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Estonian Economist Suggests Abandoning Cash

Posted by timothy on from the not-so-specieal dept.

J-Georg writes "Raul Eamets, professor of macroeconomics at the University of Tartu, proposed today during his TEDx talk that Estonia should stop using cash at all when adopting the Euro as the national currency (Estonian original). He also pointed out that abandoning cash would not be only important for the Estonian economy as a whole but also is a real challenge for both IT and banking sectors and would also improve Estonia's image as an IT-tiger."

8 of 454 comments (clear)

  1. Might I suggest an alternative currency by Anonymous Coward · · Score: 5, Funny

    Leaves might be a better choice. Given the country's forests every citizen would become quite wealthy overnight and it wouldn't require any additional infrastructure. I believe the next US Congress will be considering adopting leaves in the next session as the new US currency since leaves are worth more than the dollar.

    1. Re:Might I suggest an alternative currency by ChatHuant · · Score: 5, Informative

      In fact the value of currency is psychological.

      In fact it's not. Or more precisely, not only.

      If one dollar buys one candy bar, why should that change if there are more dollars? Nothing has really changed in terms of the candy bar's production costs.

      The price of an item is a function of its scarcity and of the effort required to create it. If everybody had lots of money, nobody would be willing to work to create more candy (why bother making candy for a buck a piece, when you can just shake the money tree in the backyard, and get more bucks with less effort?). So candy becomes a scarce resource, and everybody competes for the same limited amount of candy. The only way to get the sweet luxury is to pay more. The price of candy goes up, and will continue growing until either people give up on candy, or the price becomes high enough that making candy becomes profitable again.

  2. no thanks by Trepidity · · Score: 5, Insightful

    So I won't be able to give $20 to a friend without: 1) being tracked; and 2) giving a cut to some payment processor like PayPal? I'd rather use cash.

    --
    10 PRINT CHR$(205.5+RND(1)); : GOTO 10
  3. Without cash... by arunce · · Score: 5, Insightful

    No way. Economies can't work without thieves or corrupt politicians. Even if something emerge to fill the gap, like gold, drugs, diamonds, name it, the neighbor country with real cash would get the benefits. At the bottom, cash on your pocket grants some privacy... and security.

  4. Re:Abandon all your cash by naz404 · · Score: 5, Interesting

    While we're at it, I propose the removal of the artificial rounding off of citizens' bank accounts to 2 digits after the decimal point.

    It is an outdated model stuck on physical money and a scam run by institutions pocketing the fractions (think salami slicing).

    The rise of "paperless" money, rapid currency exchange fluctuations + digital microtransactions at consumer level have made this very feasible.

    I want my bank account to be able to say ".0238538327" after the whole numbers' place. If I make games, I want to be able to sell virtual goods at $0.00056 per transaction if I want to. When your audience is the entire internet, small amounts like that can rack up to substantial numbers. I want institutions to be able to do that for me affordably, and I want to see that number reflect in my account instead of being thrown away.

    I mean in this age of digital, how much does it cost to actually make/record/monitor a transaction when everything's already digital?

    Any takers? Maybe this is an opportunity to create a new startup. Maybe this is a niche that can challenge Paypal. Take it. Run away with the idea. I don't care who implements it, as long as it gets implemented.

    --
    http://www.object404.com
  5. Sounds great... by Beelzebud · · Score: 5, Insightful

    ...Until the power goes out.

  6. Re:Abandon all your cash by Gerzel · · Score: 5, Insightful

    Oh sure. Like most any man on the street he happens to have the time, income to support himself, money to start the project, PHDs in encryption, economics, programming and good expieriance at international diplomacy to implement this himself and not be a lazy ass.

  7. Re:Abandon all your cash by Ethanol-fueled · · Score: 5, Funny

    While we're at it, I propose the removal of the artificial limitations of citizens' double precision data to 16 digits with a floating decimal point.

    It is an outdated model stuck on cheap hardware and a scam run by institutions paid by institutions pocketing the fractions (think salami slicing).

    I want my bank account to be able to say ".0287863987569328746598137649582736985555726938475629835576459837" after the whole numbers' place. If I make games, I want to be able to sell virtual goods at $0.000000000000000000000000056 per transaction if I want to. When your audience is the entire internet and even very poor bushmen from Africa are on it, small amounts like that can rack up to pay for my six-pack. I want computer manufacturers to be able to do that for me affordably, and I want to see that number reflect in my account instead of being thrown away.