The War on Cash
thelongandshort.org
thelongandshort.org
I prefer societies that expect people to do the right thing and have measures in place to deal with anti-socials than societies that expect people to do the wrong thing and therefore try to control everybody for it.
syntax is important! ;)
My opinion is: Anyone thinking the government being able to track every transaction could possibly be a net good thing is delusional.
It seems freedom and autonomy matters less and less these days.
That's literally impossible.
I'm with the cypherpunks regarding nsa/etc passive collection though (which I assume you're referencing)
Passive collection of digital data has nothing to do with cash transactions though. Which is the entire premise of this comment chain.
So either you've misunderstood what we're talking about or you're schizophrenic and think all cash transactions can be tracked.
Care to elaborate?
Please explain; How is a dollar I found on the ground yesterday and placed in a random mailbox today tracked?
Oh cash, my comment was about electronic transactions, I'm in huge favour of cash. Sorry, my bad.
Tracking all money spent would give a huge additional opportunity to many government agencies to harass those they find obnoxious. I have little doubt it would get misused very soon.
Do you want to have to report that you gave that teenager down the street $20 to mow your lawn, for example? That can make you an accomplice in tax evasion if the teen doesn't report that $20, and might make you run afoul of labor laws (after all, they probably couldn't work for a landscaping company because of dangerous equipment). You are unwittingly taking part in a black market at that point.
Now, if the data is used to make laws that are actually followable and allows for normal things such as the above to take place (which would make for a great deal of changes, including drug laws), maybe it would be a good thing. It would also need to be open enough for citizens to also track government spending and other things - otherwise, it would just be totalitarian.
The meme that banning cash is a useful way to fight tax evasion is hilarious propaganda. Unreported cash transactions are tiny compared to the tax avoidance and evasion done by businesses and the rich. Banning cash doesn't make big business pay a real tax rate, nor does it prevent profits from being hidden in overseas accounts.
Blaming low tax revenue on cash is a convenient distraction. When everyone is focused on their fear that the average citizen might get away paying less taxes, nobody notices the people cooking the (non-cash) books and/o buying legislation.
That depends on your perspective. Our overlords have lost the war for hearts and minds of the 10% [1]. So the classic problem here is how to "drain the swamp". And this is a perfectly correct solution.
In this very forum a few months ago someone posted how they were afraid to search for Adhan -- the Muslim call to prayer -- because they didn't want to end up on a list. This approach works. It works silently, efficiently, and there is no paper trail to have to respond to in a future (one hopes) crimes against humanity tribunal.
[1]: Just a round number. The 10%(™) signifies the significant cross cutting core subset of society that the tip of the power structure, and the captive civilization, critically depends on.
Regarding negative interest rates - this is something that sounds really scary, but actually isn't. We aren't talking about a hard asset like gold - we're talking about fiat currencies. Every time your government expands the money supply and triggers inflation, you're losing money. If you try to prevent governments from setting negative interest rates, they will just pump up the money supply and make you lose money through inflation instead. There's little point in banning negative interest rates, unless you're willing to ban monetary-supply-expansion as well. And unless you're a hardcore Ron Paul libertarian, I bet you've never protested governments promoting moderate inflation.
Regarding anonymous monetary transactions, I agree that there is value in this. This can also be accomplished through cashless transactions. All you need is an aggregated prepaid debit card service. You buy the prepaid debit-card using your regular bank account, and then use that prepaid debit card to conduct anonymous transactions.
The one upside of cash is minimal transaction fees. It always annoys me that Visa takes a 1-2% cut from every single transaction. It effectively makes us all 1-2% poorer in the process. But this is a market-solvable problem if the government took adequate steps to foster competition, and ban anti-competitive tactics. We've already seen many attempts recently, such as Apple Pay, to undercut the credit card companies fees, while still allowing cashless transactions.
Overall, cash is a pain to deal with. If I never had to touch cash again, I'd be a perfectly happy man. I don't think the government should take steps to discourage/ban the use of cash, but if private merchants and individuals decide to abandon cash, the government certainly shouldn't interfere with that decision. The current benefits of using cash can certainly be replicated and had, even in a cashless society.
It's quite clear that the existing power structure "wants" to hinder anonymity, whether deliberately for more control via Orwellian crimes like "money laundering", or just emergently where no party wants to get stuck holding the bag in our defective soft-money banking system.
