Total payments uberfication is a virus, and we need to build resistance to it
Brett Scott is a campaigner, monetary anthropologist and former broker. He is the author of The Heretic’s Guide to Global Finance: Hacking the Future of Money.
Cross-posted from Brett Scott’s substack
Imagine referring to whisky as ‘beerless alcohol’, or to Metallica as a ‘folk music-less band’. Those descriptions are deeply uniformative because they draw attention to what’s absent rather than what’s present. The same can be said about the phrase ‘cashless society’. It’s an evasive euphemism that refers to the situation in which every transaction in our economy has to be routed via the banking sector using big tech devices. If this Big Finance-Tech Society is going to be called ‘cashless’, we better call cash payments ‘bankless’.
Cash can co-exist with cards and apps, and when kept in balance, the different forms of payment can complement each other. It’s only when that balance is removed that the dark side of digital payments gets to flourish. Unfortunately, across the world we’re seeing the spread of so-called ‘cashlessness’, a type of contagion in which the option to pay with non-corporate and non-automated money is incrementally taken away from you.
The fight against cashless society, then, is a fight against a state of unbalance. I’ve campaigned on this for eight years now, and in this piece I’ll lay out 10 talking points that you can use to make even the most ardent card-tapper have second thoughts about a totally bank-dominated society.
1) CASHLESS IS LIKE BICYCLE-LESS
Fintech firms have tried for decades to make you think that cash is like an outdated, inefficient and dangerous ‘horse cart of payments’. People who buy into this belief imagine that the digital payment takeover is just a natural upgrade, like getting horse-carts to make way for sports cars on roads that don’t have space to host both. In reality it’s like removing bicycle lanes in a world dominated by Uber. It’s an enclosure that narrows our choices. The core way to defend cash is to show that it maintains a balance of power in the monetary system, much like bicycles maintain a balance of power in the transport system. If you’d like a deeper understanding of this, check out my Luddite’s Guide to Defending Cash.
2) DATA SURVEILLANCE AND MANIPULATION
Some commentators have recently been characterizing the move towards cashless society as a kind of digital nationalization of money by big government, but in reality it’s a privatization by big finance-tech. The vast majority of our digital payments rely on a collaborating oligopoly of banks, card companies (e.g. Visa and Mastercard), fintech platforms, tech companies (e.g. Apple and Google), and global financial alliances like SWIFT. When you interact with this complex, you leave detailed data trails about when, where, with who and on what you spend.
It’s true that governments can do surveillance of that data, but corporates can too. If governments are Big Brother, many firms position themselves as ‘Big Bouncer’ – spying on your payments data to decide if you get access to things or not – and ‘Big Butler’, using your data to creepily manipulate you but disguising that manipulation in the form of helpful suggestions.
3) EXCLUSION
To survive in a market economy your have to buy stuff, which means if you cannot access the payments infrastructure you’ll be severely at risk. While many of the world’s poorest people have historically struggled to earn high incomes, they do not struggle to spend their small incomes in the form of cash. As the cash system gets shut down though, they are forced towards digital systems run by private sector banks that often don’t want them as customers (and who often exploit them). There are also many people who struggle to access (reliable) digital infrastructures, and when the option to use cash is removed, they essentially start getting firewalled out of the economy.
This issue doesn’t just affect people who can’t use these systems. It affects everyone who doesn’t want to use them. This could include people – like me – who are politically opposed to being totally dependent on the platforms, as well as free spirits who don’t want to be constantly tethered to a phone, and people with disabilities who find the tactile nature of cash easier to work with. In places like London, where policy-makers are allowing the cash infrastructure to implode, half the city is now essentially inaccessible to those people unless they are willing and able to turn their lives over to Visa and Mastercard.
