The Cashless Society Fairy Tale: Faith in the State
The following article was written by an anonymous libertarian who does not have the courage of his convictions. He will not say who he is. He uses a pen name.
From the safety of anonymity, he spouts utter nonsense. He announces his forecasts with absolute confidence. And why not? No one can hold him accountable when not a word of what he says must happen does not come true. He will no doubt double down.
He says the world is moving into a cashless society in which we will lose all liberty.
My position is simple. We customers voluntarily moved to a 98% cashless society a generation ago, and our liberty has increased.
I get tired of self-proclaimed libertarians who tell us that the government is behind economic conditions that are obviously the result of universal voluntary transactions. Consumers have exercised their authority, yet these critics say the federal government is behind it.
All over the West, as well as in Japan, New Zealand, and Australia, currency has disappeared. This is not the work of some international government. There is none. It is the result of the voluntary decisions of the vast majority of citizens in the West. Credit cards are cheap for bankers and also for customers. There is a fundamental economic law: When the price of anything falls, more is demanded. This is why we live in a 98% cashless society.
There are money-back guarantees in our society. Consumers demand this. Digital money lets customers prove that they paid for some item.
Currency is for used goods that are bought in markets where we can negotiate, and where sales are based on this principle: "as-is." Currency is for thrift shops, swap meets, and Craigslist.
With this in mind, read the following.
Major Bankers are calling for an abolition of money. It may the only fix left, now that quantitative easing is failing. But no one is going to put their money in banks! Not if it means negative interest rates.
Really? Interest rates are close to zero, and you have money in your bank. Will you withdraw all of your money if rates go to minus one-tenth of a percent? You want FDIC insurance. You will pay for it. So will I.
What we do as individuals is mostly irrelevant to the banks. What hedge funds do with billions of dollars is highly relevant. They have no choice but to put this money in a bank. Banks will not let them withdraw currency.
The anonymous commentator is not only an economic ignoramus, he does not begin with acting individuals. Austrian economics starts with individuals, not collectives, i.e., what "everyone" will do, when in fact almost no one has done it in forty years: use currency only.
Don't worry. Governments will rise to the occasion and soon will be making cash illegal. People will be forced to put their money in banks or the market, thus rescuing the central governments and the central banks that are incestuously intertwined with them.
He is an economic idiot. I mean this. People put their money in the bank now. If they put it "in the market," it never leaves the banking system. Ownership of digits changes, but the digits never leave the banking system. No one is forced to do this. We choose to do this.
Beyond that, cash is probably the last arena of personal autonomy left. It can be spent anyway one pleases, with no one watching. It can be hidden from the government to avoid taxes. It can be used to engage in transactions of a semi-legal nature. It has power that the government cannot control; and that is why it has to go.
Almost no one in the middle class or above uses currency for more than spare change. Clearly, people do not want autonomy except at zero price. We prove it every day. But this guy thinks we need autonomy.
If we accept his theory of a looming zero-currency society, we must conclude that the federal government has removed 98% of our autonomy, and it has only 2% to go. On the contrary, we have removed it. Our actions reveal this. We do not think autonomy is worth paying for. Who is to say we are wrong? Not this guy. He is an anonymous writer who does not understand banking.
Businesses don't want currency. That's why there are Brinks trucks and Loomis trucks.
Of course, governments will not tell us the real reasons. Might provoke a reaction. We will be told it is for our own "good," however one defines that. It will be sold to us as a benefit. Millions of smartphone users are being seduced to take advantage of the convenience of Apple Pay; and indeed it is convenient, until you lose your smartphone.
Governments will not say anything about this. Governments don't care. They can trace the hedge fund money, the retirement fund money, and all the other pools of digital money that constitute the money we investors use.
Governments do not care what illegal aliens who work for currency do with their currency. They send some of it back to Latin America, where it circulates as a black market currency. So what? Who cares? This reduces price inflation. Money outside of banks is not multiplied by fractional reserve banking.
When that day comes -- and we may be only one more "market correction" away -- the call will go out to have all disposable cash surrendered in exchange for bank accounts or money funds. A time period will be set up. Possibly two months, extended one or two times to make the bureaucrats appear merciful. Fluff stories will appear in the press to ease the process.
Call? What call? "Here, currency. Here, currency. Come to Uncle Sam." What kind of fantasy world does this guy live in? No such call will go out. There is no need for a call. Westerners have almost no currency to call.
There will be stories about a seventy-year-old granny who marches in with a mattress containing $100,000 of her life earnings. She will smile, and tell the announcer, "I was always afraid of a fire; but now I feel safer." It will look so cute on the Five O'clock Action Report News.
No, there won't be such stories. Granny has no currency. She gets her Social Security money deposited electronically into her account every month.
