax collector...

~~~
vkou
My landlord doesn't accept turnips either. And he needs to pay property taxes
regardless of whether or not I'm renting.

~~~
M_Grey
Do you live in a cashless society?

~~~
vkou
The only time I touch cash is:

1\. When my girlfriend pays me her half for getting groceries.

2\. Which I then use to feed the laundry card refill machine in my apartment.

Mind you, I don't want cash to go away, but yes, I essentially live in a
cashless society.

------
PaulAJ
The thing about the cashless surveillance panopticon is that it still can't
stop illegal drugs. Every prison is exactly that kind of surveillance society,
and in every prison drugs are readily available.

HSBC is one of the principle members of this privatised money system. It was
found to be laundering money for international drug dealers, and got off with
a slap on the wrist. _Nobody_ working at the bank has been prosecuted.

~~~
RugnirViking
I don't mean to be pedantic, but that statement would definitely be improved
with a link to a source

~~~
tunap
Plenty of examples from recent past, the more credible sources linked below,
with drawbacks.

HSBA(ad-blocker blocker)
[https://www.forbes.com/forbes/welcome/?toURL=https://www.for...](https://www.forbes.com/forbes/welcome/?toURL=https://www.forbes.com/sites/afontevecchia/2012/07/16/hsbc-
helped-terrorists-iran-mexican-drug-cartels-launder-money-senate-report-
says/&refURL=&referrer=)

Wells Fargo/Wachovia [http://www.businessinsider.com/how-wachovia-laundered-
billio...](http://www.businessinsider.com/how-wachovia-laundered-billions-in-
mexican-drug-money-2011-4)

Bank Of America(Paywall)
[https://www.wsj.com/articles/SB10001424052702303292204577514...](https://www.wsj.com/articles/SB10001424052702303292204577514773605576442)

No tin foil hat necessary for this one...
[https://en.wikipedia.org/wiki/Libor_scandal](https://en.wikipedia.org/wiki/Libor_scandal)

------
saxonklaxon
Some people might like the idea of all transactions being monitored and
controlled. Ensuring that people behave ethically, that they don't avoid tax,
etc. The problem is that elitists can't help believing that they know how to
run everybody's lives. So it wouldn't stop there and what future regulators
claim to be ethical will morph into supporting a tyrannical status quo.

------
sparrish
After having my card skimmed for the 4th time (at a gas station pump, at
checkout at grocery store, etc), I decided to pay for everything with cash.
It's not worth the hours it takes to clear up things with the bank and I get a
better understanding of where my money is being spent when my wallet gets
light.

~~~
fjdlwlv
How many hours will you spend at the ATM withdrawing cash?

You get a better understanding of spending by feeling your wallet then by
looking at your bank statements? That smells like a false pseudounderstanding.

~~~
macintux
You've clearly never tried to go cash-only. You _feel_ the pain when you buy
something; pulling out a credit (or even debit) card does not have nearly the
same emotional angst.

Seeing those bills go away with the knowledge that they're not coming back is
quite enlightening.

------
3pt14159
A cashless society I will only ever come once human nature fundamentally
changes. Say Canada gets rid of physical currency, the very next day people
will use American money to buy things like drugs or stuff they don't want on
their credit card like sex toys. Make a law against using other currencies and
the market will just move underground. Even if every country eliminated paper
money there will always be a way of exchanging high priced commodities, at
which point the prevailing choice will become cash.

------
seibelj
I would never support getting rid of cash, it's a basic right to spend money
without being tracked.

~~~
matthewmacleod
_it 's a basic right to spend money without being tracked._

No it's not. I very much want there to be a way to spend money anonymously,
but I can't frame that as a 'basic right'.

~~~
c22
If you consider money to be a form of speech (I don't but it's been
successfully argued in US case law) then I'd argue it is a right as I'd argue
availability of anonymity is a prerequisite of free speech.

~~~
runeks
Whenever one makes a purchase, the price structure of the good that was
purchased changes, and in the case of goods/assets that have a yield, it also
changes its interest rate structure. This is information being propagated from
the consumer to the merchant, via the price system, using money. So while the
act of exchanging money for goods is not information in and of itself, as
speech is, this act results in the propagation of relevant information from
consumers to merchants to producers.

------
nunez
While I agree that cash is extremely convenient and largely anonymous, it is
still much more of a hassle to manage than credit or debit cards are. I lived
in NYC for a bunch of years and the one thing that I absolutely do not miss is
paying for >$100 dinners, entirely in cash, because the restaurant was "too
cheap" to handle processing and transaction fees.

~~~
phil21
> because the restaurant was "too cheap" to handle processing and transaction
> fees.

I applaud businesses like this. The fact we slowly let a few giant private
corporations enact a 1-3% fee against pratically the entire consumer economy
would be ludicrous in any other situation.

Plus the privacy concerns just are not worth the convenience. Whenever
possible I use cash, simply so I slow the day coming where I can't function in
society without having my entire spending history out there for any agency to
decide to take a look at.