4) ECONOMIC CENSORSHIP
Anyone who has ever been financially precarious will know that having no income in a market economy feels like being a fish slowly suffocating on dry land. Having money is what enables you to ‘breathe’ in our system, but in a cashless economy those institutions that control the payments infrastructure have the power to strangle people by blocking their payments. Once you’re dependent on the digital payments infrastructure, the oligopoly of big finance-tech firms (and governments) that control it can choose to exclude you, freeze your account and prevent you paying for certain things.
Libertarians recently rallied around the case of the anti-vax Canadian truckers who had their bank accounts frozen by government order, but partial payments censorship has long been tested on marginalized welfare recipients, such as indigenous people in Australia who have had their spending controlled via systems like the ‘Cashless Welfare Card’. The possibilities here are dark: in Margaret Atwood’s 1985 classic, The Handmaid’s Tale, a patriarchal theocracy uses the abolition of cash as a means to force women onto a digital payments platform to remove their freedom, but we don’t need sci-fi novels to realise that cash creates a buffer against all sorts of economic censorship. It gives breathing room.
5) RESILIENCE
Being totally dependent on large-scale digital systems is a stupid strategy in a world beset by natural disasters, power outages, cyberattacks, systems failures, bugs and hacks. Those things can bring entire economies to a standstill when there’s no cash backup. As the saying goes, ‘cash doesn’t crash‘.
I constantly have to face short-sighted economists who moan about the ‘cost of cash’ – the fact that there’s a cost to running the public cash infrastructure – but that’s like a property developer moaning about the cost of providing stairs in a skyscraper. Picture them saying “Why not leave the stairs out, and only have elevators. Much more efficient! Nobody uses stairs anymore! They’re so expensive to build and maintain, and the youth don’t like them!” We all know how that ends.
If there’s an emergency in a skyscraper without emergency stairs, it’s only the people in the building who are affected, but in the case of the monetary system it’s our entire society that goes down if we have no payments backup. Money is part of the deep operating system of capitalism, a foundation upon which all other industries are built. Any breakdown in the monetary system causes everything else to break, so it’s the one system you have to promote resilience in above all else. Optimising for short-term efficiency rather than long-term resilience is downright dangerous in this space.
Even from a narrow business perspective the cashless equation doesn’t add up. Last year I found myself at a UK music festival where the official beer tent refused cash and had to turn thousands of beer-seeking customers away as the mobile networks their payments terminals relied on repeatedly crashed. More generally, digital hype is built on the probably unrealistic belief that we’ll face no resource constraints in future. Not only do we already have major supply chain problems in microchips, but half the world’s rare earth metal comes from a single mining district in China, meaning the resource constraints could easily be amplified by geopolitical tensions.
6) SPENDING AND INDEBTEDNESS
Not only are we physical beings that understand things through touch, but we are also social beings that like face-to-face interaction. Through the eyes of digital accelerationists though, positive texture like this is seen as a negative form of ‘friction’ slowing everything down. In a growth-obsessed world, this leads to a fixation with promoting ‘frictionless’ technologies that accelerate consumption and production (see Tech doesn’t make our lives easier. It just makes them faster). This is one major reason why governments and corporates promote digital payments. In it’s ‘Benefits of Going Cashless’ website, Visa gloats that people spend 25-40% more with cards, a finding that is backed by other academic studies (see this thread here for a list of 10 studies). Accelerating spending via digital payments might be narrowly good for big business, but not good for ordinary humans: millions of people are driven into unsustainable credit card debt to serve this unsustainable growth model.
7) ECONOMIC OLIGOPOLIZATION
What’s the main difference between walking into a corner store in your local neighborhood to buy Heinz baked beans with cash, and getting the same thing via Amazon with your card? The former only involves one distant mega-corporation – the Kraft Heinz company – whereas the latter might rely on me using a Visa card from Barclays, hosted on an Apple iPhone or Google wallet, docking into Amazon to initiate a payment via Visa’s datacentres to Santander. Nowadays we’re told that becoming permanently plugged into digital corporate oligopolies like this is great progress, and that small local businesses should also become totally dependent on these behemoths. In the resultant cashless economy there really is no such thing as ‘local’. You’re going to have to pay fees to a series of distant corporations thousands of kilometres away to interact with someone standing a metre from you in your local farmer’s market.
