Slashdot Mirror
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?"
I like cash. I also like paper. I'll bet i'm not the only one.
When it comes right down to it - there are a lot of intangibles that using cash provides - plus, is it really faster to swipe, enter a PIN and wait for authorization, than it is to get $2.15 change from a 5?
Me thinks not.
There are 01 types of people in this world. Those that understand binary, and me.
When the lower class sorts (you know, Joe Sixpack and friends) amuse themselves, cash often plays a part. You can't stick a dollar bill in a stripper's thong with a debit card, you can't buy marijuana with a credit card, pool games take quarters, and most bars only take cash.
Remember, just becuase you live online and buy porn online doesn't mean Joe Sixpack does.
The only time I use my debit/ATM card for actual purchases is when buying on-line.
For all other purposes I withdraw cash - from as many random ATM's as I can manage.
I'll continue to do so until I receive an absolute guarantee from my bank that my purchasing habits are completly private.
And, of course, there are some things that plastic just can't buy...
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We have to remember that money as we know it sort of evolved. It went from physical gold and other backing, to gold (and other backing) stored in banks with bank notes holding them, to paper whose only value is defined by the government issuing it, with no backing. Modern debit cards and checks are just bank notes that represent money that doesn't really represent anything other than the fact that it is money. We already are cashless, people just seem to want this state to be computerized... Well, realistically it is... I mean, a lot of the stuff we buy we never phyiscally move money around to pay for. Actual cash is just another representation of this, why get rid of it? If people stop carrying around cash on their own, I'm sure that less will actually be issued, but why make a big deal of this transition, when it will just occur naturally (if it occurs at all).
> it's no less theft-proof...it just takes a theif of a different calibur to pull it off
That's like saying steel is no less melt-proof than butter; it just takes a different temperature to pull it off.
...please, continue to use your credit cards and cheques.
I like cash because I don't care to receive any more spam in my snail-mail inbox than I already do. I particularly like cash for black market purchases...kinda difficult with credit cards. Also, if you like avoiding all the troubling paperwork of paying income taxes on that $20 that you got for mowing the neigbor's lawn, cash is good.
Can any of you imagine having to set up a paypal account when you are 13 years old just so you can get paid by the guy down the street for mowing his lawn?
Cash ain't goin nowhere...
"Money will always be paper...but gold will always be gold..." -- Hudson Hawk...Mayflower...
The thing i worry about in a cashless society is that once you have the centralized system to deal with clearing the transaction, people are going to extract marketing data. The government is going to look at your purchasing habits and decide that some people have similar purchasing habits too far to one or the other side of the political spectrum, and are too much of a threat to middle class suburban normalcy and should be liquidated.
Also that means that if they _suspect_ you of selling/using drugs, they can freeze your finances completely. It gives _way_ too much control to somebody else, based on politics, purchasing habits, etc... It makes my skin crawl.
P.S.
I don't think many (any?) major economic powers even _pretend_ to back their currency with anything real anymore, let alone gold.
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Play Six Pack Man. I
While it is worthwhile for the government to regulate the amount of money available through monetary instruments and fiscal policy, it seems pointless in our day and age for the government to continue to track the quality of trillions of pieces of paper.
Note that this is not simply a domestic issue - numerous other nations use the greenback for their currency, so this creates a huge bloated government apparatus that is completely unnecessary.
Nowadays, I never carry cash around. Before, I always used cash and ended up spending a lot more money, just because I happened to have it on me. With Debit/Credit, you pay exactly what the goods cost. With cash, you need to take out more than is necessary to cover the cost, and lets not forget the tons of change that (for me at least) ends up just gathering dust all over my apartment and in my car.
- Cash is really the only means that we have for anonymous/semiprivate transactions. Everything can and is tracked. Big brother is watching you.</paranoia>
- People with poor planning skills. To many many many people in this world (although perhaps the interection of slashdot readers and this particular group of people is not very large), money that you can't hold in your hand isn't really money: this means that it can and is spent on a whim with not "plan". This is why people get so down in credit card debt that they can't seem to pull themselves out of...
If people are allowed to spend "insubstantial" money that they can't feel slip through their fingers... then many people could have a problem with their personal finances...IOW, credit cards are not for everyone. :)
-Chris
Funny, I relocated to the SF area a couple years ago, and as an experiment, I didn't order any paper checks. I managed to get by the first year using only one of the temporary checks they gave me. I finally ordered paper ones, and I've used four of them, of which three were for goverment agencies (DMV, IRS, State tax). Nearly everything else is paid online... I use a credit card to buy gas and food, and pay that bill online weekly. I carry some cash (cigarettes and junk food account for most of that), but it's a small percentage of what goes through my bank account. So I'm nearly cashless.
Still, even though it's plausible to go without cash, in order to eliminate it, you'd have to get the sellers to stop accepting it. How would you do that? The only way would be if the government eliminated cash completely, for example, if they offered to redeem it for credit up to a certain date, and refused to back it thereafter.
