Mass surveillance in a cashless economy: freedom & privacy at risk

In the recent years of the struggle against cash, proponents of a cashless society, usually associated with absolute state control, have argued that a world without cash would be a counter-balance to governmental power, not an increase of its control. Cash defenders beg to differ.

In modern, wealthy and developed countries in general, and in the West in particular, the levels of power of the State have become a source of worry for many citizens. Modern governments now have the ability to track electronic communications, intercept transactions and monitor movements for every citizen within their population - which leads to concerns regarding the future of civil liberties within societies.
The post Snowden era saw the proportion of Americans fearing the government intruding into their private lives reach majority, with an estimated 53% deeming it a threat, and 70% considering the State abused its authority, using excuses such as anti-terrorism, to increase its powers. For some, in the debate of whether or not to keep cash in the future, killing off hard currency would not only be a key to a fairer, less violent, and more egalitarian way of living, but would also be a limit to the State’s power. Indeed, while the State and its central bank are in charge of the main decision-making regarding currency - how much to print, when to change the design, how much to store and release into the economy - much of the money’s management is left to the private sector. Eric Cheng, from the Federal Reserve Bank, says Cash dispensers, smart-safes, and recyclers have provided banks, armored carriers, and merchants with new opportunities to automate and improve the process for handling cash. Dispensers and recyclers have helped banks and credit unions reshape their branches towards a sale and service business model, rather than a transactions processing model.” Private banks hold and distribute most of the cash, and financial solution companies come up every month with new ways for dealing with money. Dematerialization and decentralization (and thus privatization) of means of payment are therefore a line of defense, cash opponents claim, against monopoly of governments.
But cash-defenders see many holes in the argument. The first is that while some of the organizations which manage cash are indeed technically part of the private sector, they are so deeply embedded within the established and tightly controlled by government agencies that one could hardly consider them counter-powers to State power. Investigators today have no difficulty whatsoever issuing a subpoena to a private company in order to access financial details regarding an operation, and the recipient organizations wouldn’t dare refuse to issue the information. Laura Poitras, from the Spiegel , reveals: “The NSA monitors banks and credit card transactions -- sometimes in apparent violation of national laws and global regulations. The European SWIFT financial transaction network is being tapped on different levels, internal documents from the US spy agency show.” Paypal, Skrill and CurrencyFair may be private organizations, any money stored within those vehicles is visible to - and therefore monitored by - State authorities.
Cash defenders have seen recent pushes against physical currency as examples of how State control over money can be counterproductive. Australia, in its long war on cash which started years ago with banks becoming cashless, has attempted to expand its public policies through the demonetization process. Melissa Davey, from the Guardian, reports on the Australian program to issue benefits to aboriginal Australians through a welfare card rather than cash, and how the program backfired: “One of the four Aboriginal leaders who supported the government’s cashless welfare card trial in Western Australia says he feels “used” by the human services minister and he no longer supports the card [...] He told Guardian Australia on Wednesday he was ready to publicly state the card had not addressed issues of alcoholism and violence in his community as he was led to believe.”  ABC News Australia, covering the crisis, comments: “It's absurd that governments say they want to reduce welfare "dependency", yet at the same time actively encourage such dependency by taking freedom of choice away from welfare recipients. And instead of encouraging "financial literacy", income management appears to reduce it - by treating welfare recipients as incapable and incompetent.”
As an expanded illustration of the dangers of increased State control, civil liberties watchdogs name some of the most cashless countries in the world as those with poor human rights records and democratic reputation: Iran, Nigeria, Russia, China, for instance. Countries which have had to endure dictatorships, and have recovered, are more likely to be cautious with the power they give their governments over the lives, such as Germany. Germany keeps its place as favored sociological example, by cash-defenders, of why a cashless society should be feared. Actually, Germany stands out as one of the staunchest cash-users. While the average German will shrug and simply say it’s simpler to keep track of expenses, some experts claim this attachment to currency goes back to German traumatic experience of the Reich, when the population was completely under the power of the State, namely through financial control.
According to cashless-society opponents, it hardly matters whether the control comes from a private or public organization: it’s still control. The difference matters even less when it is known that private companies will obediently inform public ones of whatever it is they wish, for fear of losing their operating licenses. Regardless of technological developments and payment-method variety, the only truly private transaction, in which no third party (public or private) has a prying eye, is cash. With the Internet of things, everything is digital, and therefore registered: telephone calls, transactions, online communications, and social media activity. Cash remains the only economic medium to guarantee complete privacy and protection from governmental abuse.

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The cashless society from an ethical point of view

The debate about the move towards a cashless society has been at the center of the scene for several years, now. Various angles have been taken by economists, politicians, banking institutions and sociologists. Beyond the technicalities of the debate, lies the question of freedom, of inter-citizen solidarity and of governmental responsibility. The debate cannot remain in the hands of financial specialists, it is first and foremost an ethical, political and societal issue.

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