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A cashless society could curb criminals – but also our freedom

Thomas Eisenhuth/DPA/PA Images

Thomas Eisenhuth/DPA/PA Images

April 9, 2018   3 mins

It used to be the case that the only people who never carried cash were the very poor (with no cash to carry) or the very rich (with staff to handle such vulgarities on their behalf).

Now, thanks to electronic forms of payment, it’s increasingly easy for the rest of us to go cash free.

According to a 2014 article on the UK Fundraising website, one third of all Britons say they never carry cash (a problem for charity fundraisers). Since then we’ve seen an expansion of electronic payment technologies – in particular contactless card payments, making cashlessness easier than ever.

Could we end up abolishing cash altogether? It’s a very real possibility, according an intriguing article by George Eaton for the New Statesman. He reveals that when David Cameron was Prime minister, the UK government was considering just such a plan:

“In the summer of 2015, as David Cameron cast around for ideas for his Conservative conference speech, an ambitious proposal caught his eye: a cashless economy. Former No 10 aide Daniel Korski, who developed the policy, suggested setting a target of eliminating hard currency in Britain by 2020.

“The prime minister eventually said, ‘I like this but I don’t think it’s for conference,’” Korski, now the chief executive of Public, a venture capital firm, recalled when we spoke. “But the real resistance was the Treasury and the then chancellor [George Osborne]. There was real concern about where this would go politically.”

Of course, having lost the Brexit referendum, Messrs Cameron and Osborne are not in a position to abolish anything. And, given this context, it would be odd if their successors scrapped the Pound (if only in physical form).

Eaton suggests that it might be Sweden that becomes the first country to go cashless. In the UK “cash accounts for only 3.9 percent of payments by value”, which is pretty cashless by international standards – until, that is, you consider the Swedes:

“Cash transactions account for only 1.4 per cent of the value of all payments and the country is forecast to become cashless by 2030. Market traders, churches and homeless magazine vendors all accept card and phone payments. More than 900 of Sweden’s 1,600 bank branches no longer take cash deposits.”

Of course, Sweden only has this option because it wisely kept out of the single currency. Eaton tells us that within the Eurozone cash accounts for 10.4 per cent of payments – and so, as things stand, it’s difficult to see all the member states agreeing to abolish the physical currency. A particular obstacle would be the Germans, who are famously fond of the folding stuff. It was they who insisted on the €500 note – which facilitates large cash purchases, but also, it is alleged, organised crime.

Then again, cash in general facilitates crime:

“In his 2016 book, The Curse of Cash, the Harvard economist Kenneth Rogoff disparages paper currency for aiding tax evasion, theft, corruption, terrorism, the drugs trade, human trafficking and the rest of a burgeoning black economy. Though a digital system creates new forms of crime, illegal activity becomes easier to trace.”

This is one of the best arguments for abolishing cash; but what else might government try to control if it had a digital grip on the use of money? Writing on the same subject for CapX, Tim Worstall has nightmares:

“…what do we think would happen with just the one government-approved payment system? Those not approved of by government would not be able to access it. Perhaps paying for sex and illegal drugs isn’t one of the things we’d go to the barricades for, but… much effort would be applied to having ever more disapproved-of transactions added to the verboeten list. Public Health England might want to add sweeties, soda pops and lunches over 600 calories, and someone would certainly try to ban cigarettes from the payment system, and so on. It would be a giant kick-me target pinned to the back of the payment system for every crank with a ban to promote.”

The fear that control of the means of exchange could be used to control all human activity goes back a long way. For instance, the Book of Revelation prophecies an apocalyptic scenario in which no one can “buy or sell unless they [have] the mark, which is the name of the beast.”

If that isn’t a warning against the total centralisation of economic power, I don’t know what is.


Peter Franklin is Associate Editor of UnHerd. He was previously a policy advisor and speechwriter on environmental and social issues.


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