[lbo-talk] Contradictions of a cashless society

[Daniel Davies]

the cashless society has already been implemented in some large-scale
social experiments - basically the prison system, where lots of prisons use
commissary cards and phone cards, to control what the prisoners are able to
spend money on.  What seems to happen is that people quickly create a
numeraire consumption good (tinned mackerel, apparently) and/or start
dealing in IOUs for settlement elsewhere.

On Mon, Nov 9, 2015 at 4:12 AM, Marv Gandall <marvgand2 at gmail.com> wrote:


> There is much talk lately by bankers and mainstream economists about
> implementing negative interest rates, where depositors pay rather than
> receive interest in their accounts. The ostensible purpose is to discourage
> saving and encourage consumer spending to revive the stagnant global
> economy.
>
> The conundrum facing policymakers, however, is that any such move below
> the “zero bound” would provoke mass withdrawals and the hoarding of cash
> under mattresses.
>
> So the chief economist of the Bank of England and other advocates of
> negative interest rates are proposing that coins and bills and be
> eliminated and universally replaced by digital transactions over
> smartphones and other electronic devices. Digital transactions are already
> commonplace in Scandinavia and Africa.
>
> Critics like the pseudonymous blogger Don Quijones linked to below charge
> that the unintended consequences of the accelerating move to a cashless
> society make it possible for every transaction to be recorded, scrutinized,
> and profitably exploited by banks, and for negative interest rates to be
> imposed on depositors deprived of recourse to withdrawing cash.
>
> Quijones calls this potential misuse of the new technology a “tragedy” and
> blames the “general public” for inadvertently becoming the “the
> governments' and banks’ strongest ally in their War on Cash…As long as
> people continue to abandon the use of cash, for the sake of a few minor
> gains in convenience, the war on cash is already won.”
>
> However, the problem, as always, is not the development of the new
> technology which arguably offers more than a few minor gains but whether it
> is democratically controlled and regulated in the public interest. The
> imposition of negative interest rates and the surveillance state are not
> foregone conclusions.
>
>
> http://wolfstreet.com/2015/11/07/first-they-came-for-the-pennies-in-the-war-on-cash/
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