Cash is basically what we've got in the medium term. I've personally gone back to using cash for groceries and other various sundry purchases, because pushing back against the government+corporate surveillance panopticon is the right thing to do. This idea of anonymous e-payments is completely hypothetical until eg a proper replacement for Bitcoin arises that has untracability and can withstand nation-state attacks.
I'm under no illusions about its anonymity though - every note has a serial number right on it. It would be prudent to assume that banks record the serials of bills that are withdrawn and deposited. I don't actually think this is happening at the consumer level just yet, but I'm sure the diktat has been drawn up and is just waiting for the right 24 hour tragedy.
Cash is mixed by changing hands multiple times before being deposited, so even recording the serial numbers at withdraw and deposit time yields little information. Notes frequently pass between people who don't even know each other. At best you might be able to make some assumptions about where people shop regularly, but there's no mandatory database of what is purchased.
Your suggestion is not anonymous at all. Prepaid cards can only be anonymous when purchased with cash, and even then they can be traced back to the merchant who sold them who may be able to identify the buyer. (eg. Cameras, known to staff, etc)
Half of the problem with cash could be solved by ending the war on drugs. The war on drugs has created a class of people whose main economic function is to transfer wealth from the public to the worst people in society. This is a many-headed monster that robs/burglarizes/steals money from average people, and vacuums it into a global system of money laundering. The cost is mostly absorbed through higher insurance premiums and more costly welfare schemes. The physical needs of this class of people are often carried by family and charity.
No cash could kill this, but so could treating drugs like simple agricultural and/or chemical products and regulate the distribution.
All costs of the war on drugs are covered by the public. All profit by heavy criminals.
Sort this first, and then get back to cash and its utility in evading taxes.
Private banks produce electronic debt which is fungible with "cash". This is available "on demand" as cash but only if you wish to withdraw less than the 5% which has a physical representation. The rest is available on demand to transfer as electronic banker-debt/credit into another part of the banking system.
The vast majority of the private bank debt is issued via lending against land.
I don't take issue with the use of cash in the drug trade, I'm unconvinced removing cash would see this fixed, most likely barter would take place instead.
I just wished to take issue with the fast and loose "cash is public".
I agree wholeheartedly that bartering is the logical continuation of the drug economy in a cash free world. Maybe some pseudo currencies would also arise, creating black market banks.
Money is power. We, the public, ought to stop propping up cartels and giving power to drug lords. My suggestion is to try that first, and then see what problems remain with cash.
We should look into the root causes like the vast siphoning money issuance allows which in turn creates poverty which then leads to drugs.
Visa and American Express aren't going into bat for the common good. The latter in particular is a vile company.
The idea that because the electronic payment system is readily available on all of the "good days" doesn't mean it will be available at a time of strife.
Cash works without electricity, without phones, and without network. That's a killer feature.
Not many places had one of these and some just had to close because it didn't take long for all their customers to run out of cash without atms. Nowadays my credit card doesn't even have the raised bumps anymore. The knuckle-scrapers were a wide open vector for fraud but did at least work in a natural disaster.
How could you still buy stuff then? Debt! When you buy something your name will get noted down and how much you owe. When the systems are running again you will pay off your debt.
http://dailysignal.com/2014/09/25/gun-shop-owners-longer-hip...
They are actively seeking to erode 2nd amendment rights. What other do-gooder impulses will Square pursue? Perhaps they'll next infringe on our 1st amendment rights by prohibiting payments to organizations they disagree with.
We see the same thing with speech brokers such as Facebook. Want to exercise your 1st amendment rights? Not on our platform!
1. There are countries in the world that are better than USA on multiple metrics, and they don't have 2nd amendment rights at all. What say you?
2. Your gun will avail you absolutely nothing when the government comes to you with a Predator drone. You will not "prevent dictatorship" by your gun.
The problem, however, is that you have to have those people actually want to fight a dictatorship. I don't live in the US, so I might be wrong, but it seems to me that most people, not all, most, in the so called gun culture there are more than willing to bend over and be servile to authorities, with dictatorship prevention being just a noble sounding excuse to have fun shooting soda bottles in their backyards (nothing wrong with that).
As for the 1700s, all of the wars I mentioned happened in the second half of 20th, and early 21st century, with a gigantic asymmetry in almost every relevant resource. Yet, in all three examples it took the US a whole decade of trying to win and then get a graceful exit, if that, against, basically, people with AK-47s and improvised bombs.
