How cash protects the public's right to privacy
Jul 19, 2019
The Deutsche Bank economist argues that 'cash empowers the individual through data protection', by balancing the power between powerful data-mining companies or governments, and mere mortals. After all, knowledge is power.
Excerpt from Deutsche Bank
Why does privacy matter? A law-abiding citizen might say “I have nothing to conceal.” This is a misconception. In any debate, negotiation or competitive situation, it is an advantage to know about the other party’s position in order to achieve one’s own desired outcome. It should therefore be in anybody’s interest to protect his privacy to strengthen his bargaining position. However, the data industry allows interested parties to gain insight into an individual’s personal and financial situation. This can easily become detrimental to the individual.
'Wherever civil rights are not respected by the government, cash – much more than digital payments – helps opposition activists to protect themselves from the illegitimate use of public power, e.g. from surveillance and intimidation.'
Digitalisation has greatly increased the information asymmetry between companies and retail clients, to the latter’s detriment. Digital analysis of internally gathered client data supplemented by bought data profiles allow “click-world” merchants to know a lot more about their clients’ private and financial habits than the individual knows about the merchant or its competitors. Given the increasingly strong bargaining position of merchants, how can the consumer know they are getting a good deal?