Recent news item. Denmark is proposing to rule that cash is no longer legal tender for retail purchases. Norway and Finland are also discussing the idea. Sounds as if that great bankers' dream - the cashless society - is just around the corner. And in three nations with a reputation for being social democracies, no less. Maybe Denmark is to be another Greece. "You have to pick off the little ones first."
The measure could be sad news for democrats around the world who have been watching the world-wide struggle between national states and global corporations for the world's wealth/power.
Or maybe the lining is silver. I'll save that for the next blog..
If implemented the measure would mean citizens will have no cash money in their pockets. But they will have that little card (or maybe a mere blink into an eye-scanner will do it) to provide them with purchasing power - in bank-created rental money.
So no matter how much cash you have socked away, if cash is on its way out, you will have to use credit money, that unavoidable tax on economies, personal and national. There will probably be a reasonable time period in which you can spend your cash before your government declares it worthless. After that, everybody will be a total borrower - for every cup of coffee or package of peppermints.
So what about the bigger picture? It could be that the cashless society is inevitable. Statements of the merits of it have been popping up like a barrage of trial balloons across the world. They say:
1. It will provide savings to merchants - in the costs of handling cash. Just swipe, and walk away with your bag of groceries. (They'll have to speed up that credit card transaction at the checkout. But that's a "mere technicality"). Importance rating on a scale of 1-5 0.9
2, It will prevent tax evasion, With everybody's income and money assets recorded in banks somewhere and accessible to government law enforcers, tax evasion will be a thing of the past! Just think of all those celebrity tax-evaders we keep uncovering! And how many more there must be!! Importance rating (if it works out that way) 4
3. It will be good for government budgets, Less spent on items like policing and courts and jails. So there will be more resources to spend on other public goods, like pensions, healthcare, free education. U know, the usual public values everywhere. Or on reducing taxes, or (reach for this one) reducing the national debt! Importance rating 3.5
Summing up: the absence of cash will reduce crime. There will be fewer robberies when people have nothing to steal but the clothes on their backs. And it will be easier to identify "proceeds of crime". and to track and prosecute vicious money-laundresses, terrorists and other base criminals, and - need I repeat - tax evaders!
Cogs Blog Prediction: You are going to hear more and more of these arguments on talk shows, newscasts, from political spokesfolk, financial advisors and indentured economists. Be sure to watch which way your politicians sway.
So, unless..
Unless what?
Unless the new credit money-mechanism is controlled by government-owned banks!
I have more to learn, but I believe Denmark already has a public bank, which lends to citizens. Still, Danes carry the highest level of private debt among 24 OECD countries. Maybe that is why they have been a target for this cashless economy move.
All this bears looking at further. Next blog maybe.
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