Why cash is still king

The Melbourne bar, like most Melbourne bars, was accessed by a secret laneway with the door hidden behind a dumpster; and, like most Melbourne bars, it was done in a style combining Tiki retro and a nostalgic revival of Ceausescu’s Romania.

“We don’t take cash,” said the owner, after I proffered a note for the Norfolk Island gins we’d drunk out of watering cans.

“Hang on, I thought you didn’t take cards.”‘

“Ha, we used to. Now we don’t take cash.”

So it goes. Cash payments have been declining in Australia, as everywhere, for more than a decade, but card/app only places have been slower to expand. It is hipster-led here: cafes; bars; and, god help us, the Astor cinema (retro central).

Indeed, in Australia, it seems to be retro places at the very forefront of this, often switching direct from cash-only to no-cash, which is odd. Cash-only was always part of the appeal of these places. It had the intimate and material feel of exchange — even with the hideous plastic polymer notes. Success for my campaign to reintroduce paper notes is further off than ever, and I now hold out no hope for the reintroduction of Australian sterling.

Cash is going slowly here, but fast elsewhere. Some countries and areas have tried partial demonetisation — India withdrew its two largest notes from circulation, with no great effect but chaos — and the EU withdrew its €500 note, the sole purpose of which appeared to be women-trafficking by track-suited Eastern Europeans, judging by several documentaries (Taken, T2ken, Tak3n and where’s Ta4en? Come on).

But it’s Sweden that has really forged ahead with the elimination of cash. There, the numbers report that cash usage is down to 13% in major cities, and thousands of shops and cafes no longer accept it (the number is more like 70% in the US; and in Australia, 30% for transactions under $10,000, not the most useful stat). Most bank branches in Sweden — the few that remain — don’t actually handle cash. And selected branches of IKEA and department-store chain Ahlens have eliminated cash entirely.

There has been no great public push by the Swedish government for this change, though of course it has major advantages in dealing with tax evasion. Both they and Swedish banks have been caught off guard by the rush to cashlessness, and the active popular enthusiasm for the trend. There is even a “cash abolition” movement fronted by Bjorn from ABBA, spurred on by the fact that his son’s apartment was robbed once, and cash taken.

The rush to cashlessness in Sweden is not out of mere convenience. It’s part of Swedes’ active belief in centralisation and rationalisation; ultimately in the idea that trust in central authority is an expression of virtue, a byproduct of its long social-democratic history. But that in turn appears to be spurring on the world, to rush forward to cashlessness. And this raises concerns not only for those over 70 — many (not all) too old to have fully embraced (or internalised) digital life — but also the socially excluded, the independent-living intellectually disabled, and other groups.

Furthermore, there’s the worry about cutting a society off entirely from a form of material exchange, and relying on digital records. Given the ease with which financial records in their tens of millions are hacked, it wouldn’t be impossible to take down a whole national financial system.

But above and beyond all that, there’s the crucial link between cash — utterly impersonal — and a basic form of freedom. Simply put, there should always be a way to be untraceable to some degree in contemporary society, and the existence of cash money is crucial to that. I should be able to create a gap between a withdrawal — which can be traced — and a purchase. Quite possibly that might involve buying an anonymous payment card to use in “no-cash” outlets, but the cash gap is crucial.

Why should I want to do that? Well that’s not a pertinent question where individual freedoms are concerned. It’s simply enough that I should want to do that, and it should be possible to do so. There may be specific wants that can be banned — e.g. buying large quantities of strychnine, which has non-criminal uses — because of the probable nature of their criminal use. But a general practice (which may sometimes have criminal uses) is quite a different thing.

Money is the means of life, as things stand. To be untraceable in everyday life is a necessary separation between the public sphere and the state. Ideally, the state would enforce universal cash acceptance for businesses; but that has never been the law, and there’s no chance of adopting it now (however, if you do take cash, the law sets ceilings on acceptance of coin payments, i.e. more than $5 of 5c coins isn’t legal tender. Fun fact: 1c and 2c coins are still legal tender; they’re simply not in circulation).

Beyond the specific question of cash and individual freedom, there’s a wider question of a form of subsidiarity: retaining multiple layers of action and communication in a techno-society where much could be abolished in a stroke. We are most likely going to need cash, and a lot more basic things, in what is to come.