July 17, 2010

Eliminate cash and you eliminate (much) robbery.

It would also cut down on street musicians and panhandlers. And what else? Privacy:
"If it's impossible to pay cash when you buy stuff, it's also impossible not to leave electronic footprints behind you, and the electronic footprints from what you buy put together can tell the entire story about your life. This can be very sensitive information... Most people don't want this total surveillance society."


Tibore said...

"Most people don't want this total surveillance society."

Most people say that, but then they go ahead and use electronic payments anyway. And sometimes, for stuff they'd rather not be associated publicly with (I'm thinking adult material here).

I don't argue against the fact that electronic payments can be traced and that there is definitely the possibility of Orwellian surveillance occuring. I'm just noting that lots of people, in the end, don't give a damn in practice, regardless of what they way in principle.

Anonymous said...
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EDH said...

It would also cut down on street musicians and panhandlers.

If the article really wanted to convince people of the benefits of a cashless society, they would have included street mimes.

Anonymous said...

In one of the grocery chains in Copenhagen (Irma City), you can't pay with cash in the evening hours.

The first time I encountered this I was apoplectic. I thought it was the beginning of the downfall of Western Civilization. I started complaining to the polite Danish cashier; then I remembered that I was a guest in a foreign country and I was therefore being rude.

Scandinavians have different ideas about society than we Amerians do. For one, they don't have such a threatening view of government, even though they pay higher taxes. They get services from their government, after all; we don't, 'cept maybe for roads. Their government isn't trying to outright scam them with unrealistic promises for the future (e.g. Social Security) like ours is. And their government isn't filled with narcissistic folks itching to control every little aspect of every citizen's life.

Tibore said...

Oh, from the BBC link:

"If in the long term we abandon cash completely, there will be no robberies, because there's no point in robbing a bank if there's no cash there to steal."

Yes and no. True, there will be fewer and fewer violent, in person bank robberies. But robbers themselves would morph from being the gun-toting street thug to the internet schemer who either looks for vulnerabilities in e-transaction sites or procedures, or will simply scam customers. For an example of the last, refer to the recent scam of putting up fake websites for otherwise legitimate auto dealerships . The fraudsters would of course choose legitimate ones so that car shoppers checking the dealership out would determine that they were trustworthy. The fact that the web page itself had nothing to do with those dealers would be the hidden trap.

That's the direction robberies would go in.

But that said, let's remember the perspective of the union pushing for the abolishment of cash: They are strictly talking in the context of physical, on-site robberies. Within that context, their notions are legitimate. All I'm doing is pointing out that their sphere is not all-encompassing.

rhhardin said...

Penelope Swales started out busking, which it turns out means street musician and not what you'd suspect.

(I recommend "Black Carrie" among the song sample choices.)

Now she takes credit cards.

ark said...

I can't think of any technical reason why we could not design an electronic payment system that would preserve privacy. There are, of course, plenty of political reasons why that will not happen.

blake said...

I remember having this discussion over 20 years ago with Vietnam Vet (Army Ranger). This was just as the ATM card was beginning to serve a broader purpose.

And there's no argument that the government can track everything you buy --every pack of gum--while they misplace hundreds of millions. And I realize this is bad.

But I also realized I really didn't care. I get bored looking at my own books.

Scott M said...

The tired old, "well, if you're not doing anything wrong, you don't have anything to worry about" doesn't hold up when those at the levers of power are just as susceptible to human nature as everyone else. Plus there's that whole mark on the head and hand thing...;)

Tyrone Slothrop said...

My strategy for eliminating cash-- a mortgage and three kids. The last time I got mugged the guy gave me twenty bucks, badum tsssh
wv:mater-- vere vox

Dust Bunny Queen said...

There are no direct practical reasons, as far as I can see, to have coins and banknotes

Of course there are practical reasons.

How are you going to participate in the underground economy and cheat on your taxes if your transactions are all recorded.

How in the world are you going to be able to hire that illegal alien yard worker with an ATM card or Credit Card? Hmmmm?

How are you going to buy used items at a local yard sale. I can assure you that if you come to my yard sale, I'm not going to have a credit card machine or ATM handy.

