The War on Cash

Here are a few thoughts triggered by items commenting on a possible future cashless society, appearing on BBC Radio 4 over the last week or so: one given by Ajay Banga, CEO at Mastercard, the other by Mark Miodownik “the Smell of Money”.

Miodownik is described as the 89th most influential science writer in Britain, or some such, but his role in this program seemed to be to play an ordinary Joe, rambling aimlessly through a variety of random facts about coins and notes, thereby creating a format within which guest John Kay could attack the institution of cash use as a bad idea both economically and morally.  Kay is a journalist at the Financial Times, who delivered a carefully honed attack on cash use.  Balance to his views seemed to comprise pro-cash comments garnered on the spur of the moment from members of the public, met on a street market.  For a scientist, Miodownik seems to spend a surprising amount of time involving himself in art projects, and the whole tone of his presentation was rather impressionistic.  The negative side of cash was that it was morally and economically a bad idea, the ‘positive’ side of cash seemed to be merely that we have an irrational psychological attachment to it........

Whilst I felt there were question marks about why the Miodownik presentation went the way it did, there could hardly be any about Banga’s motivation.  As far as I can work it out, Mastercard handles about 2 trillion dollar’s worth of transactions each year, yielding about 2 billion dollars profit.  There is a huge profit motive behind Banga’s “War on Cash”.  Such profits are pursued ruthlessly, Mastercard has paid out more than 3 billion in fines connected to predatory market activities in the US and Europe, and has been criticised over its political involvement with the US government by staff members of the EU and the UN.

One aspect of Banga’s presentation seemed to me especially troubling.  He sketched plans to control the spending behaviour of card holders, using the innocuous example of his own daughter as the example of someone whose spending habits he might legitimately want to control.  But why should we believe such controls would end there.

The sinister aspect to all this, is that the BBC failed to bring out the historical relationship between cash use and the growth of personal freedom in society.  Money has been around since before records began – for 5 thousand years and more, but coins only came into being around 600 BC.  And it seems to be the free circulation of those first coins, cash, circulating anonymously, that triggered the enormous cultural leap forward that was see amongst the classical Greeks.  Pre-coinage societies were trapped in intellectual ruts, channelled by the very religious ideologies which controlled the flow of their goods and services. 

Supporters of the “War on Cash” seem to assume that the freedoms we take for granted today are writ in the fabric of the universe, that we can tinker with foundations of the structure without destabilising the rest.  On the question of personal freedoms, they ask “What have you to fear if you are doing nothing wrong?”  But this question assumes we have a government which respects the rights and aspirations of individuals.  They forget, in the unlikely event that they ever knew, that liberal governments which respects the rights of individuals are themselves the product of cash use.  Or so history seems to teach us.

The owners of the electric payment systems seek absolute control of how we spend our money, and, as the old saying goes, absolute power corrupts absolutely.  What I fear is not this society ceasing to use cash, it is the different society that would be born in a world where we do not use cash.  A vein of megalomania runs through books on political philosophy of every century, from Aristotle to Collingwood thinkers close to established elites have characterised the bulk of the population as children.  And if Banga gets his way, I fear this dream will be realised, we will all be treated as children within Banga’s post-modern digital feudalism. I fear no politician would be able to withstand his power.

Rob Tye