Kids will turn in their piggy banks at school -- does anybody still use piggy banks anymore? -- for prepaid money cards. They won't be told the cards depreciate one or two percent a month, if they do not spend it immediately. Remember, that in all of these transactions, the central government/bank wins.
This argument gives the game away. Kids don't use piggy banks. Neither do adults use glass jars.
Side stories will inform us that mugging is down. Crime is finally being defeated. What won't be reported will be that hacking will shoot up. Bank fraud will skyrocket.
This scaremongering ignoramus is using rhetorical nonsense to scare readers. This kind of mindless, unethical twaddle angers me.
Poor people, often liberal voters, will be sold on increased personal safety. A cashless society means less crime in their neighborhoods. No cash puts muggers at a disadvantage. More importantly, they will be told that the rich can no longer hide their money and will be "forced to pay their fair share."
Why does he think the federal government cares what blacks do with their money? It doesn't.
Conservatives will be told that no cash puts a damper on drug transactions, and social crimes, such as prostitution. Illegal aliens will not be able to get work. The media will be replete with tales of such wonder working miracles during the transition.
The government does not care. The people with money worth taxing get taxed directly: automatic quarterly withdrawal by their employers. Businesses do this with digital money. If some employee wants to convert digital money to currency at an ATM, the IRS does not care. It got its cut before the worker was paid.
Be assured, however, that criminals, ever innovative, will find a way around problem. Escort Agencies now take credit cards. Muggers will soon concentrate on jewelry and smartphones, especially those with Apple Pay accounts.
Except in inner city areas, people do not get mugged. I have never been mugged. I have never talked with anyone who has. Muggers do not work in middle class neighborhoods.
Going cashless may ironically streamline drug smuggling since suitcases of money weigh too much.In spite of that, we will be told that criminal enterprises will have been hurt badly. Their mountains of cash are irredeemable. Don't you believe it.
We all know it's a currency market. We know it functions well. We also know this: Governments are incapable of shutting down these drug markets. But our anonymous author thinks governments can do this at the drop of a hat.
Rather, there will be a spike in the price of Bitcoins during the conversion. Bitcoin's anonymity has already spawned major illicit franchises on the darknet. These will grow.
Bitcoins are a tiny $10 billion market. They are tied to digital banking. They offer no privacy. You must spend recorded digital money to buy them, and you must receive recorded digital money to redeem them. You can't buy anything with them directly.
Expect Craigslist to offer a plethora of conversion opportunities for college kids to make some spare ... well, credit by converting some cash. The more efficient drug dealers will suffer some loss as they have to farm out their stash to small operators for conversion; but the surviving dealers will end up leaner, meaner, and in fighting shape when the dust settles. Only the low-end relatively "honest" street pusher will suffer; but that street pusher was slated for an appointment with Five O'Clock News as a casualty of the drug wars, anyway. Drugs will now arrive, elegantly delivered via shipping agencies.
Does he think Craigslist will replace Walmart, Target, and the local supermarket? If so, we can safely ignore him.
The real purpose of a cashless society will be total control: Absolute Total Control.The real victims will be the public who will be forced to put all their wealth in a centralized system backed up by the good faith and credit of their respective governments. Their life savings will be eaten away yearly with negative rates. John Q. Public will be forced to subsidize bankrupt banks, or invest in an overpriced manipulated market.
We live in a 98% digital market. The goal is not total control. The goal is to please customers. We customers are pleased. We do not use currency.
People would be foolish to think they can waltz through the problem if they have gold. There is not enough gold on the planet to set up a serious competitive black market. Those who have gold will be forced to pay a severe markup premium for going off-grid. Eventually, even these will run out of gold; and bartering will soon prove tiresome.
This ignoramus is pro-bitcoins and anti-gold.
The end result will be the loss of all autonomy. This will be the darkest of all tyrannies. From cradle to grave one will not only be tracked in location, but on purchases. Liberty will be non-existent.
This man is a fool. Digital money has given us enormous liberty. Voluntarism has given us digital money. He is saying that the government's attempt to extinguish currency will reverse this 100% and give us total tyranny.
However, it will be sold to us as expedient simplicity itself, freeing us from crime: Fascism with a friendly face.Perhaps the scariest consequence of all is that an individual can be "terminated" by a bureaucrat erasing his identity. Do not kid yourself, it will happen. Real "Mark of the Beast" stuff.
Rev 13:16-17 And he causeth all, both small and great, rich and poor, free and bond, to receive a mark in their right hand, or in their foreheads: And that no man might buy or sell, save he that had the mark ... Rev 13:16-17
So, he ends up citing a passage in Revelation that was fulfilled at the fall of Jerusalem in A.D. 70. On this point, David Chilton's 1987 book, The Great Tribulation is clear.
As far as I can see, the cashless society crowd holds to some variation of this article. The others are not blatant ignoramuses, as this man is, but they are close.
Ignore them.