Want to buy some nice juicy strawberries from the farmer's market? No can do.

Small businesses will not be able to afford the extra costs of the electronic transactions and those that can will PASS the cost along to the consumer.

The application of an all electronic financial society would be that everything costs more and we have fewer individual choices on where and how to spend our money.

Plus....we can't hide our finances from Big Brother.

And of course that is the REAL reason for a cashless society. Total control.

David said...

Tax evasion--the dirty not-so-secret is that tax cheating is everywhere, on not just by the rich.

Tyrone Slothrop said...
"My strategy for eliminating cash-- a mortgage and three kids."

That worked for me for years, Tyrone. Now I find that investing does the trick.

David said...

And divorce--that also works well.

traditionalguy said...

Bank robbery is a red herring. Banks keep little cash on hand outside the locked vault. The insurance against bank robbery loses commands that procedure. The day the government forbids money transactions is the day we become a police state. Maybe Obaminites will find a connection stopping money with stopping the Global Warming Crisis and the Obesity Crisis.

bagoh20 said...

We won't need to build the damn fence.

bagoh20 said...

As it soon becomes easily available to see what everybody does in private, we will lose our taste for debauchery, and that will be a sad day. When we learn that grandmas are a lot wilder than we are, we will flock to religion for some private rebellion. You can't digitize that love.

Skyler said...

Sounds like a great plan.

If you own the credit card company and get all the interest on the cashless money.

jamboree said...

Simple, just create an off the grid private cash option on your cell phone - where you download the "cash" signal - just like an ATM and can exchange it with others like the panhandler or your drug dealer, etc. on a non-archived, non-identifiable P2P basis.

If the corporations don't put the option in then some enterprising individuals will find a way to electronically exchange while keeping it mostly off the grid.

Lastly, it might cut down on physical robbery, but it will increase hacking, salami style computer theft.

Skyler said...

And the pan handler won't have a device for tracking money. And there will still be thieves stealing from the computer account.

The pan handler and the lemonade stands will develop their own currency soon enough, I guess.

BJM said...

Perhaps it's time to corner the Swedish market on pop beads?

A cashless society wouldn't address bartering for services and goods.

One could pay the gardener, house cleaner, nanny or whatever in goods they specify.

Years ago when living on base overseas, I thought the going daily rate for a cleaning woman was disgracefully low, but one does not rock the boat. So I enhanced her pay with goods.

My cleaning lady gave me a monthly list and I bought groceries, fabric and other goods for her at the PX. Fabric,sewing patterns, stockings and American cosmetics in particular were a huge deal...she also had a jones for canned creamed corn and sliced peaches. Everyone was happy.

traditionalguy said...

Eliminate cash and you enable much robbery by the System Administrator/Financial Czar that needs money to buy bigger windmills.

Ari Tai said...

Money and privacy. Has been a lot less since the government passed the "secrecy in banking act" in 1987. Where after you got by the title you discovered the bill was all about the recording and reporting of your secrets (sadly this is true of a lot of the laws – titles are at best deceptive). It enrolled the banks in the back half of IRS processing - because the largest fraud ever perpetrated on the U.S. Treasury was the filing of bogus W2s (often from prison addresses) - as well as the money laundering occuring around drugs. This wasn’t really fixed until the mid ‘90s. The government is incapable of even the most trivial competent business process so they just criminalize bad behavior ("What?! No double entry booking? Too hard, too expensive to check and have staffs to answer the phone and correct our errors."). Another reason to disestablish the centralized component of the federal government and return these functions to the states.

Paper money is now serialized and electronically read at banks and other bulk processors (like ATMs and currency exchanges) - not so much to track people but flush out the counterfeits flooding into the country. Less privacy there than you realize once a judge is willing to allow the police to ask reasonable investigative questions of those whom you interact with – be it the clerk at the local fertilizer company or your bank.