It's evil and dangerous for massively powerful companies (especially monopolies like Facebook) to marginalize the political right just because their leadership are left-leaning.
Also, according to the link, the Obama Administration is using Operation Chokehold to pressure the banks to do something that they'd never get a law passed to accomplish. What happens when the next admin comes in and does the same things to prohibit things that they don't like?
I greatly prefer the rule of law to the rule of lawyers or bankers.
I don't know that guns "prevent dictatorship", as you put it. North Korea is a good case in point - plenty of guns there but the leader retains his position. He's likely to die violently though, so I would tentatively post that one to the side of the guns people.
Guns sure can wreak a lot of havoc, e.g., Archduke Ferdinand, Abraham Lincoln, JFK, MLK, Malcolm X, Yitzak Rabin, etc. Guns are cheap and (relative to drones) easy to make. They can be deployed with a form of AI: a human being willing to risk death or too dumb to know better.
At the current prices, I don't think any current government can afford to deploy Predator drones against all of their gun owners without facing serious consequences(bankruptcy, revolution). Perhaps, given time, your fantasy will become fact.
But I would expect that, if drones are cheap, gun-owners will also be drone-owners. Perhaps someday hunters will drone a passel of rabbit or squirrel from the comfort of their living room, have Google drones deliver the fresh carcass to a processing facility and the dressed frozen meat to their back door? Mmmm, something to look forward to, eh?
Yawn.
And furthermore, private citizen =/= private company, no matter what Mitt Romney would have people believe.
While owning a classic Mustang isn't a constitutionally protected right, how would you feel if you got marginalized by government fiat?
BUT, if merchants stop accepting cash, and only a handful of financial companies control your ability to accept and spend money, THEN it's no longer irrelevant. Have you read the stories about payments being stopped because the memo field happened to contain the word "cuba"? Have you read articles about how difficult it has been for Marijuana companies to operate in US states where it is now legal because banks refuse to provide them with support (no loans, no credit card processing, etc). What if that kind of moralizing were targeted against guns, doing an end-run around the 2nd amendment because it's technically not the government doing it? Or for that matter, what if ANY right that isn't particularly popular were targeted in this fashion?
-https://youtu.be/bO4jHXjCXw8?t=2m57s
"If it's an anonymous transaction, that sounds like a suspicious transaction. Why does somebody need to be anonymous?"
-http://youtu.be/bO4jHXjCXw8#t=4m12s
MasterCard SE Asia President on cryptocurrencies and cash
The idea that digitally tampering with bank accounts would not be noticed or reacted to, but softer measures like inflation rate meddling, or stealth measures like doing a currency re-issuance and controlling how hard it is for people to exchange old money, is absurd.
Not to mention you've managed to ignore the fact that only a tiny fraction of circulating cash is physical cash anyway.
In terms of protecting rights, this is one of the worst, least effective ways to do so.
Who said anything about "digitally tampering with bank accounts"? The situation today, where the bulk of transactions are done through large trusted third parties, which act as deputies for state regulatory organs, means that there is no expectation of privacy in most financial transactions, which increases the power of governments (meaning the political majority of countries) to enforce majority-supported laws that restrict voluntary exchange.
It's certainly true that physical cash does not protect against inflation, but the idea this is the only major method by which governments redistribute wealth is false. Taxation is the main way in which governments raise revenues, and destroying privacy increases the ability of governments to tax.
>"In terms of protecting rights, this is one of the worst, least effective ways to do so."
It is the absolute most effective way to protect rights. Furthering financial privacy increases the protection that the politically disenfranchised have against those with political power more than anything else. Money is power, and having privacy in your usage of money means your power is protected.
Wow. This isn't even supported by any of America's notable civil rights successes of years gone by, whereas the entire history of political corruption is enabled by the wealthy's use and access to opaque financial instruments.
You don't seem to appreciate that it is the ability to transact privately that enables people to circumvent all of the above-mentioned laws.
I think a lot of the "war on cash" boils down to this. Central Banks want to impose negative rates on us to try and get us out of the mess of having too much debt in the system. Cash makes this difficult.
This isn't completely absurd. Slow economic growth quite often boils down to a lack of spending. One way to get more spending is by having the private sector take on more debt.
I think this is a bad idea, considering how the global financial crisis was caused by too much private debt in the first place. It would be better to increase public debt, at least in countries with monetarily sovereign governments, since there is no risk of default and the financial chaos that goes with it.
