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Harvard Economist Is Trying to Kill Cash
- awt 10y agoThis will go as well as the war on drugs, poverty, terrorism, et al.
- ismail 10y agoI remember back in the late 90's listened to a talk which I dismissed as conspiracy. The key points were 1. Moving people away from cash to credit so easier monitoring of society and transactions 2. Moving communications to the "information super highway" with constant listening in Our grand kids will live in a vastly different society. I fear we may be heading to a reality covered in so many dystopian works of fiction. The chilling effects of the constant surveillance we currently have. This was previously posted on HN: http://www.zerohedge.com/news/2016-09-07/why-you-should-be-paying-attention-americas-quiet-war-cash http://www.zerohedge.com/news/2016-09-07/why-you-should-be-p...
- PavlovsCat 10y agoSince the goal is total power, our grand kids will live in no society at all. They will be automatons, live in pain/in fear/in despair/not at all, or be Gestapo officers. But they'll be too regressed to even be able to hate their ancestors for their cowardice and hybris, so that's good.
- thr0waway1239 10y agoAssuming this article is serious, exactly how do they plan to phase out the higher denomination bills? Is it actually feasible? "Rogoff says he doesn't want to get rid of cash all at once. First, he would phase out 100s, then 50s, then 20s, leaving smaller bills in circulation for the foreseeable future. "I want to have a less-cash society, not a cashless society," he said."
- venomsnake 10y agoStop printing them. And remove them from circulation when they enter the financial system. It is easy.
- zalepa 10y agoPhasing out bills is definitely feasible. Bills usually pass through a bank fairly often, at which point they can be removed from circulation. In general banknotes have their design changed every 10-20 years, and very old banknotes are no longer legal tender (though they can sometimes be exchanged at the central bank). A regular bank won't accept a deprecated banknote. The ECB is currently phasing out 500s, first by removing those it can get its hands on from circulation, and after a few years by declaring the rest no longer legal tender.
- DashRattlesnake 10y ago> In general banknotes have their design changed every 10-20 years, and very old banknotes are no longer legal tender IIRC, the US has never declared any version of its old currency not-legal-tender, and no-one would have any problem spending any US banknote that in any way resembles the current ones in size or shape.
- nommm-nommm 10y agoI've never had problems spending very old banknotes in the US.
- monkeyprojects 10y agoI don't believe US banknotes change design that frequently. In europe bank notes change design every 5-10 years and quickly stop being legal tender a 3-5 years afterwards...
- nommm-nommm 10y agoWe had a major redesign in about... 2001ish. You still see the old notes circling around sometimes and they are still legal tender. The $100 bill was redesigned about two years ago. We have new paper notes coming out soon... https://modernmoney.treasury.gov https://modernmoney.treasury.gov.
- umanwizard 10y agoI have heard that the anti-corruption reasoning is why China's biggest note is 100 CNY (worth less than 20 USD)
- dexterdog 10y agoThat's the reason they give. The real reason is control of the masses, not the corrupt few.
- SomeStupidPoint 10y agoThe list of reasons he thinks it's a good idea reads like a list of reasons I think it's a bad idea. Strange how differently people think we should organize society, though I'm not surprised that someone so involved with the system believes that the system should be given considerably more power.
- fixxer 10y agoI've met a lot of academics that think like this. I find them terrifying in their inability to recognize adverse feedback loops. I'll keep my paper, thank you.
- adevine 10y agoReminds me of the Euro. Was blessed as such a grand simplifying project by academics and technocrats in the late 90s, and critics were often dismissed conspiracy theorists.
- digi_owl 10y agoVarious people still love the Euro. Mostly though it is those that can pack up their laptop and credit card and work from anywhere with a internet connection. Oh and the businesses trading across EU's internal borders. The crazy part is how those nations with the biggest problems right now are those that followed the Euro requirements most closely. While the biggest offender is the one swinging the punishment stick...
- digi_owl 10y agoEconomists in particular seems to have a willful blindness to feedback loops.
- pdkl95 10y ago"Understanding economics well impedes an understanding the economy." -- Yanis Varoufakis https://www.youtube.com/watch?v=L5AUAIzciLE#t=1355 https://www.youtube.com/watch?v=L5AUAIzciLE#t=1355
- Kiro 10y agoI love living in a country where cash has already been killed. Haven't seen a bill in many years.
- k__ 10y agoWhere is that?
- lumberjack 10y agoI'd guess somewhere in North Western Europe. I live in the Netherlands and here cash is rarely used. All merchants of all kinds, including the lowliest street vendors, accept debit cards with is the main form of payment medium. For buying off classifieds I usually just send the money via bank transfer.