Judge Posner has observed that sand and rust don't violate privacy, only carbon can. Suggesting that our last defense is what the judge, informed by the law and the constitution is willing to admit in evidence (because only the wealthy and powerful will have privacy – esp. after machinery is built that can read the memory-cells in our brain – or other’s brains who are willing to testify against us). One of the sticking points we face is the entire ambulance chasing & stock litigation business is built on using words (in ink or in bits) against the defendant (i.e. what people thought or speculated matters as much or more as what they did – a strange world we’ve created). A privacy fix will shrink the profits of tort bar 10-100x because (recorded) communication will be inadmissible, save for when it documents an act, not a thought.

We're much better protected if our intermediaries are businesses regulated by unfettered competition than relying on government to protect us. If I can take my business to a competitor of PayPal who is competing by stating that they provide more privacy (protecting us from others, including our (and other) governments) than the market naturally delivers. And if not enough of us care about this “feature” then we've voted our preference again (which is / can be no worse than government, while being much more responsive if times change.. unlike the law).

Well, I can dream.

edutcher said...

What nobody wants to admit is that, if you have anything of value, someone will try to steal it - even if it's your DNA, or maybe your scanned eye.

Dust Bunny Queen said...

There are no direct practical reasons, as far as I can see, to have coins and banknotes

Of course there are practical reasons.

How are you going to participate in the underground economy and cheat on your taxes if your transactions are all recorded.

The real reason some people want this, in all probability. Every time Utopia is promised, the price tag is a lot higher than advertised.

Very perspicacious, Ma'am.

meep said...

When I was a kid, my mother was part of a local babysitting co-op, basically. They kept track of how many kid-hours were used/owed with washers.

So this will just give some incentives for some local communities to go back to barter.

MadisonMan said...

What Tyrone said. I find that if I have cash in my wallet, my kids inevitably "need" it.

Rockeye said...

Scott Adams (Dilbert) has a blog. He had a post on this very subject recently. Take a gander for another opinion.

John Lynch said...

Then I'd have to declare my tips.

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A.W. said...

mmm, idiocy.

Okay so for instance about 3 weeks ago, someone started making charges to my account. they somehow had copied the magnetic strip. So the charges were voided and they sent me a new one.

So... what could i use to pay for daily expenses? I mean, according to this guy, I shouldn't have cash, so... what should we use?

idiocy, that's all it is.

RR Ryan said...

I live in Southern California. When earthquakes hit and the system is disabled, try paying with your ATM card. Heck, my boyfriend and I have tried to pay the bill in a restaurant or bar late at night only to have the card declined. Try explaining to a waiter you don't know that it's not likely, as my boyfriend is the vice president of a bank and there's the FDIC limit in the account. Or ask my grandmother(with a ouija board0 about bank closures during the depression.

RR Ryan said...

At the risk of seeming long winded, the system goes down for a variety of reasons including simple updating or maintenence. Cash will probably always be useful.

Penny said...

"Cash will probably always be useful."

Cash and coins. If not for piggy banks, how will we teach our kids the value of saving?

Or maybe that is old-fashioned now? In more ways than one!

Penny said...

"Perhaps it's time to corner the Swedish market on pop beads?"

Club Meds are said to be storing their old cache for the Great Swedish Pop Bead Shortage, set to hit in 2015.

Ingenuity! And oh so green!

AJ Lynch said...

How would you show your appreciation [i.e. put cash in the g-string] at a Swedish go-go bar?

Dave in Tucson said...

Eliminate cash and you eliminate (much) robbery.

And create vast new avenues of theft. Also, who wants to be flat broke every time the network is unreachable?

jeff said...

I dont know. If a member of ABBA cant think of a reason not to get rid of cash, clearly there is no reason.

Impacted Wisdom Truth said...


Maybe the individual can be marked with and RFID chip just under the skin, like those already being used with animals.

It could be put in your forehead or your hand to do financial transactions.

Any group of individuals deemed undesirable could be denied this. If you refuse the implant, you cannot buy or sell.


Penny said...

"How would you show your appreciation [i.e. put cash in the g-string] at a Swedish go-go bar?"

Someone would come up with the idea of pre-signed, pre-approved, denominational credit cards that could easily be slipped in there.

Too much like cash, you say?

Darn it...back to the robbers again.

Anonymous said...

Ultimately, this isn't a privacy issue. It's an equality and fairness issue. There are a lot of people who, for whatever reason, cannot or will not let cash go. A cashless society would wrongfully disadvantage those people.