Second point: I've been hearing voices against cash since before negative rates became a thing. So while they're certainly a factor, they're far from the only one.
Of course, lower interest rates encourage more debt. So if they are honestly trying to do this, they're doomed to failure.
(I model their activity as self-interestedly creating as much debt as possible to further erode the ability of plebs to save, siphoning all economic surplus to them back as rent)
Generally, central bank monetary policy is driven by measures of economic activity, unemployment, and inflation.
This is just one of the aspects that support stronger governments and corporates that put the interests of themselves and a tiny section of the population (those who help these get even stronger) above everything else. While some people discuss about this or mass surveillance or tracking, most of the populace isn't even aware how liberties are being lost and how "the power of the people" is becoming more of a carefully constructed mirage. Things seem to be moving in the direction of a dystopian society where appearances mask reality and common people are kept complacent with entertainment and other things to keep them occupied.
I don't see a cashless world happening in the next few decades, because it will take a lot of work to get people out of poverty first while some entities focus on removing cash. Even if it were to happen, a cashless society would still have many different pseudo-currencies and barter systems (like those that exist in different contexts and systems today). What's worrying though is that in the future many goods and services may become inaccessible (if one wants to avoid electronic transactions) unless one resorts to the black/gray/underground markets.
1. leave 2. revolt
seriously, that's it. we lost the first dozen encounters with totalitarianism, so now options are limited and undesirable. widespread witholding of labor/ consent to be governed is the next step if we are serious about change.
politically, we're on the downward slope for at least another 8 years...
"Leave" doesn't work because there's no place to go. The US empire is nearly everywhere, the best you can do is escape to the different monetary spheres of Russia/China and buy some time.
IMHO our two options are 1. digital freedom through cryptography, or 2. become slave cells of a larger organism.
The first is a fucking long shot, but I don't see any other possibility for individualism.
Then again as I get older, I can't help but shake the feeling we're really just observing bog-standard societal collapse.
http://webcache.googleusercontent.com/search?site=&source=hp...
Only thing they have missed is the indirection of cashless - the further you are from actual money, the more you're likely to spend, especially impulsively. Works for credit cards, game currencies, and undoubtedly for cashless apps.
Also, before banks provided credit, people used to run up bar tabs not only at bars but also at their grocer. Maybe, the thing to fear is credit, not money being virtualized?
I've never considered that angle, and you may be right, but centuries ago 9 out of 10 or more spent to survive rather than consumerism. We may become used to them, but I'm not sure how comparable the two eras can ever be.
I've also seen enough reports on the topic to see that paying via plastic (both debit and credit) leads to higher overall spending. There's countless gamasutra type articles explaining the income benefits of tiers of virtual currencies. Game monetisation seems to have been researched well enough that most freemium have ended up with a combination of soft and hard currrencies, with deliberately unusual prices, and a remarkably similar set of price points for a bucket of gems. They're not all ending up there as customers spend less.
The small inconvenience of carrying around a few bits of paper and metal is worth it to protect the rights of those outside the banking system.
I once got into a car accident on a friday afternoon. It was on a highway, so my car was towed by scumbags who insisted on bringing it all the way back to their facility rather than anywhere useful. Obviously they wanted to require me to come back later, store it all weekend, and rake in more ill-gotten gains.
I demanded my car be released as soon as possible, to which they tried to dissuade me that it would be a lot of money, they didn't take credit cards, they were technically closed so if I went to an ATM they wouldn't be there when I got back, etc. I stood firm since none of this was a problem, bailed my car out, and successfully avoided being further gouged by their racket.
If you don't see the utility in carrying cash you're basically asking to be taken advantage of, in both the immediate and long term.
Really for me this is one turtle down the stack and he needs to ask who creates credits and what that means.
edit: and right on queue in my twitter feed an article on money creation as theft:
http://www.bloomberg.com/news/articles/2016-08-17/meet-the-m...
edit2: and every single time I submit to a post on money on HN "you're submitting too fast please slow down"! What a surprise...
UK last month: Grosvenor dies leaving 9bn GBP in land to his son. We have inheritance tax in the UK, the son should have received a bill of several billion which would fund our health service.
They know where all the assets are, but the UK govt has a special loophole for rich people: trusts. The son inherits the full 9bn GBP.
