Cash – the last refuge of scoundrels and little old ladies?
There are many aspects of modern life that cause us to stop and think. Wildfires, electric cars, low-emission zones, not to mention the impact drones are having on modern warfare.
Other changes have quietly slipped under the radar, to the point that the young take them for granted and even older generations quietly acquiesce in them, or embrace them without much thought as to their implications until they bite them on the backside.
Take air traffic control, for example. The travelling public take for granted that thousands of flight plans are automatically filed every day into air traffic control systems worldwide. When that system fails, as happened in the UK last week, chaos reigns. Flights are delayed or cancelled. Holidays are ruined. Thousands of work days are wiped out because people can’t get back to work on time.
A few hundred thousand disrupted journeys is one thing. But what if card payment systems went down simultaneously? Suddenly payments grind to a halt. And what if nobody can get hold of cash because the ATM systems aren’t working?
It’s at that point that our fallback in such circumstances – for many people – no longer exists. We don’t do cash anymore.
Right now, in the first world at least, it seems that anyone with more than a few pounds, dollars or euros in their wallet is seen as something of a dinosaur. They’re the modern equivalent of the old peasant who keeps stashes of banknotes under their mattresses. If you splash the cash, you risk being perceived as a tax dodger, a payer of bribes, a money launderer or an oligarch who wishes to hide – or advertise- their wealth.
Cash is dodgy. Even shops don’t take it any more because it lessens their chances of being robbed. In fact it’s fair to say that bureaucrats – especially tax collectors and law enforcement – have never like cash because it enables the black economy, unless they themselves happen to be on the take, of course. So from their point of view, the decline of banknotes is manna from heaven. They now have the pleasure of following the money from their desktops, even if crypto transactions make their task more challenging.
So basically we’ve all been seduced by the ease of electronic transactions. For small payments you just wave your card over a little machine and pling!, it’s done. Here in France, in the markets, typically populated, you might think, by canny stallholders who love cash because no tax inspector is able to prove how many aubergines they’ve grown and sold, a good 50% of traders take cards.
I worry that we take our little cards for granted. So far, in the first world at least, there’s been little adverse effect except on the marginalised in societies – the elderly who find it difficult to use the technology and those who for one reason or another can’t get bank accounts. But in some countries, complacency leads to disaster. Lebanon, for example, where the country’s economic meltdown has led to banks restricting the amount of available cash, with the result that some desperate account holders have resorted to holding up their banks with guns.
True, the British government requires the banks to ensure that nobody is further than three miles from a source of cash, be that an ATM, a bank branch (a rare thing these days) or a post office. Which is fine, I guess, provided there are enough old folk with the energy to walk three miles to draw their precious notes.
All that being said, I’m personally a fan of cash, not only as an important fallback for when the cards don’t work, but because I was brought up in an age when cash and cheques were standard payment methods. I’ve lost count of the amount of times I’ve been slapped down for automatically reaching for the readies when a card will bring precious air miles. But I’m mindful of the fact that banknotes are no less a construct than the digits in an online bank statement. If there’s anyone still alive in Germany who’s old enough to remember the hyperinflation crisis of 1923, during which millions lost their savings and resorted to having to take wheelbarrows full of banknotes to the bakers to buy a loaf of bread, they would perhaps let out a hollow laugh at their British friends describing their money as “safe as the Bank of England”.
After all, cash is merely one pillar of a massive, complex and interrelated global financial system. When one or more pillar collapses, what guarantee is there that those crisp banknotes will still have a role to play? In which case, it might be sensible to start thinking what a barter economy might look like. Perhaps we should be working out what we have to offer in exchange for a bag of potatoes.
What could I offer? Not a lot really, though I am thinking seriously about giving over the garden to the cultivation of cabbages. Or maybe some kind of herbal pacifier. After all, most of us will need to calm down a bit if the worst comes to the worst.
Meanwhile, given the way inflation’s going (in the UK at least) perhaps it’s time to give the wheelbarrow a service, because I don’t think your friendly local baker will be inclined to accept bitcoins for their precious product.