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How Feasible is a Cash-Less Society?
"Think about this: if the cumulative value of everything in the world were expressed in measures of gold, which theoretically backs the majority of world currencies, does enough gold physically exist to back the paper money value, or has the paper money itself become valuable?
And what about this: how is it that the people who depend upon cash are usually in the middle of the financial spectrum, neither the poorest nor the richest? In most extreme poverty situations, transactions are based on barter. For most middle class people and above, transactions involve checks, credit, and electronic fund transfers. For the working poor, most transactions are done in cash. How does all of this add up to the trend toward a cash-less society, where money is nothing more than numbers in a computer transferred from one account to another, to another? How far off is that future?"
"Reality" in financial terms is a 1:1 trade of value. X number of pigs for Y pounds of grain, for example. Barter.
Barter became unwieldy, so there came to be used "valuable" pieces of metal that represented the value of physical objects.
Then valuable metal became scarce, so we came to use pieces of paper that represented metal stored in a fort somewhere.
After a while, the paper was valuable just for the idea, and there was no longer a need to back it with gold.
Then, because the pieces of paper were unwieldy, we came to create bank accounts where we could write one piece of paper (a check) to represent several of the formerly gold-backed pieces of paper.
Then people got tired of carrying around pieces of paper, so they replaced it with single pieces of plastic that could be used multiple times.
But pieces of plastic had to be used in person, so when people wanted to buy something from Amazon.com, all they needed to use was the number.
Our entire financial lives can be reduced to a meaningless string of numbers. That's a far cry from bringing your pigs or cheese or grains or whatever to the market.
Got Rhinos?
Do you seriously believe that only "working class" people go to strip clubs, smoke pot, play pool and drink at bars??? I've seen plenty of luxury cars parked outside of strip clubs and bars.
Bill Clinton: Pimp we can believe in. - The Shirt!!!
Not true at all. If your credit card is stolen, you are liable for, at most, $50 (or some similar amount depending on your currency).
I believe that is incorrect; the United States issues Federal Reserve Notes (bills, and I believe coins also) which are backed mostly by gold or gold certificates. The US government Treasury holds quite a bit of gold.
The US Treasury Dept has a FAQ that explains this. See "What are Federal Reserve notes and how are they different from United States notes?", which specifically states:
The real question isn't whether it's feasible or not. The fact is that it may becoming inevitable. It won't be long before a $500 office printer can produce counterfeit currency that will fool anyone who doesn't have special equipment and at appear page cost that allows U$5 to be printed en mass.
The whole point of cash is that anyone can take a bill and know it's worth X amount. If high quality counterfeits become so prevalent that every other bill taken to the bank is a fake then it will mean a near collapse of the economy.
I.e. Rumors are still going around that using the government mint in one country to produce counterfeits that could then be dumped on an opposing state was considered as a possible military strategy in WW2. Too bad they all preferred TNT, C4 and Hydrogen bombs.
So as the cost and logistics of producing those counterfeits which fool the naked eye goes down the prevalence of cash alternatives will grow. Eventually businesses will start refusing to accept cash. I.e. In Jamaica most shops accept US, UK and Canadian money. However many will not take a US $500 bill because they don't know what a good one looks like.
--= Isn't it surprising how badly I spell ?
There have been several attempts to destabilize the economy of a country by flooding it with counterfeit notes - Laos in the 1960s comes to mind. Germany was planning to ruin the U.K. pound the same way in WW2 but never got around to it.
I live in a mainly cashless society now. In Canada we have a nationwide debit card system that all the banks and 99% of businesses participate in. We still have the option to pay cash for things, but with fewer businesses taking anything larger than a $20 bill (counterfeiting problems), this is an increasingly awkward option.
Yes, the banks take a cut. They always do. They view it as charging for a service, and, for now, I accept that. If I didn't have the option of using cash I'd have to reconsider.
...laura
Maybe it'll be sold as a "relaxation service" to hide the trail.
That's just the problem. It's not hiding the trail. It's not hiding who you bought it from, just what you bought. When the DEA or local law enforcement finally busts the "Relaxation Service" all they need to do is subpoena their Visa records and you can be identified.
I can see the fnords!
