What better way is there for governments and corporations to track us constantly than with the increasing and irreversible trend towards frictionless transactions, where paying is done by smartphone, not cash or credit card. In some areas of Africa, smartphones are a primary way of paying for goods. However, along with this ease of usage comes positively awesome possibilities for governments to follow our every move and to dream a perhaps not so impossible dream to get rid of cash transactions.
Mobile payments are becoming common in other parts of Africa: 17 million Kenyans use them, out of a working-age population (15 or older) of 25 million. What’s happening in Africa – getting rid of cash – is every government’s dream: no more anonymous transactions. It would end the underground economy, black markets, or smuggling. Small-time tax evaders would lose an important tool. Eliminating cash would be useful in the war on drugs or terror, or in any other such “war” on products or strategies. Even “anonymous” virtual currencies have to pass through internet service providers and leave a digital trail, unlike cash. If only cash could be eliminated!
With smartphones, all transactions happen from one device, which makes surveillance so much easier.
Opinions are divided over whom to distrust more: governments or corporations. But one thing we know: mobile payments and the elimination of cash, a quantum leap for Somalis in their quest for modern life, will also make life a lot easier for governments and corporations in their quest for the perfect surveillance society.
Paranoia? I think not. The war on cash is already happening. JP Morgan is restricting the use of cash in safe deposit boxes. At least one Swiss bank is refusing, under some circumstances, to transfer funds, apparently because they just don’t want to.
It is undoubtedly a huge red flag when in one of the countries considered to be a member of the “highest economic freedom in the world” club, commercial banks are suddenly refusing their customers access to their cash. This money doesn’t belong to the banks, and it doesn’t belong to the central bank either.
Naked Capitalism has ten “spine-chilling quotes” about the war on cash, much of which is being done by raising the terrorism flag. Terrorists use cash to buy things. Therefore, cash is evil and must be eliminated, along with any semblance of personal or financial privacy.
1. Kenneth Rogoff (from the intro to his paper The Costs and Benefits to Phasing Out Paper Currency):
“Despite advances in transactions technologies, paper currency still constitutes a notable percentage of the money supply in most countries… Yet, it has important drawbacks. First, it can help facilitate activity in the underground (tax-evading) and illegal economy. Second, its existence creates the artifact of the zero bound on the nominal interest rate.”
In other words, cash (not money) is the source of all evil and must be destroyed because governments can’t trace its every movement, and it represents a limiting factor on central banks’ ability to continue their insane negative-interest-rate experiment.
But wait, there’s more.
The “War on Cash” is heating up. Louisiana has outlawed paying cash for second hand goods, under the pretense that criminals sell stolen goods for cash. France outlawed paying more than €1000 for anything, and you cannot get more than €200 from an ATM.