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

Not possible, lower class vices need cash

[typical geek]

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.

Privacy is the issue...

[YuppieScum]

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...

no less theft proof?

[pussycat]

> 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.

big brother =:-(

[drenehtsral]

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.

Re:Postmodernism

[maraist]

Then valuable metal became scarce, so we came to use pieces of paper that represented metal stored in a fort somewhere.

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.

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

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