As
Greece moves closer to becoming a cashless society, it is clear that
the country’s attitude towards cash is reckless and dangerous. The
supposed convenience of switching to a cash-free system comes with a
great deal of risk, including needless overreach by the state.
by
Michael Nevradakis
Part
4 - Cashless policies bode poorly for the future
Where does
all this lead though? What does a cashless economy actually mean and
why are global elites pushing so fervently for it? Consider the
following: in a cashless economy without coins or banknotes, every
transaction is tracked. Buying and spending habits are monitored, and
it is not unheard of for credit card companies to cancel an
individual’s credit or to lower their credit rating based on real
or perceived risks ranging from shopping at discount stores to
purchasing alcoholic beverages. Indeed, this is understood to be
common practice. Other players are entering the game too: in late
May, Google announced plans to track credit and debit card
transactions.
More to the
point though, a cashless economy doesn’t just mean that financial
institutions, large corporations, or the state itself can monitor all
transactions that are occurring. It also means that the entirety of
the money supply—itself now existing only in “virtual”
form—will belong to the banking system. Not one cent will exist
outside of the banking system, as physical currency will simply not
be in circulation. The banking system—and others—will be aware
not just of every transaction, but will be in possession of all of
our society’s money supply, and will even have the ability to
receive a percentage of every transaction that is taking place.
So what
happens if your spending habits or your choice of travel destinations
raises “red flags”? What happens if you run into hard times
economically and miss a few payments? What happens if you are deemed
to be a political dissident or liability – perhaps an “enemy of
the state”? Freezing a bank account or confiscating funds from
accounts can take place almost instantaneously. Users of eBay and
PayPal, for instance, are quite aware of the ease with which PayPal
can confiscate funds from a user’s account based simply on a claim
filed against that individual.
Simply
forgetting one’s password to an online account can set off an
aggravating flurry of calls in order to prove that your money is your
own—and that’s without considering the risks of phishing and of
online databases being compromised. Many responsible credit card
holders found that their credit cards were suddenly canceled in the
aftermath of the “Great Recession” simply due to perceived risk.
And if you happen to be an individual deemed to be “dangerous,”
you can be effectively and easily frozen out of the economy.
Those
thinking that the “cashless revolution” will also herald the
return of old-style bartering and other communal economic schemes
might also wish to reconsider that line of thinking. In the United
States, for instance, bartering transactions are considered taxable
by the Internal Revenue Service. As more and more economic activity
of all sorts takes place online, the tax collector will have an
easier time detecting such activity. Thinking of teaching your child
to be responsible with finances? That too will have a cost, as even
lemonade stands have been targeted for “operating without a
permit.” It’s not far-fetched to imagine that particularly
overzealous government authorities could also target such activity
for “tax evasion.”
In Greece,
while oligarchs get to shift their money to offshore tax havens
without repercussion and former Finance Minister Gikas Hardouvelis
has been acquitted for failure to submit a declaration of assets,
where major television and radio stations operate with impunity
without a valid license while no new players can enter the
marketplace and where ordinary households and small businesses are
literally being taxed to death, police in August 2016 arrested a
father of three with an unemployed spouse for selling donuts without
a license and fined him 5,000 euros. In another incident, an elderly
man selling roasted chestnuts in Thessaloniki was surrounded by 15
police officers and arrested for operating without a license.
Amidst this
blatant hypocrisy, governments and financial institutions love
electronic money for another reason, aside from the sheer control
that it affords them. Studies, including one conducted by the
American Psychological Association, have shown that paying with
plastic (or, by extension, other non-physical forms of payment)
encourage greater spending, as the psychological sensation of a loss
when making a payment is disconnected from the actual act of
purchasing or conducting a transaction.
But
ultimately, the elephant in the room is whether the banking system
even should be entrusted with the entirety of the monetary supply.
The past decade has seen the financial collapse of 2008, the
crumbling of financial institutions such as Lehman Brothers in the
United States and a continent-wide banking crisis in Europe, which
was the true objective behind the “bailouts” of countries such as
Greece—saving European and American banks exposed to “toxic”
bonds from these nations. Italy’s banking system is currently
teetering on dangerous ground, while the Greek banking system,
already recapitalized three times since the onset of the country’s
economic crisis, may need yet another taxpayer-funded
recapitalization. Even the virtual elimination of cash in Iceland did
not prevent the country’s banking meltdown in 2008.
Should we
entrust the entirety of the money supply to these institutions? What
happens if the banking system experiences another systemic failure?
Who do you trust more: yourself or institutions that have proven to
be wholly irresponsible and unaccountable in their actions? The
answer to that question should help guide the debate as to whether
society should go cashless.
***
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