Before there was a coin shortage, cash was under attack in the media, and ridiculously hailed as a COVID-19 hazard. Now, it seems that news outlets have pivoted to making sure the public thinks of a looming cashless society as a “conspiracy theory.” At the height of anxiety over the coronavirus, CNN berated the American people for using cash. “Do NOT take a bunch of cash out of the bank,” rang one headline; “Dirty money: The case against using cash during the coronavirus outbreak,” read another. CBS News similarly ran an anti-cash story at the time, as did other mainstream networks.
A cashless world would also give these institutions a new resource to exploit: they would have that much more data to collect in bulk on their customers. It was just last year that Bank of America CEO Brian Moynihan said, “We want a cashless society.”
More recent stories, however, have pivoted to feign concern about the growing suspicion of an impending digital coup against paper and coined money. (It’s always fascinating to see how the media manipulates emotions, giving us something to be outraged about one day, and trying to calm us down the next day by trying to convince us we’re outraged about the wrong thing.)
“It's a concern of some that all money would become traceable, which could be the case, but also could be avoided if systems were designed to provide privacy,” USA Today reported. That’s a big if. In fact, that’s the entire issue at stake, because, as I’ll explain, high profile promoters of cashlessness have an interest in gathering private information en masse.
The Associated Press similarly pounced on Facebook posts that reportedly suggested a “conspiracy” was afoot. “Posts circulating widely on Facebook are suggesting that the shortage of coins in the U.S. is a hoax because it doesn’t make sense for the currency to have ‘disappeared,’” the AP reported. (The literal interpretation of the word “disappeared” was the crux of this supposed fact check. It’s possible the journalists writing articles like those are genuinely concerned about the spread of misinformation, but the condescension is palpable and just feels paternalistic.)
Of course, Americans should be concerned about moves away from cash, and there is nothing wrong about questioning who would benefit and who would lose in a cashless society. If that makes you a conspiracy theorist in the eyes of the average journalist, so be it.
For one thing, big banks and financial institutions would reap obvious benefits, beyond saving on the costs of transacting in coins and paper as well as transporting them. A cashless world would also give these institutions a new resource to exploit: they would have that much more data to collect in bulk on their customers. It was just last year that Bank of America CEO Brian Moynihan said, “We want a cashless society.”
For another, there’s the intensity through which cashlessness is being defended. There is no downside to a cashless society for its fiercest proponents. They aren’t worried about finding a side hustle or working for tips. They aren’t kids trying to mow a lawn or who are otherwise priced out or regulated out of the market by minimum wage and child labor laws. The big players thrive in heavily top-down regulatory regimes. The smaller ones, who might moderately improve their standing (like freelancers or startup entrepreneurs), are often reliant on the freedom that cash provides.
Unfortunately, some leftist progressives are enthusiastically spearheading efforts to “help” people in lower economic strata enroll in the post-cash digital system. These initiatives entail subsidizing free checking accounts or other special access to the financial system. (At last, inclusiveness and equality will be guaranteed once that fascist cash is out of the way. The campaign slogan will go something like that).
Instead of policing social media posts for falsehoods (or, more accurately, words that imply falsehoods), journalists could provide more value for their readers by showing what’s valid about their reader’s concerns. There’s a cultural context, an economic context, and a political one too, that inform how a person may or may not feel about the coming cashless society. Each of these narratives, in fact, is more interesting than a “gotcha” fact-check—but they may not come with the sense of relief (or clout) one feels at discrediting a challenge to the prevailing narrative.
[caption id="attachment_182978" align="aligncenter" width="1920"] Bank notes.[/caption]
TO ELITES, IT'S CONSPIRATORIAL IF ANYONE BUT THEY ARE TALKING ABOUT IT
There are more downsides to a cashless society.
Negative interest rates mean an end to traditional savings because, what’s not spent from your bank account, will decrease in value according to the newest negative rate.
In the era of Cancel Culture, other more nightmarish consequences are all too easy to fathom. The difference between being banned from social platforms and financial platforms is a matter of degree, and the latter is already happening.
Nevertheless, the advocates continue to drum up support for fintech adoption. For instance, many anti-cash advocates also tend to favor negative interest rates and much freer reign for central banks. Such policies are easier to enact without physical forms of legal tender.
Federal Reserve Chairman Jerome Powell has expressed his aversion to negative interest rates “for now” back in May, but President Donald Trump and other monetary theorists support the idea. Negative interest rates mean an end to traditional savings because, what’s not spent from your bank account, will decrease in value according to the newest negative rate. Thus, consumerism becomes all-encompassing and of far greater importance for economic activity. The permanent stimulus of an always-consuming market would become a compulsory force, rather than a relief amid a downturn.
So, the threat of a cashless society is real. It’s not just concocted out of fringe viral Facebook posts, but actually, a topic of ongoing and current discussion among the financial elite. Of course, how urgent the threat is in today’s fast-paced and unpredictable environment, people will have to decide for themselves. But just because people grew concerned about something that wasn’t media-generated doesn’t make it a conspiracy theory.
[caption id="attachment_182977" align="aligncenter" width="2560"] Coins.[/caption]
FROM COMMON USE TO MUSEUM ARTIFACTS—UNLESS WE DO SOMETHING ABOUT IT
The coin shortage, which is very real, does have a reasonable explanation though, given the lockdown and social distancing orders over the past six months. Smaller businesses are losing out to the likes of Amazon and other online retailers, so coins are being used much less. E-commerce is thriving under COVID-19.
“I think most merchants, especially small merchants and small-transaction merchants, would still prefer to take cash."
“I think most merchants, especially small merchants and small-transaction merchants, would still prefer to take cash,” said K. Craig Wildfang in an interview with Axios. He is with the law firm Robins Kaplan, which is suing on behalf of retailers against card swipe fees.
Considering that over 90% of companies fail within two years of a disaster according to the US Small Business Administration (anything from political coups to hurricanes and, of course, pandemics), it is all but guaranteed that there will be fewer businesses around to fight for cash as an option, as long as COVID-19 lockdowns and related emergency orders carry on. Even larger chains, like CVS, Kroger, Walmart, are refusing to give physical change, instead choosing to donate the extra cents to charity or otherwise digitize the value for the customer for their next shopping trip.
More and more, physical coins are becoming legacy artifacts. As Clifford Thies at the American Institute for Economic Research explains, pennies cost more than their worth to produce. The time lost in counting them in transactions and transporting them also add to the total cost of using pennies. Thies estimates the use of pennies to cost up to $500 million per year, which may be more costly than simply rounding off prices to the nearest nickel, or dollar.
Thanks to monetary inflation, those same dynamics have an effect on nickels, dimes, and quarters, which are all produced with much cheaper metals than their original form required.
Meanwhile, note the record high prices of gold and silver. The US dollar is being (digitally) printed into oblivion, along with trillions upon trillions of dollars being summoned by the Congress to fund multiple COVID-19 relief bills. Cash may be the last bastion of value, as it retains some scarcity in relation to digitized dollars. And it’s important for people’s livelihood and freedom that it be defended vigilantly.
Don’t let the media shame you into complacence regarding a cashless society. It’s only crazy not to question such a system that clearly some have no qualms about forcing on us all.