I’m not an economist, because I’m a nobody. Thus, my experience in trained economics is a zero. As a human being, I do have opinions. By staying informed with everyday experiences, I do form opinions on facts that, I think, are real. From these opinions and ideas, I can draw some non-expert conclusions. In fact, right now I like to talk about one or two conclusions I have about a cashless society.
I think a cashless society is wonderful for governments, bankers, and whatever associations have control over society because electronic traces are available 24/7. What is scarier is that anybody in a position of power or any hacker who has enough knowledge can just shut you out of a cashless society by changing your electronic numbers. This is very real, because without any cash on hand, your only option is to rely on the credit system and other electronic monetary forms. When such a system cuts you out, you are basically helpless and powerless, and cashless. In such a situation, surviving becomes impossible!
A cashless society can also be wonderful for you, but as long as the illusion of real efforts and real transactions are actually taking place. I think bankers can just enter any number of money into a bank account for just about anybody, and the money will form instantly by electronic means. You could say money seems to be appearing out of thin air! Growing on the tree, or however, you want to phrase this illusion. I think a cashless society will enhance this ability over an infinite time. What do I mean by an infinite time more? A cashless society won’t use cash, because cash cannot be legal. Thus, a cashless society is all about electronic, monetary numbers, and anybody who has the authorization to form these numbers can just make them out of nothing. Or they can just delete these numbers whenever!
What makes a cashless society humming brilliantly is the illusion of convincing people that real efforts and transactions are actually taking place. Let’s say a doctor who got paid very well by treating his patients in an exemplary manner would probably quit his job if the bank could instantly form any amount of money, into infinity, without any effort. Why even bother to go to work when you can just go to the bank for an easy loan, and the bank won’t care if you can pay the money back or not since the bank can form an infinite amount of credits? In a cashless society, if the bank isn’t going to lend you any credit, you have to acquire this credit by working for a job or doing whatever to acquire more credit. But will you be working with a happy smile on your face knowing the bank can form any amount of credits out of thin air? The demand and supply formula won’t be a good gauge anymore in a cashless society, because an unlimited amount of credits can flood the system forever.
Even better, why don’t you just form a bank where you, yourself, can electronically form an infinite amount of credits? Wouldn’t this make you an infinite air? Why would you bother with taking out someone else’s trashes and problems for a wage/fee when you can just hallucinate yourself with infinite credits from your own bank? If everyone is into this, then the system got a problem. The problem is not lacking of credits or money, but the problem is about — nothing will ever get done. Because nobody will give any real effort in any exchange since credit is created out of thin air without any real effort. This means the producers see no reason to produce products because the infinite bank is giving out easy credits freely. Basically, why produce when you can obtain free credits, right? Without producers in the equation, the consumers won’t have anything real to consume. The whole economic system would become meaningless, and so the system collapses.
I guess the only real demand for a cashless society is the demand for more credits, and the easy credits are plentifully available so the demand for more credits could be fulfilled. Of course, the government and the powerful bankers can just create laws that make the illusion works for a while. An example would be you have to pay back the loan you want to borrow, or else you may suffer the consequence of being shut out of the cashless society system. Knowing being shut out means you are not going to be able to buy the most necessities such as food, and so you know you’re doomed for good.
Nonetheless, in a cashless society — a shutout mandate or whatever rules a cashless society wants to impose on the people — the atmosphere can become very toxic for the powerful people. How come? If a society can only get poorer while the banks have an unlimited amount of credit, the poor people will see this as the greatest injustice of all time. This means if there is a large number of poor people who are thinking this way will have a king’s head roll. Thus, a cashless society needs to uphold not only the illusion of real efforts and transactions but also needs to uphold income equality for the whole society. As long the majority (e.g., 65%, 75%, or 80% of the general population) is wealthier than a small percentage of the whole population, then nobody would be able to form a big enough movement to have a king’s head rolls.
If you’ve read thus far, I think you would probably have a notion that a cashless society is the same thing as the credit society we’re living in today. I would agree, but a cashless society is more draconian since it outlaws tangible cash. With cash in the equation, people can still feel that transactions are real, because something gets sold something gets paid with hard, cold cash (i.e., it’s real). Even with cash in the system, it’s all about maintaining the illusion that credits are properly distributed. Taking the cash out of the current credit system to make a completely cashless society, the illusion of proper distribution and exchange will be harder to uphold when the going gets really tough. A few good examples would be unemployment going skyrocketing, income inequality going skyrocketing, debts going skyrocketing, and so forth.
Of course, you can argue, when the going gets really tough, with cash in the economic system or not, the whole bubble is going to pop and a king’s head rolls anyway. Nonetheless, with cash in the system, at least new problems of a cashless society won’t be introduced to the general population. Once a cashless society is in place, some traditional problems plus new problems are going to continuously rain down on the whole society, especially when people can be cut off from the system altogether since only credit-like means are acceptable and real.
A cashless society would definitely help the controllers to see the nuts and bolts of the whole system more clearly because electronic transactions are going to leave electronic traces behind. Nonetheless, in bad times, this would aggravate people rather easily, because they feel their privacy is being invaded all the time. When it comes to money, privacy matters!
I think people won’t mind sharing who they’re having sex with, but when it comes down to money people are not that willing to share. Thus, money is rather private! So, a cashless society is going to have a problem with allowing people to have some privacy with their money. For example, if everything is so connected in the cashless society, everyone would know how many credits they have available. This would mean your local pizza parlor would refuse you a slice of pizza for they know your whole worth is zero or negative credit. In a cash society, you can just hand over the cash, the local pizza parlor would care less if you have any credit, and off you go with a delicious slice of pizza. In a cashless society, your shame would be revealed instantly. Even worse, you will not be able to fill up your stomach when nobody is going to accept cash. After all, it’s a cashless society!
In summary, I think a cashless society can make bad economics worse because new problems would be introduced to the general population. These problems may become apparent rather quickly when the economy goes bad. An example would be people may become less cooperative in making a living, because there are fewer incentives to encourage people to earn money the hard way. People may try to scheme the infinite credit/cashless society to make money the easy way, and economic bubbles would form into gigantic ones till they burst and collapse the economic system altogether. Instead of really solving the problems of society such as poverty and whatnot, a cashless society can only enhance the paranoia of lacking privacy. Money is a very private matter to many people, and so these people are not going to be very happy about having to live in a cashless society when every known businesses and service out there know how much you are worth 24/7. At least with cash, people can hide their shame of having less worth. Basically, any society with a lot of insecurity can collapse, and so the same goes for a cashless society.