It's all tracked but the UK is totally corrupt.
Given the above example how will the state act against the rich when all "money" is tracked because it's electronic? They won't touch them.
The Grosvenor family have spent the centuries since 1622 — when Sir Richard Grosvenor was created a baronet by King James I — slowly building up their family fortune. In 1761 Sir Richard Grosvenor, Bt, was created Baron Grosvenor; in 1784 he became Earl Grosvenor. In Robert Grosvenor, the second earl, was created Marquess of Westminster; in 1874 Hugh Grosvenor, the third marquess, was created Duke of Westminster.
The family has distinguished itself by long and loyal service to the Crown and to the people of England. I fail to see why the new Duke should be forced to see the fortune his ancestors have spent centuries building be diminished so brutally.
Having said that, yes, cash sucks. Small coins suck even more and I rejoiced when countries started rounding prices to 5c on cash payments
For example last time if filled up I had a 10euro note in wallet and had about €5.60 in coin change so I just filled up petrol for €15.60 since its not hard to fill up down to a cent amount
Most small shops love coins as added bonus
1 & 2 euro coins, on the other hand, are pretty convenient for small purchases.
Quarters are also sometimes still useful for parking.
If I keep $1999 in my account the bank charges me $5-$10 a month to hold onto it. I'd wager over a third of the country has less than $2000 in their checking accounts at some point during the month.
As I was reading this article I thought of iPredator.se, which provides a non-tracked VPN service. Their USP is "We don't track anything you do". I wonder whether there could ever be a cashless option that offers a similar service. This of course would only address the concerns of privacy and profit-driven interests, and not the other serious concerns raised in the article.
Has there been/could there ever be a bank like that?
Credit unions are not-for-profit institutions, member-owned, and are very successful.
But they don't satisfy the second part of your post. Tracking and auditing transactions is kind of built into the idea of modern banking.
As it is lineups at stores are really really slow since every single person has to fiddle with a card and a PIN to pay for their coke and chips.
I don't feel great about the Eye of Sauron seeing every single thing I do with my money.
We are so fucking doomed.
For the year 2016, and excluding rent, 3.1% of my expenditure has been cash. I've used an ATM five times. [More-or-less; foreign spending isn't on this statement. In Germany I use more cash, in Norway I didn't use cash at all.]
Meanwhile, a private company now knows an incredible amount about you and is potentially willing to sell that information to advertisers, give it to the US government, or get hacked and give it to everyone.
Other cultural factors come into play, again the US comes to mind as negative example due to the way prices are usually displayed without sales tax, which makes it hard to have the correct change in hand quickly.
(Though local taxes are rare, if they exist at all.)
In contrast, Euro bills' size increases with value (easy access in the wallet if you keep them in sorted order) and they are easily distinguished by colour. The largest commonly used coin is 2€ ($2.25), which is actually worth something and doesn't jut clog pockets/wallets. I do wish we'd get rid of the 1c and 2c coins, though.
Well, they do have different numbers on them. Different pictures too. I find them easy to distinguish at a glance.
Take British banknotes for example: http://www.atsnotes.com/catalog/banknotes-pictures/great-bri...
These have clearly been designed to be distinguished. They're different sizes and different colours. One side has a bold number and a bold shape (circle/diamond/square). The other has a monochrome (but not black!) portrait, plus a picture with reasonable contrast.
The Danish notes have the same features, but with brighter colours and a less ornate design: http://www.atsnotes.com/catalog/banknotes-pictures/denmark/d...
By comparison, the American notes all look very similar. A black-and-white portrait of a man, centred, with a black circle to the left and a green circle to the right, with dark borders to the top and bottom. Numbers are in a traditional, unclear font. Slight colouring exists on some values, but only in the background, and the colours aren't far from a green-brown. https://upload.wikimedia.org/wikipedia/commons/6/64/USDnotes...
Pick random countries from here: http://www.atsnotes.com/catalog/catalog.html
Related: how do blind people distinguish dollar notes? I know a blind guy who recognises euro denominations by their size very reliably.
It makes carrying a decent amount of cash a huge pain, since I usually don't put it in a wallet. US cash I can fold up and it stays very well organized, EU cash turns into a crumpled mess in my pocket.
It's a minor complaint, but I do prefer a uniform size. The colors though are spot-on, and the US is slowly starting to change that. The new $100 bill is easily visually distinguishable from any other bill just due to the color.