The EU Commission seeks to ban cash: A cashless democratic sham?

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Cashless economy demonetization india

Belgium, Denmark, France, Canada, the UK, Sweden and many other countries from the Eurozone and Western world are amongst the most prominent countries to move away from cash, namely due to the large availability of other types of payment. And yet, the EU Commission continues to push towards even less cash and fantasizes on killing it completely off. Why the obstinacy? Is cash giving governmental agencies an itch because it escapes their control?

In the Netherlands, 85% of transactions are cashless: transfers, debit, e-payment, etc. take the cake. It doesn’t result from a ban on cash, but a country where 98% of citizens have debit cards is bound to take it easy on currency. In Sweden, cashless transactions amount to even more. The cashless world champion is Belgium, where only 7% of transactions are carried out in cash. Cashless-support Robert Colville recently published (1) an OpEd in which he wrote: “it’s about not just cash but credit cards themselves disappearing – about paying for whatever we like with the wave of a phone or the blink of a biometrically-verified eye. That future is coming sooner than we think”. As more options opened up to the public to make their payments, the more digitally developed populations slowly adopted them, reducing gradually the use of cash. Much to their government’s delight.

India violently pushed the envelope in the end of 2016, when the Prime Minister announced overnight that almost all banknotes would be null and void within a few weeks. The BBC announced (2): “In an unscheduled televised address on 8 November Prime Minister Narendra Modi gave the nation just four hours notice that 500 ($7.30; £6) and 1,000 rupee notes would no longer be legal tender. People were told they could deposit or change their old notes in banks until 30 December and new 500 and 2,000 rupee notes would be issued.”. This set off an earthquake in a country where a large share of the population has no debit card, cell phone or even access to a nearby bank.

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The Indian PM announced the move was intended to fight corruption, crime, terrorism, as well as to modernize the country. However, the reason simpler, yet more complex. The Indian government, like just about any other government in the world, is trying to force its citizens under more of its control. From a governmental point of view, complete control means more taxation earnings, more powerful means to tackle crime, and better population control.

National governments, international governmental bodies and interstate agencies all want to kill cash, so as to close the loop on their control over populations. Because cash is the only true peer-to-peer payment vector, killing cash means a citizen has nowhere to hide from governmental control. This explains why, as the cash-killing pressure grows from governments, alternate currencies such as bitcoins continue to develop: citizens who see governmental hyper-power as a threat to their liberties move to the only place where they can be left alone. Bitcoin News published a 1999 interview (3) of economist Milton Friedman, broaching the question of civil liberties: “The Internet is going to be one of the major forces for reducing the role of government. The one thing that is missing, but will soon be developed, is a reliable e-cash: a method by which on the Internet you can transfer funds from an A to B without A knowing B or B knowing A. The way in which I can take a $20 and hand it over to you and there is no record of where it came from”.  Many people today see crypto-currency not as a way to commit crimes, but as a way to fight back on government control.

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In all parts of the world, states struggle to acquire more control. Many Asian, South American and African states, sometimes dubbed “failed states” by the West, have very limited or non-existent control over their citizens and territory. Greece has no cadaster, many African countries have no civil registries, and almost half the world has only an approximate idea of the size of their own population. But in the West, a State knows each of its citizens and residents by name, where they live, where they work, what they drive, the names of their children, the size of their house, etc. To that existing data repository, States can add potential data: data which can be easily accessed through online investigation: whom they call (with phone registers), whom they do business with (with banking registers), where they go (cell phone tracking), etc.

But cash eludes their control, because it doesn’t rely on banks or any other intermediary. Killing cash will be the ultimate step of state control. Payment-method specialized website LTP reports (4): “Increasingly, government agencies are also feeling the need to shift to modern payment processing tools and techniques and leave the traditional formats behind. A number of companies are fulfilling the government’s needs through their payment rails”.

Public entities claim to be fighting cash, in order to better protect their citizens, but there is far more to it.  If the advantages and disadvantages of cash are weighed from a citizen’s point of view, maintaining the existence of cash is obviously preferable: while other types of payment can be practical according to circumstances, why deprive oneself of an option which we use every day? But that same balance from a state’s or superstate’s perspective is very different. Be it fiscal agencies, or law enforcement, or cyber-surveillance, governmental bodies yearn to reign every citizen in the world -not just their own – into the electronic world, where national borders no longer exist and civil rights to privacy can be easily and discretely hacked into. They will apply to the 0.01 % of people who use cash for criminal and terrorist activities, and for the 99.99% of law-abiding citizens who don’t.

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1) http://www.telegraph.co.uk/news/2016/04/19/cash-is-dying-and-wont-be-missed/

2) http://www.bbc.com/news/world-asia-india-37983834

3) https://news.bitcoin.com/bitcoin-bill-rights/

4) https://letstalkpayments.com/payment-processing-companies-serving-the-government/

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