Yeah, but it later states that
AFAIK, the gold backing thing was mandated by the gold exchange standard of 1920's, which has been replaced in 1971 by the Smithsonian Agreement which established fixed exchange currencies and was itself replaced in 1973 with the so-called "fluctuating fiat currencies", i.e. exchange rates are set by the market according to supply/demand laws. So now currencies, including the US dollar, aren't really backed by anything except the strength of the economy of the country where they are issued. See this link for a documented study of the whole thing.
In Belgium/Europe we have something for 6 years now called a proton card : it has a chip which you can load with money from your bank account at ATMs (and over phones or internet if you have a special phone/device. And yes this is secure, it even won some prizes). Once the the money is on the card it is considered the same way as cash. When you buy things with it, there is no connection with a bank computer or anything, and you dont need a pin, you just push 'ok' when the right ammount appears on a display. Paying takes about two seconds. And your name or bank account is not transferred to the person you pay. If you lose the card, you lose the money on it. It has a loading limit of 200$. ;)).
It is now accepted almost everywhere (bakery, newsstands, candy and softdrink machines,barbers shops, even pooltables,...). For small ammounts, it really complements VISA and debit cards. In fact, I haven't used cash for over a month now (I dont do marihuana though
Forget about cash in the future. In Belgium at any rate.
You can find more info on http://www.banksys.be
I live in Iceland (no, we don't live in igloos :) ) and here cash "is almost extinct".
:) :)
:) This might perhaps lead to fewer crimes because of more requirements....
:)
:)
:)
I, for example, never ever use cash, except when paying in parking meters and people here are already starting thinking of paying the parking meters through cell phones ( >80% of all Icelanders have cell phones).
Credit cards and Debit cards are accepted everywhere, even on some camping places "in the middle of f*** nowhere" and everybody uses the cards like crazy, most Icelanders rarely use money.
We have already almost eliminated checks and replaced them with debit cards (that took only about 2-3 years). And the cash is next.
There are already some experiments taking place here in Iceland
involving SmartCards as "coins cards"
- the service will be publicly available within 2 years.
(In some news from VISA in Iceland, all credit/debit cards in Iceland
(and perhaps in the rest of the world) will be SmartCards before 2005)
I personally like the idea of cashless society,
You are "never ever short of cash even if you are"
- I can't buy something for $25 if I only have a $20 bill
but that isn't a problem with debit/credit cards,
in worst case scenario, you always have the overdraw @ the bank
The cards take much less space than money, especially coins
and when the smart cards will be common, you will only have carry one card that acts as your
drivers licence, identifcation card, credit/debit/coin card, your discount member card, etc.
It is also easier for you to do your home-accounting, etc.
Although some tend to spend more....
Crimes in the CashLess society will of course change and criminals will require more knowledge and different kind of skills. But hey they need to involve like the rest of us, everything is knowledge-driven now days
Call us stupid or ignorant, but most Icelanders don't have any privacy issues against card usages
- we are such a small nation (the population is only about 280000)
that "almost everybody knows everything about everybody" already
No seriously, privacy issues aren't our biggest fears/concerns.
So far our privacy hasn't been exploited although almost everything we do is linked to us through our National ID (a bit similair to the US Social Security Id)
- e.g. you can't rent a movie on video without given your National ID!
Yes, even the video rentals have access to the central National Id database,
that stores our name, age, gender, residence and marital status.
But the users of the database aren't allowed to exploit that information and they don't!
We have laws about privacy and the laws don't allow two different data sources to be joined by using the National ID without our permission....
And in the case of video rentals, they aren't allowed to store rental data for more than few days after the movie has been returned. So the rentals can't analysis their data much and categorize people...
I'm not saying that because exploitation isn't allowed nobody would ever do it if they had the opportunity.
I know that some people commit crimes... but still that would never get them very far, because as everybody knows "crimes don't pay", at least not in the long run....
I don't think many people would base their business as a marketing firm on using illegal methods of exploiting privacy.... That firm wouldn't last long...
This is quote from a American women living in Iceland, making fun of our card-usages:
"...in order to finalize the transition into a cashless society, there will be a Kronur [Iceland's local currency] burning festival, where all country men shall shall bring their paper money, burry it in the ground, drenched in amonia, and later serve it to foreign tourist, explaining to them, that this is the national food and it would be highly offensive not to eat it."
As Kent Beck, the guy behind Extreme Programming says: "Embrace change"...
Embrace the cash less society - at least it can give us a continued dotcom-like conference-topics