~~~
maxerickson
I'm not a big fan of credit cards, but cash isn't free.

~~~
dredmorbius
Money is an information and accounting system. Regardless of how implemented,
it has processing costs.

------
frik
You can already feel the pain in CN. Almost everyone is using WeChat in tier 1
cities. WeChat is like WhatsApp/FB-Chat but with integrated Paypal-clone. It
has also an integrated Didi app (Uber/taxi hailing).

You feel the pain if you don't have a local bank account and therefor cannot
use the WeChat wallet. So you cannot hail a Taxi with Didi, you have to do it
the old way by waving the hand. It's already really a pain, if you don't look
like a local but being a visitor from the west. I heard there are restaurants
that accept no cash anymore. It's also not so great that bank debit cards now
have some regional lock, you have to deactivate it before you travel abroad,
otherwise you cannot use ATMs there. Been there, learned it the hard way, good
I had 300 USD in cash with me to survive 3 days until the debit card region
locked got processed around the globe to enable ATM cash deposit. Let's hope
current kind of paper cash stays around and will be a legal and common payment
method for a long time to come.

------
mamcx
Do people remember when companies in the past provide his own currency to
control people them own?

Because he have your money, he own you.

~~~
marcosdumay
Well, governments stepped on it, and moved the point of control a notch above.

What is unsettling is that governments could create a digital payments system
that didn't depend on any single authority. This would be convenient enough
that I can't imagine it not gaining the entire market (even from cash), and
making this move much more palatable. This would be a much easier way for govs
to get their so desired universal surveillance. Yet none is doing that. Why?

~~~
creaghpatr
Because the government needs to print cash to pay off debt, that's why the
Federal Reserve exists.

~~~
marcosdumay
I'm not talking about Bitcoin. I'm talking about the government issuing
digital money.

To make it clear, I don't think it's an entirely good thing, but it would be a
much easier path to the kind of surveillance they want to create.

~~~
morgante
Most money is already digital.

~~~
marcosdumay
Most digital money is not government issued...

------
013a
My biggest concern is the frightening fact that all of these cashless systems
are powered by private, for-profit banks. I'd be more fine with a move to
cashless if the fundamental system which powered it were operated by the Fed
(for free, as a public service), not Visa or Mastercard.

~~~
AnimalMuppet
I go the other way. If Visa decides they don't like me, Mastercard or American
Express may still do business with me. If the Fed decides they don't like me,
my only option is to leave the country.

~~~
rvense
If the people who run the Fed decide you shouldn't spend or receive money,
they'll make sure it goes that way regardless.

And I'd much rather be taxed by my government than by the shareholders of my
bank.

------
PaulAJ
How can this article fail to mention Bitcoin?

~~~
rmorey
My thoughts exactly. A blockchain is exactly the solution to a shared, secure,
accurate public ledger without the need for a trusted third party like a bank
(not that current blockchains are perfect, by any means)

"The cashless society – which more accurately should be called the bank-
payments society" Due to this sentence I'm forced to believe the author has
literally never heard of bitcoin, which seems impossible

~~~
pjmorris
Bitcoin is still an intermediary between the buyer and the seller.

------
sersi
I want to continue being able to pay by Cash as it's the only to guarantee my
privacy. But, because of the miles I get using my credit card, I end up almost
never using any cash.

I'll have to think about this, do I value the plane trips so much that I'm
willing to compromise on my values regarding privacy?

I'm also going to look into blockchain currencies like Bitcoin to see what
potential currencies would guarantee my privacy.

------
oculusthrift
I've never used cash regularly in my life. I hate carrying extra stuff around,
so just have one of those card holders attached to my phone. I feel like older
people are ingrained with cash, but it hasn't come into my life at all.
College kids these days even use Venmo to buy drugs.

Of course I know I'm subjecting myself to tracking which is somewhat scary but
I guess the convenience has outweighed that for me.

~~~
coldpie
You're also sending a 3-5% tithe to the payment processor (credit card
company, bank, electronic payment provider) with every transaction instead of
giving that money directly to the service provider.

~~~
oculusthrift
Maybe this is harsh, but why would I care? It sounds like a problem for the
store. And many of the mom and pop shops around me require a minimum purchase
or charge a 50 cent fee for using a card.

~~~
ThrowawayR2
> _Maybe this is harsh, but why would I care? It sounds like a problem for the
> store._

The store passes the cost right back to you, the consumer, in the form of
higher prices. You didn't just think they absorbed the cost out of the
goodness of their hearts, did you?