- toomuchtodo 10y agoWhat if I want to pay for something that is legal, but I don't want a record to exist for? Prostitution is legal in the Netherlands, no?
- sneak 10y agoSpoken like someone who has never had their accounts extrajudicially frozen. How do you pay your lawyer when the state or bank decides to steal from you?
- hal9000xp 10y agoIf a government keeps monopoly on money creation and all banking system is tightly regulated by the government but at the same time there is no cash in the economy, then government have ultimate power on everybody (since they can't burn cash in your pocket but they can freeze all your bank accounts anytime) and therefore your freedom at mercy of government bureaucrats. Hard cash (and now also cryptocurrencies) is only little freedom you (still) have.
- kozak 10y agoIn some countries (like where I live) it's hard to come across US Dollar bills other than 100.
- umanwizard 10y agoWhat country is that? It matches my experience in Lebanon, but I was only there briefly as a tourist.
- kozak 10y agoI'm in Ukraine, but I guess it applies to any country without a strong own currency.
- siberianbear 10y agoI am an American living in Russia. $100 bills are the only American currency I ever see here. Unlike in the USA, where $100 bills are very rare and sometimes a hassle to actually use because some shops won't accept them or treat them suspiciously.
- venomsnake 10y agoIt ia happening in UK already. 50 GBP note is all but outlawed. You cannot get it from ATM, some note machines do not accept it, if you need bigger quantities of it it - you must fill paperwork weighting more than the notes themselves. I love the 500 eur note, and think we should move to a 1000 soon.
- tacostakohashi 10y agoIt's pretty similar in the US with $100 notes, actually - they're really not easy to come by or use for legitimate everyday purposes. ATMs don't issue them, and many shops either won't take them at all, or will take them only after quite a bit of fussing around with their counterfeit detector pen, inspecting them under UV, etc.
- monkeyprojects 10y agoThe UK has always been unique like that. A lot of it has to do with there only really being 3-5 large banks so checks were always quickly verified and cashed making avoiding large sums of cash easy. And once people get out of the habit of carrying large quantities of cash around they rarely go back to it...
- 4ad 10y ago> I love the 500 eur note, and think we should move to a 1000 soon. The 500 EUR note is being phased out: http://www.wsj.com/articles/500-euro-banknote-being-phased-out-1462381987 http://www.wsj.com/articles/500-euro-banknote-being-phased-o... Personally, I have never seen one. I only saw a 200 EUR note once, the ATM don't give then, which is a pity.
- HarryHirsch 10y agoOn the other hand, the Byzantine Empire as all cash, but the fiscus managed to keep tax evasion at reasonable levels by taxing items where they cannot be hid. The main points of taxation was real estate at village level and wholesellers at merchant fairs. Getting rid of cash would prevent tax evasion, but only for those that cannot afford tax shelters like Panama or the Double Irish with Dutch Sandwich with profit moved to the Cayman Islands.
- Senji 10y agoNext step: destroy tax shelters like Panama either through embargoes or with military action.
- DanielBMarkham 10y agoWe need to go the other way -- introduce larger-denomination bills. Assuming there was a good reason to make the highest bill $100 in 1969, calculating for inflation would allow us to have $500 bills. I'd argue for bringing back the $1000 -- and then indexing it to inflation from here on out. With negative interest rates on their way in, people and organizations are going to start stockpiling big piles of cash. The least we can do is try to make it more cost-efficient.
- adamnemecek 10y ago> Law-abiding citizens rarely have need for $100 bills, Law-abiding citizens rarely have need for Kenneth Rogoff.
- pdkl95 10y ago> Law-abiding citizens rarely have need for $100 bills That's a point of view of someone who has never lived near the poverty line or other economically problematic situations. If you deal in cash without a bank account, $100 bills, while not particularly common, are not rare either. Accusing these people of being lawbreakers simply because they have crappy jobs, are bankrupt, pay their rent in cash, etc is highly offensive (and classist). > That suggests the bills are circulating mainly in the underground economy. So what? Underground does not mean illegal. > If the biggest bill were worth $10, rather than $100, delivering someone a million bucks under the table would require a 220-pound chest rather than a 22-pound briefcase. No, it would require something like a check or money order, creative accounting, and possibly an offshore bank account or two. Bribery, laundering, and other financial crimes are not generally done with cash; they happen on the books, often through legal means. Did this "Harvard economist" miss the SCOTUS rulings that de facto legalized bribery? > Forcing people to use smaller bills, Rogoff argues, might make crime more conspicuous and less convenient. No, it merely moves many types of petty crime into barter and alternative economies. The higher-value crimes (usually) don't use cash.
- rayiner 10y ago> Did this "Harvard economist" miss the SCOTUS rulings that de facto legalized bribery? Which one was that?
