How Feasible is a Cash-Less Society?

vocaljess asks a question that has been on many a mind over the past decade, if not longer: "I just today realized that it has been over a week since I physically handled cash money. Due to the use of checks, debit cards, online shopping, automatic bill pay, direct deposit, etc, my family operates on a cash-less basis in the vast majority of our business transactions. With more and more establishments accepting credit/debit cards, how many others are heading the same way?" Are the advantages of a cash-less society really all that advantageous? One of the largest proposed advantages of a cash-less society is one of limited-theft, well even though money in a cash-less society wouldn't be tangible, it's no less theft-proof...it just takes a theif of a different calibur to pull it off. Do you feel we are heading toward a cash-less society? Do you think if such a thing were to happen we'd be any better off than we are today?

"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?"

Comments

Postmodernism

[zpengo]

This is something that some postmodernist thinkers saw coming a long time ago. It has to do with the continual separation from reality.

"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.

Re:big brother =:-(

[ddstreet]

I don't think many (any?) major economic powers even _pretend_ to back their currency with anything real anymore, let alone gold.

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:

Congress has specified that a Federal Reserve Bank must hold collateral equal in value to the Federal Reserve notes that the Bank receives. This collateral is chiefly gold certificates and United States securities. This provides backing for the note issue.

Re:Not possible, lower class vices need cash

[bughunter]

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.

Re:big brother =:-(

[quartz]

Yeah, but it later states that

Federal Reserve notes are not redeemable in gold, silver or any other commodity, and receive no backing by anything This has been the case since 1933. The notes have no value for themselves, but for what they will buy. In another sense, because they are legal tender, Federal Reserve notes are "backed" by all the goods and services in the economy.

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.