~~~
oculusthrift
Of course not. But some percentage of customers still use cash. So the store
might raise prices by 1.5 pct instead of the 3pct that Visa charges them. This
essentially means those who use cash are subsidizing the card users. If they
raise it the full 3 percent then the cash users are paying extra for a service
they don't even use!

~~~
ThrowawayR2
That doesn't negate either coldpie's or my points; if anything, having people
use cash effectively helping to subsidize the "credit card tax" only adds more
weight to the argument that it's an unreasonable arrangement that only serves
to enrich the credit card companies.

~~~
oculusthrift
yes it does. from a game theoretic perspective, it only would make sense for
me to switch to cash if everyone else did so that the store wouldn't
incorporate the extra fee into the price of their goods. However, one can't
control others, they can only control their own behavior. So in a situation
where there goods cost extra, because others are still using their cards and
the owner has to markup prices, the only rational thing to do is to use the
payment method you prefer. And economically speaking, all the cash users are
paying extra for a good they don't use.

~~~
yourthrowaway2
You forgot a rule of the "game".

You can negotiate price with cash.

------
alkonaut
Couldn't a lot of the downsides with the credit card system be at least fixed
somewhat by anonymization? E.g a card that generates new numbers for each
transaction stops the store from tracking my purchasing habits. Similarly a
store that doesn't record any more than the amount to the cc company limits
what is recorded.

I'm not saying this is in the interest of either retailers, banks or credit
card companies - but it should at least be possible in theory to improve on
the status quo e.g by regulation.

The best solution imho would simply be a credit card you can "charge" with
plastic cash from your bank account, instead of going to the ATM. The amount
stored on the card is then used like cash and then it's re-charged from the
account when it's empty.

All the cc company sees is the charging withdrawals and the retailer doesn't
see any credit card information as the transaction is made with "cash".

I have seen attempts at this (e.g in Sweden 10-15 years ago) but none
successful unfortunately.

~~~
kalleboo
In a lot of places the public transport cards (that are anonymous and can be
recharged with cash) are also accepted for payments at various retailers (see
Japan, Taiwan, Singapore, Hong Kong...) and are very popular since everyone
already has one to ride the subway, so why not buy a drink at the convenience
store with it too?

------
tomohawk
And then there's companies like Square that decide to tie their political
ideology into their terms of service.

[http://money.cnn.com/2013/05/13/technology/square-
guns/index...](http://money.cnn.com/2013/05/13/technology/square-
guns/index.html)

------
mavhc
Also most cash is used for crime, abroad.

[https://www.theatlantic.com/business/archive/2012/11/-100-bi...](https://www.theatlantic.com/business/archive/2012/11/-100-bills-
make-up-80-of-all-us-currency-but-why/265518/)

------
known
"Give me control of a nation's money supply, and I care not who makes its
laws." \--Rothschild, 1744

------
huffmsa
In a rare moment of being in favor of centralization, this article has me
wanting almost immediate government takeover of credit / banking systems, as
they control cash monies.

The only other instance is pharmaceuticals, that industry being "for profit"
is nothing but bad news.

------
mavhc
In the UK, I basically never use cash, it's annoying, having random
coins/notes in my pockets, with no pin code to stop them being used, and
having to get change.

------
RichardHeart
National security. When there's civil unrest, or war, all the permission
channels are going to go down. Cash is freedom.

------
rdiddly
This is indeed a fearsome trend we should be on guard against, but there's one
thing making me feel it'll never happen in the US: Cash is indeed preferred by
criminals, and the government is criminal. There will always be cash for the
CIA's drug trade, for example.

