The Harmful Rays of the Moral Vacuum

The Harmful Rays of the Moral Vacuum
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Thursday, January 14, 2010

Are we headed towards a cashless society?

Back in college, I recall an economics professor making an argument in favor of a cashless society.  If all debits and credits were processed electronically, the argument went, there would be zero possibility for tax cheating.  As an added benefit, it would be almost impossible for criminal organizations and terrorists to launder money.

Of course, the very strength of this argument is also its greatest weakness.  It is a libertarian's worst nightmare to have the government in our back pockets in an even more literal sense than they already are.  There could be zero expectation of privacy in an environment in which our every transaction was logged and subject to scrutiny by the IRS and other government agencies. 

In an interview in The Telegraph, a favorite paper of mine from across the pond, a bigwig at Visa Europe makes the argument that the use of cash is a strain on society, and must be replaced by cashless systems.  That man, Steve Perry (presumably not the former lead singer of Journey) says that organizations do not want to manage cash, hence the introduction of innovations like "cash back" at the supermarket.  They are actively trying to remove the cash from their drawers to avoid having to manage it.

Of course, I would expect someone from Visa to make such an argument, as the backers of the big credit networks are the most obvious beneficiaries of a shift away from cash.  On a personal level, I am often hindered by a lack of cash in my pocket.  I do most of my day to day transactions with a debit card.  I find myself stymied when I come across a local bodega or restaurant which only deals in greenbacks.  One example is my favorite local pizza place.  They used to take debit, but their credit card machine broke.  The owner told me that so few people used credit that it was not worth the fees assessed by the credit card companies.  So they are not getting the machine back.  I am rather stingy, and I hate paying ATM fees to get access to my own money.  This necessitates a special trip to the bank every time I want pizza.

One organization that is apparently profiting from our dependence on cash is a company called ATM World.  The locally based company recently put ATM kiosks on most of the corners in this neighborhood.  If this were a 1950s science fiction film, and not real life, my main concern would be that they are developing a literal ATM world.  Populated not with people, but with cold, unfeeling ATMs.  On most major intersections, they have put one kiosk on each corner.  There is one particular stretch of sidewalk where they have two ATMs within 15 feet of each other.  (I will have to take a picture of this and post at a later time  It is ridiculous.) 

My guess is that they somehow negotiated with every single bodega and restaurant owner to place a kiosk in front of their business.  I don't know who uses those ATMs but I'll bet is has something to do with people who need a few bucks to get a meat stick from a street vendor after a night out at the bar.  Most street vendors aren't hooked up with credit machines.

Cash hasn't completely faded out of use yet.  And that is comforting.  After all, how else could we "make it rain" when visiting a strip club?

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