According to the Telegraph there is the distinct possibility that the ‘cashless society’ may be just around the corner. In the report, Steve Perry of Visa Europe argues that card payments are cheaper than cash. What our Steve hasn’t hoisted in is that cards ARE cash. Or maybe he has but does not want us to realise the concept. The main reason for a noteless and coinless society he says is that electronic is cheaper.
In the same way that coloured beads, split sticks and ‘ Wampum’ were used as immediate vehicles for transferring value, printed notes and coins do the same but so do credit and debit cards.
But here’s the crux of the matter. Beads, sticks, Wampum, notes and coins were physically held by the owner. The contents of a debit or credit card account are held and controlled by a third party on the ‘owners’ behalf. And that third party will have to account for the movement of that value to a government for tax (and other) purposes.
Getting rid of notes and coins is not getting rid of ‘cash’. It is getting rid of one type of cash, the type of cash that ensures anonymity. Because all transactions by debit and credit card will be monitored and analysed by computers linked to whoever.
Great you say. No more unaccountable payments to dodgy plumbers. No more prostitution that relies so much on notes and coins. No more drug pushers on street corners. No more tax evasion. ‘If you’ve nothing to hide you’ve nothing to fear’ from the computer snoopers.
“Ah! But Mrs Smith, we notice you’ve purchased more that the health recommendations allow for chocolate Ã©clairs. You’ve also smoked over 20 cigarettes a day and had three MacDonalds fatty burgers this week. I also see that your husband has a penchant for the local newsagent ‘top-shelf’ products and that your son has bought a book that is on our ‘suspect list’. Also, looking at your overall spend, we see a discrepancy with your tax return.So you can understand why we are doubling your personal taxes, freezing your assets and raiding your house. After all if you’ve nothing to hide …….. .”
Sound a bit over the top? Alarmist? Of course that wouldn’t happen here? Well, governemnt and local authorities have a history of misusing laws and information to their own ends. All that data exists for card payments already. Supermarkets and card issuers (banks) use it for marketing purposes. With all payments electronically based do you really think we can keep the government’s grubby paws off of the data? There is also already talk of imposing a ‘Tobin tax’ on financial services transactions. A society where only electronic transactions took place would be a temptation no government could resist. And the new tax would only take the cost of transactions back to about the level of when we used notes and coins so what’s the problem?
Every aspect of our lives bar-coded and reduced to digits that any busy-body can scrutinise. A nation (if not a world) of digitised consumers and taxpayers.
1984 is breathing fire down our necks, cash in the form of notes and coins may actually be the last refuge of our real individual freedom. But only for the poor of course.
There will be many people who will want to evade this system. Those who are wealthy and don’t want their children’s inheritance taxed out of existence for example. The rich will accumulate other means of transfer such as rare metals. They after all won’t be allowed to get caught in the tax trap. A whole parallel system, a new form of ‘cash’ could evolve for them. For the rest of us I see a lot more bartering and direct swapping of goods and services returning to society as we try to eke out our living.