------
otakucode
But cash is an untraceable anonymous currency, used by drug dealers and child
pornographers!

~~~
petre
If you believe the gov't propaganda, yes. But drug dealers and child
pornographers will _always_ find alternative methods of payment because their
activity is illicit.

The real reason of the move to cashless is taxes and the fact that governments
everywhere borrow without intending to ever pay back. When the shit hits the
fan, the payment will come out of your and others' bank accounts.

------
smacktoward
_> This second mode of money is essentially private, running off an
infrastructure collectively controlled by profit-seeking commercial banks and
a host of private payment intermediaries – like Visa and Mastercard – that
work with them. The data inscriptions in your bank account are not state
money._

This raises a question in my mind which probably shows my ignorance of finance
more than anything, but here goes:

Why not just have a _public_ system of electronic transactions?

What I mean is, the current system of electronic transactions feels to me a
lot like the way things were back in Ye Olden Days with cash. Cash didn't
start out as state money, it started out as _private_ money -- notes issued by
individual banks, promising to pay the recipient in coin or specie on behalf
of the bearer. (Which is why paper money is still referred to in some places
as "bank notes.")

Which was fine for a long time, but as commerce got bigger and more widely
distributed, it reached a point where it didn't scale anymore. Every note was
only as dependable as the bank it was drawn on, and the farther away the
transaction was from that bank the harder that reliability was to evaluate --
uncertainty which added risk to transactions. So governments started removing
that uncertainty by organizing central banks and issuing their own notes,
which became the paper currency we all know today.

Fast forward to now. We have modern cash, which has all the virtues the
article cites; and we have a separate system of online payments which lacks
those virtues, run by private companies who take a non-trivial piece of every
transaction for themselves. Those drawbacks weren't too important when
electronic payments were a new thing, because it wasn't clear then that they
would ever be more than a niche product for the convenience of rich people.
But now they're everywhere, and it seems inevitable that at some point they'll
become the universal method of payment.

So why not do like we did with bank notes and cut out the middleman? Why not
have electronic payments systems operated by governments, in the same way that
they print currency? It seems like it could solve a lot the of problems with a
cashless society at a stroke, and help the economy to boot by returning the
percentage of each transaction that used to go to the banks back to productive
circulation.

(The cynical part of me says that the reason is because the middlemen in this
case are banks, and in the modern world banks tell governments what to do
rather than the other way around.)

~~~
colorint
You say bank notes were redeemable for "coin or specie," but really that's
state money. So state money precedes bank money. This was also a horrible
system, because bank notes didn't have guaranteed parity (with each other or
with state money) or guaranteed redemption.

Also, the "final" clearing system for electronic transactions is public. In
the US, it's called Fedwire, which is operated by the Federal Reserve which,
despite various paranoid ramblings, is a public institution. The problem is,
only reserve banks are allowed to have accounts with the central bank, which
makes the system appear private. It's even trickier with credit cards, where
you're basically asking a credit provider for a loan every time you swipe.

So maybe the better question is, why isn't there a national depository bank of
the United States? And then you can advance whatever answer you want for that
one.

------
j_s
_The Death of Cash_

[https://news.ycombinator.com/item?id=9947219](https://news.ycombinator.com/item?id=9947219)
(1.5 yrs ago)

------
nxc18
In my experience as a college student, it is exceedingly rare to use cash,
especially cash in amounts greater than $5, for anything other than crime.
While you can argue that one should be able to reasonably break laws and not
get caught - anything else is a surveillance state and there is value to
discretionary enforcement - I wouldn't characterize criticism of cash as just
manipulative.

For example, on my campus, the vast majority of all cash transactions, from
what I've experienced, are to buy illegal drugs or to illegally obtain
alcohol. The rest of the transactions are with dining services and with clubs.
Because dining services has to keep so much cash on hand, they are a major
target for crime; they need to hire more expensive managers to count it, they
need to have more cameras and security staff to monitor it, and they need to
hire armored guards to carry it off to the bank. In the past front line
employees have been shot in armed robberies, so yes, the many safety
mechanisms are necessary.

What incentive does anyone in this story have to keep using physical cash? It
is crazy insecure, dangerous, inconvenient, and used often for illegal things.
The criminals (who are more than you'd think; who do you know who hasn't
broken at law at least once or twice?) have an incentive to keep cash around.
That is legitimate, but as a society, a better approach would be to rewrite
our laws to better capture the realities of human behavior and serve the
community interest. When people are routinely getting away with things
(drinking, smoking, etc.) it is probably time to make them legal and grant
those people the full protections of the law and the monetary system -
including non-physical value.

~~~
angersock
Have you never paid for admittance to a club? Paid a busker? Gone shopping at
a thrift store or pawn shop? Bought something at a garage sale? Paid for
dinner and tipped without having to split the check for n different cards?

Your post reeks of inexperience.

~~~
ghaff
I've actually wondered what the impact on buskers, clerks that make some money
off a tip jar, etc. is of the shift toward plastic. I guess, in the US, a
dollar bill is still a relatively small amount. But I know that I basically
_never_ have change on me these days unless it's quarters to put in a parking
meter.

~~~
c22
I imagine tip jar employees are doing all right. I used to drop a dollar and
whatever coins I got back as change in there, now I push the 20% button on
their iPad, which is almost always more.

~~~
angersock
It varies, right? If it hits the iPad or whatever, then the tip goes through
management, has to be taxed, may be tipped out to other people, whatever.

Some of that is simplified by just having a jar of cash with limited options
for opaque gaming.

