I have just been reading a rather well written article by Tyler Lonergan about the virtues of a cashless society. He is quite in favour of it and points out many of the genuine benefits that would derive from such a society. You can read his article HERE, and perhaps join this important debate yourself.
In this article I will argue that a cashless society would be a very dangerous development. I will do so be referring to two issues. The first is that it would lead to officially legalised theft. The second is that it would lead to tyranny. I will then make some conclusions on the basis of these issues. But to start off, I will set the scene by doing something unexpected and discussing the virtues of optimism and pessimism. This is an important part of the discussion as you will come to see.
Setting the Scene: The Continuum of Optimism and Pessimism
Tyler is obviously an optimist, he says so in the header of his blog. While optimism can help you achieve things, it is a state that others can use to manipulate you. It can cause you to sign up for things that are not in your best interests. It can also cause a person to engage in wishful thinking and to ignore obvious dangers.
Optimism is not bad, just like pessimism is not bad. Both exist on a continuum, like yin and yang. Problems can emerge at the extremes of any continuum because that can, though not always, lead to imbalance with the other important variable – the surrounding environment.
Sometimes the surrounding environment might necessitate extremes of optimism, but normally it would necessitate some sort of combination of optimism and pessimism. As the environment is in constant flux, the amount of optimism or pessimism also has to be in constant flux to adjust to the changes in the environment.
A cashless society is certainly a good thing for an extreme optimist that has complete faith in the goodness of humanity. But humans are not just good! They can be nasty, manipulative, greedy, suspicious and self serving. That is the reality of the environment in which a cashless society would exist.
Legalised Official Theft
While a cashless society would create wonderful convenience, efficiency and ease it would also create very serious problems. It would be the equivalent of the Pacific Islanders of an earlier age being bought off with shiny beads, cuckoo clocks, and liquor when visited by European explorers. It seemed like a good idea at the time but led to their subjugation.
Much has been written about moving towards a cashless society since the start of the current recession. The financial crisis was caused by banks practicing casino capitalism. They were of course bailed out by the public, but that was not enough for the long term!
Already central banks can manipulate economies so that their interests, and not the public good, predominate. They can create new money by quantitive easing and thus reduce the value of the money that already exists. People’s savings lose their value as their money value is transferred to the central banks. This is already a form of theft but a cashless society would make this more blatant and extensive.
The reason the powerful, the governments and the bankers who corrupt them, want a cashless society is that they could move us to a system of negative interest rates. Instead of banks paying to use your money via interest, you would pay the banks for the privilege of having your money under their control.
In a cashless society all your money would be in the bank by compulsion. If the gambling bankers had made some losses, they could recoup those losses by increasing the negative interest rate. In other words they would steal from you to pay for their bad decisions and incompetence. In turn this would lead to more bad decisions and ultimately to systemic collapse.
A New Tyrannical Age
With a cashless society big government would get bigger and be even more intrusive. Every transaction would be recorded and judgements would be made about what you bought. You might be approached for having too much fat in your diet or for reading books that the government did not want you to read. You might have driven your car more than they would like in a particular week. Like a disciplinarian parent, the government could cut you off in a second.
This situation would allow the rise of tyranny to a level unprecedented in the whole of human history. Prison would no longer be necessary, the government could simply cut off your food supply or restrict your freedom of movement to walking only. Health care could be restricted if you were deemed to be eating the wrong foods. Ultimately your diet could be restricted to government issued gruel that you would have to consume in front of your iPad video camera. If you were cut off by the government you would have only two options – become enslaved and have your needs met by your owner, or resort to crime.
No government should have this level of power. A cashless society would given them that power. They are incapable of using their existing power wisely so why should they by given such absolute power?
The Rise of a New Barter Economy and a Moral Black Market
Of course, people would not stand for the theft and tyranny outlined above. As thinking beings they would make their own adjustments. They would create alternative systems just like they did during the era of Prohibition when they turned to gangsters. What’s more, they would be right to do so.
To survive or to maintain their privacy and dignity people would move back to a barter economy. Just like with the continuum of optimism and pessimism, adjustments would be made in the context of the continuum of the cashless and barter economy.The black market would flourish and gangsters would gain new status and legitimacy.
The new black market would be a moral black market, a justified black market, a necessary black market. It would be an antidote to theft and an antidote to oppression. The only way this alternative economy could be stopped would be via the application of force and coercion on a hideous scale.
Is that the sort of society that would be worth living in? I say no!