For starters, the implications for personal privacy would be substantial, and there would likely be widespread public outcry. But more to the point, cash is a simple method of anonymous exchange that allows economic activity to take place at a very low level. Eliminating it would impact many transactions, as some have observed. Some are illegal, such as drug deals, but others are benign... flea markets and garage sales, poker games, tipping, lemonade stands, and a lot of everyday economic activity among poorer people.
So I just don't see how it's possible, no matter how close we come, to being able to eliminate cash entirely, nor should we want to. We will be pretty close, in fact, we already are pretty close... if we choose to, we can live with minimal cash. But I don't want to go without it completely, and I don't think many others will either. Anonymous paper cash is a pretty profound invention, and electronic transactions will only replace it for transactions that offer substantial improvement in convenience or that require some sort of accountability.
I'm not sure that this was the case. It wasn't that the valued goods became scarce, so much as it was impossible to wield $100,000 around in your pocket. Within a given country, the government provided security as for the value of coin, and in the worst case, that coin had some value if melted down. Later as coutries trusted this sort of exchange fiat money (or completely worthless) was used.
This required the trust that you could get something valuable back if you wanted (say to trade internationally).
In the US at least, it was eventually determined that the economy need to grow and shring, and that fixing equity on stocked goods was innefficient. If we had inflation, for example, we would have liked to have introduced new cash into society to compensate since the price of gold (the US's former standard) didn't directly vary with the rate of inflation.
Things were still safe because you could regulate the printing/coining of fiat monies. But then checking became very popular. Now you had the concept of float. One bank would honor a check (and allow accumulation of credit/cash) before the debited bank could deduct.
Later we have the concept of equity-based loans. I percieve that your good is valued such that I'll lend you most of the money for it. You take that money and spend it (via checks), but more goods and take loans out on them..
All in all, checkable money develops a velocity (the rate at which the same virtual or physical dollar is spent per year) such that our net assets are multiple times the physical printed fiat dollars total value.
In a booming economy, that multiplier increases. The problem is that that rate of boom has to be maintained or there will be a dramatic credit crunch. A recession after a boom is devistating because trillions of dollars can up and dissapear (after all checks are registered).
This would have happened even with a gold standard due to virtual assets and value.
The issue has always been one of efficiency. Yes we're more at risk now that a single number can render our bank-account empty. But we have a much greater ability to refill that bank-account than we did when someone with TNT could "blow the safe" and bring you back to square one. You can be insured, bring out new mortages so you don't starve, and most importantly be paid a heck of a lot more than days of old due to incredible industry efficiencies.
-Michael
-Michael
Has anyone else noticed that it's actually hard to use cash in some situations? For the most part, I'm totally cashless. I have a central checking account and a debit card w/ the Visa logo. So rather than go to the ATM, withdraw some 20s, and spend them. I just go to a place of business and they withdraw the exact amount for me.
But what about the people that prefer to exclusively use cash?
I worked in a computer retail store for a while. And when people came in and bought a high-high-end PC or laptop with just cash, you'd better believe we noticed it. When someone peels 20-30 $100 bills off a stack, everyone in the store craned in for a better look. And we checked all that money verrry carefully.
A similar story was told to me by a friend who worked at a candy factory. The janitor at the place had just bought a brand-new car, but was complaining that the dealership almost wouldn't sell it to him. Why not? Because he had paid in CASH. $26,000 in cash. He actually brought the stacks of bills to the dealership in a briefcase, all ready to go. And, of course, the dealer was a little suspicious about someone carrying that much cash.
So you see my point? How is it that we have come to trust pieces of plastic or signed pieces of paper as opposed to cold, hard, cash? Somehow America has embraced a further level of abstraction from specie to the point of almost rejecting other forms of payment. It just seems like curious situation to me. I'm not sure if I like it or not, though. Like I said, I'm almost totally cashless. But I'd like to believe that if I wanted to switch to cash-only, I'd be able to use that money for whatever I want. Now I'm not so sure I could.
4-star general in a one-man army.
However, the more I think about it, I realize that with some careful consideration and common sense legislation, both could be a great boon to us.
If the government is able to receive real time, compleatly accurate consumer and business spending information (in the aggregate, of course), it suddenly has access up-to-the-second and 100% reliable data for forming economic indicators, which are at best currently formed quarterly.
At that point, the governments economists can catch onto economic trends quickly and react before any major problem begins to occur. From an economic standpoint, it would be wonderful.
The other issue surrounds marketers collecting information. I can't seem to understand the danger in this. I for one really want marketers to know what I'm interested in; We have a real chance to change the role of advertising from a broadbased attack on our senses to facilitate brand reconition for products and services we don't need or want (current) to a tool that educates us to the availibility of products and services we genuinanly would like to know about.
The only key to making this work is a continued diligance in making sure our lawmakers are very specific in the drafting of legislation so information does'nt belong in the wrong hands: For example, governments can only collect data in the aggregate and cannot submit individual information to law inforcement. Or Advertisers can only collect the most basic of demographic information (zip code, income range) about us.
The Internet is generally stupid