The War on Cash Endangers Freedom
Mar 26, 2024
Cash is freedom: a crucial pillar that supports economies and the autonomy of individuals within them. Economic anthropologist and author Brett Scott challenges the opposing concept of ‘a cashless society’, arguing in a recent interview that major players in finance and tech are benefitting from the misconception that we can and should sacrifice the privacy, inclusivity and simplicity of cash.
Speaking with The Fronteras Desk—a site ‘covering under-covered news’—Scott says the idea that a modern economy should exclude cash is being driven by ‘large players acting against the cash system’ motivated by the opportunities cashless payments afford them. Cash serves as unwelcome competition within the payments landscape, allowing individuals to transact without relying on third parties, thus impacting their profits.
A cashless society is one where you cannot operate in the economy unless you go via the banking sector, so you use bank accounts for everything, and of course the banking sector gains enormous amounts of fees and data from the process. The Bank of America CEO openly said ‘we want a cashless society’… Also, the card companies shamelessly act against the cash system. Every cash transaction you do is a transaction that Visa and Mastercard are not making money from.
While cash presents obstacles to the dominance of many financial institutions, it offers irreplaceable benefits to societies and individuals. Privacy is one, with cash transactions not being traced and personal data not being monetised and placed at risk of hacks and other misuse. Also, digital infrastructure cannot provide uninterrupted service year-round, and when it goes down, so too do cashless payments.
The cash system underpins monetary stability… When a hurricane is approaching, demand for cash spikes massively. People realise you want offline money when all the electricity goes down.
Inclusivity is another issue, with all societies containing people for whom cashless options are not desirable or even available—for example, those who lack a bank account—who depend on cash to interact in any way with the economy. Cashless payments also introduce the possibility of third parties controlling expenditure, ‘preventing [people] from spending on certain things and basically firewalling them out of the economy if you don’t like them.’ Cash payments can be made between individuals without such interference.
So is it already too late for cash? Scott does not think so, but recognises it is important for people to appreciate the benefits of keeping cash alongside cashless options, and the need to ‘use it or lose it.’
It’s very, very important to keep part of the payment system in the realm of a small, local scale, to keep that cash infrastructure. Many people still prefer the cash system. I constantly come across people who say to me: ‘We keep being told we’re supposed to use these digital systems, but we don’t want to. We want to use the cash system.’