- pdkl95 10y agoMcCutcheon v. Federal Election Commission http://www.scotusblog.com/2014/04/divided-court-strikes-down-campaign-contribution-caps-in-plain-english/ http://www.scotusblog.com/2014/04/divided-court-strikes-down... That's one obvious example that specifically allows bribery as long as it is not directly a quid pro quo exchange. Buying access and influence, on the other hand, was “a central feature of democracy—that constituents support candidates who share their beliefs and interests, and candidates who are elected can be expected to be responsive to those concerns.”
- rayiner 10y ago
- pmorici 10y agoFor someone who is supposed to be intelligent this proposal sounds dangerously inept. They start from the premise that only bad people use $100 bills w/o providing any evidence the claim is true. Incredibly they then use that to support their thesis that both $20, and $50 bills should be phased out as well. The assumption that a cashless society would give a central bank more control by making negative interest rates viable is also totally nuts. People would just end up buying things like precious metals, low inflation crypto currencies or anything else that emerged as a defacto store of value. In Baltimore for example there is a strong underground market for name brand laundry detergent and as a result you can barter a jug of it for drugs. http://nymag.com/news/features/tide-detergent-drugs-2013-1/ http://nymag.com/news/features/tide-detergent-drugs-2013-1/
- digi_owl 10y agoDo wonder how long it will take for some "mafia bank" to sprout...
- dade_ 10y agoThis sounds great if you are VISA or MasterCard charging a fee for every transaction. The problem with cash is that it is too hard to get 100 and 50 dollar bills. This man clearly doesn't get out. Going for dinner for 80 dollars means carrying 5 $20 bills which is a serious PITA. Groceries, fuel, lightning ear buds, all the same.
- jmnicolas 10y agoWhat's wrong with carrying 5 bills ? I regularly do.
- skylan_q 10y agoKenneth Rogoff has an interesting résumé: international grandmaster of chess So is Gary Kasparov, who doesn't even write any of his propaganda in Russian. So was Bobby Fischer, vicious anti-semite. This shows that he's great at chess. It doesn't show much else.
- mulle_nat 10y agoOr maybe it shows they are right, and you just don't get it, because your no good at chess. :)
- tomrod 10y agoTake cash away, people will just use something else for currency. https://en.wikipedia.org/wiki/Commodity_money#Aspects https://en.wikipedia.org/wiki/Commodity_money#Aspects
- madeofpalk 10y ago> Law-abiding citizens rarely have need for $100 bills What a bizarre thing to say. While I don't use them frequently, whenever I sell my stuff off, usually I'll receive $100 bills. People generally don't carry $500+ in cash, so when they go to the bank to withdraw, it'll come in $100 notes.
- mcguire 10y agoThe day before yesterday, an older gentleman in front of me at Tractor Supply paid with a hundred. As far as I know, baling twine is perfectly legal.
- wslh 10y agoSuppressing cash means much less privacy and more state control. Full stop.
- binarray2000 10y agoIs that the same Kenneth Rogoff who co-authored a study about "Growth in a Time of Debt" which turned out to be full of faked data? And, curiously, EU/ECB/MMF (the infamous "Troika") and, most prominently, Germany based their "austerity" measures towards South European countries on that very study - which practically and conveniently provided the alibi for their crimes. "Curiously" only the first sight: This guy is a member of the "Group of Thirty", a group "founded in 1978 by Geoffrey Bell at the initiative of the Rockefeller Foundation" and supported (http://group30.org/about/supporters http://group30.org/about/supporters) by the very profiteers of austerity. And now he writes about "The Curse of Cash". Should we believe him this time as well? Do we really know, who's interests he's serving?
- Sir_Cmpwn 10y ago>interest rates into negative territory. That's the strange world where you pay to keep money in the bank and get paid to borrow it. Wow, fuck that. I've already reduced my credit card usage to near zero for privacy-related reasons, but I still use a bank to store my funds. I'll definitely be among those switching exclusively to cash if this sort of thing comes to pass.
- 4ad 10y agoSerious question: where do you store your cash? I am privacy conscious myself, and I am evaluating a cash-only life, but where do you keep all the cash? Still at the bank?
- Sir_Cmpwn 10y agoI have $XXXX in my safe and $XX-XXX in my wallet most of the time. I periodically top up at an ATM, gas stations near me have 0-fee ATMs.
- fithisux 10y agoAnd convert it to what? Cash?
- norea-armozel 10y agoWell the only reason why cash exists at all today is because banking is a mess. Especially if you're poor. So banning cash isn't going to help the poor at all as others have noted. Wake me up when the same Harvard economists get off their butts and make a standard that will make banking for the poor as easy as it is for the rich. Until then, I'm all for cash.