Cash and freedom
By Alberto Mingardi
In 2014, John Cochrane authored this beautiful post in defence of cash. I’m never tired of pointing it to people’s attention, as he makes so many important points.
Olivia Townsend has an interesting piece on CapX, in which she comments upon Denmark’s dream to become a perfect “cashless society” by 2030.
She forcefully argues that “You do not need to be in possession of aggressively Libertarian views to recognize that a cashless society requires the relinquishing of freedom”. Hear, hear.
I’m not so sure, however, that I’m in complete agreement with her conclusion. Townsend maintains that
Ultimately we are the victims of our own demand for convenience. Digital currencies are not being forced upon us; we have an insatiable demand for quicker, more convenient payments and services.
It seems to me that the issue is not of digital currencies being voluntarily chosen by an overwhelming majority of citizens. If that was the case, so be it. I’ve read that in Sweden many stores simply don’t take cash any longer. I am not so sure I understand the rationale of such a move (ideally, you would like to be able to meet consumer demand with as many means of payment as possible, not to say no to some), but if this is a free, spontaneous evolution of culture, driven by the fact that using credit cards is just so much more convenient, I don’t see the problem.
It seems to me, however, that mostly we are dealing instead with purposeful political decisions. Outside Nordic countries, people seem to instinctively value cash (for different reasons: among others, its being more “tangible” than the electronic alternatives) and need authorities to “nudge” them, in order to stop relying upon it. Michael of Liechtenstein points out that the abolition of cash will be used “first to facilitate the nationalization of private savings – a sort of legalized theft – and second, to give the state total control over citizens’ finances”.This might sound all too gloomy, but Liechtenstein’s article is well worth reading.