8) POLITICAL CAPTURE
Every beep you hear on a contactless card terminal is the sound of the card companies and banking sector getting richer. In the aftermath of the 2008 financial crisis everyone was aware of just how powerful large financial institutions are, and how their ‘too big to fail‘ status held our political systems hostage. Since then they have tried to present themselves as good corporate citizens, sliding into the background while quietly entrenching themselves into our lives via digital finance. A cashless society is one in which we are dependent upon bank accounts for almost everything, but this time the finance sector has characterised this takeover as something driven by the ordinary person.
Gone are the days when the banking sector was made up of family-owned firms. Nowadays they are globe-spanning corporations owned by mega institutional shareholders like BlackRock, the Abu Dhabi Investment Authority, Berkshire Hathaway and hedge funds. The financial sector as a whole has a stake in the cashless bonanza, and the fact that their infrastructures are increasingly the only way we can survive means they can extract enormous political power. This means, rather than fighting to protect and promote the cash system as a strong public alternative, governments try onboard everyone into the banks via financial inclusion initiatives. A cashless society is one in which big finance ceases to be an optional service provider, and becomes a mandatory part of your life at all times.
9) VIBE
As Big Finance-Tech entrenches itself as a mandatory backdrop to all our interactions, the vibe of our economy changes. Older economies have a much greater balance of power between formal and informal spheres of action: in the 1950s you might have gone to work for a big company, but your daughter could still sell lemonade on the side of the road without paying a Mastercard executive. You might have ended up being a yuppie lawyer in the 1980s, but you could still flip a coin to a busker without it depending on your bank. A modern ‘cashless’ economy, by contrast, is an economy where everything routes via formal instutions, and this means it feels different.
The attack on cash is one element of a broader process of corporate-underpinned gentrification, in which more down-to-earth informal economies are systematically replaced with a shallow layer of choice built on a deep layer of corporate domination. Think about the new breed of cashless ‘independent’ stores that are popping up in big cities – the craft beer place, the high-end cupcake bakery, the hipster coffee grinders. They look small and independent, but in reality they are plugged into a complex of tech and finance firms, and their independence is superficial when compared to the cash-only Jamaican record store in London or the Turkish barber shop in Berlin. This gentrification seems ‘modern’, but deep down it’s driven by a profit impulse that prioritises automation, efficiency and scale, values that eventually make everything feel sterile. Anyone who has lived in London for more than a decade will remember a time when you could go to small underground parties with cash-only bars. Now the values of that world are being hunted down and assassinated by corporate capitalism.
10) FINANCIAL STABILITY
Sometimes hard-nosed economist types look at me strangely when I pull out my vibe arguments, saying that I’m being ‘romantic’. In that case, I’ll end with a very unromantic point. Even if you do like the endless automation and efficiency drive in our society, and feel at home in the sterile corporate gentrification that it creates, it’s really bad for financial stability. The only reason people trust in cashless digital payments is that they believe those units that they see in their bank account can eventually be redeemed for cash. This becomes especially apparent once you realise that those units are essentially ‘digital casino chips’ issued out to you by banks, and a casino chip means jack-shit if it can’t be redeemed.
During crises people always run to the ATM to turn their digital chips back into government cash, like people running for the exit of an unstable casino. When banks shut down ATMs and branches it’s like them shutting down those exits, but while that makes sense to them individually, when they do it collectively they risk undermining the basis of public confidence in their private systems. After all, if I can’t get out of a bank, do I really want to go in in the first place? In the end, the so-called cashless systems are in fact both legally and psychologically tethered to the cash system.
If you want a deeper dive into all of this, check out my 2022 book Cloudmoney: Why the War of Cash Endangers of Freedom. Please do leave a thumbs up if you found this useful, and let me know in the comments any experiences you’ve had with the cashless contagion in your local town or neighborhood. Thanks for reading.
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