Penny said...

"There are a lot of people who, for whatever reason, cannot or will not let cash go."

Back in the day, we called them "savers".

Sounds rather quaint now.

Revenant said...

How would you show your appreciation [i.e. put cash in the g-string] at a Swedish go-go bar?

It is semi-common for strip clubs in America to have their own "club money", sort of like a folding-money equivalent of arcade tokens. It makes it harder for dancers to conceal how much they're getting tipped.

Presumably something similar could work in Sweden.

Eric said...

Plus....we can't hide our finances from Big Brother.

And of course that is the REAL reason for a cashless society. Total control.

Oh yes, and they're already starting to turn the screws.

Harsh Pencil said...

If Sweden tried to get rid of cash, my guess is that they simply couldn't. They could require all official transactions be cashless, and they could get rid of the Swedish currency, but they couldn't stop individuals from conducting private business with a different currency, most likely dollars.

Deborah said...

I've got to tell you, I read this afater another scary discussion with my husband and honestly I'm getting close to hysteria about the way things are headed. I don't have the money to escape . I really feel like we are standing at a precipice, with our toes curled around the edge.

Robert Cook said...

"How are you going to buy used items at a local yard sale. I can assure you that if you come to my yard sale, I'm not going to have a credit card machine or ATM handy."

There are already at least two systems (and possibly more) available (or soon to be) where anyone with an iPhone (and possibly other smartphones) can take credit card payments. The two I've seen involve a small swipe device that plugs into the phone.

Would I be willing to swipe my credit card into some other person's iPhone?

Are you kidding?!

But then, I refuse to carry a debit card; I insisted to my bank that I wanted only a basic ATM card, and they provided me one.

Robert Cook said...

If a cashless society were ever to be instituted, one can be sure the citizens thereof would quickly devise an underground economy, with alternative ad hoc currencies, such as are found in prisons, where packs of cigarettes are used as money; and, bartering would make a comeback.

Anonymous said...

ark: I can't think of any technical reason why we could not design an electronic payment system that would preserve privacy.

Bruce Schneier can:

"In [1211], Tatsuaki Okamoto and Kazuo Ohta list six properties of an ideal digital cash system:

1. Independence. The security of the digital cash is not dependent on any physical location. The cash can be transfered through computer networks.

2. Security. The digital cash cannot be copied and reused.

3. Privacy (Untraceability). The privacy of the user is protected; no one can trace the relationship between the user and his purchases.

4. Off-Line Payment. When a user pays for a purchase with electronic cash, the protocol between the user and the merchant is executed off-line. That is, the shop does not need to be linked to a host to process the user's payment.

5. Transferability. The digital cash can be transferred to other users.

6. Divisibility. A piece of digital cash in a given amount can be subdivided into smaller pieces of cash in smaller amounts. (Of course, everything has to total up properly in the end.)

The protocols previously discussed satisfy properties 1, 2, 3, and 4, but not 5 and 6. Some on-line digital cash systems satisfy all properties except 4 [318, 413, 1243]. The first off-line digital cash system that satisfies properties 1, 2, 3, and 4, similar to the one just discussed, was proposed in [339]. Okamoto and Ohta proposed a system that satisfies properties 1 through 5 {1209]; they also proposed a system that satisfies properties 1 through 6 as well, but the data requirement for a single purchase is approximately 200 megabytes. Another off-line divisible coin system is described in [522].

The digital cash scheme proposed in [1211], by the same authors, satisfies properties 1 through 6, without the enormous data requirements. The total data transfer for a payment is about 20 kilobytes, and the protocol can be completed in several seconds. The authors consider this the first ideal untraceable electronic cash system." — "Applied Cryptography," 2nd. Ed.

Getting digital cash right is UNBELIEVABLY difficult.

Methadras said...

This article brings up the Southpark episode about the homeless and the change zombies.

MTF said...

Those who favor electronic over physical mediums of exchange sure do have a strong faith in integrity of the grid. Imagine not having access to money in the event of a long outage, or stores that can accept physical cash.

This idea is a path to a barter economy.