Thursday, July 10, 2014


Fight the powers that be.
Over at The Automatic Earth, a blogger named Raul Ilargi Meijer has a piece titled "The Future of Banking Is Pay Cash Only," in which he riffs off a Wall Street Journal column (Note: paywall) by Morgan Stanley CEO James Gorman. 

Mostly, Meijer grumbles about big banks' ever-growing clout and about Gorman's warped vision of our Brave New Banking World. And fair enough, banks are too powerful and Gorman's vision is warped. But at the end, Meijer says this: 
If and or when all our financial transactions are electronic – excuse me, digital - they’re all traceable too. Is that what we want? For many of us, I’m sure, it’s not. Which means that at some point someone will be smart and driven enough to start a “campaign” calling upon people everywhere to pay cash as much as they can. Most stores still accept cash, though perhaps not in all aisles. Dollars and euros and zloty’s and what not are still legal tender. There are plenty businesses, second hand cars etc., that accept only cash.
We find it comfy and easy to pay with plastic. But the more we do that, the more the power and wealth of the Mr. Gorman’s of this world increases. Literally at our cost, don’t forget that. And the power of the NSA and related global “services” increases at the same time, they can trace our whereabouts and purchases. 
In a certain limited way, I suppose the suggestion makes sense. There's a reason most dope dealers don't take Visa. But seriously, do you really think bankers gain an edge when they discover you paid $26.99 for a pair of pants at JC Penny? Of course not. They couldn't care less. Rather, banks' power comes from defining what $26.99 is. How much purchasing power it represents, and how that compares to its value yesterday and tomorrow, how many yen or dinar it buys. That's what gives them their mojo.  

Decades before bonus points, APRs and minimum monthly payments, J.P. Morgan had no difficulty turning a big chunk of the U.S. economy into a wholly owned subsidiary of Wall Street. Looking at the other end of the power spectrum, ordinary Germans in the 1920s and ordinary Zimbabweans in the 1980s had abundant opportunity to strike a blow against The Man by paying cash. From what I can tell, it didn't help.

Money, as the best Onion article ever points out, is just a symbolic, mutually shared illusion. It does not matter whether that illusion is embodied in shiny pieces of stamped metal, pieces of paper with dead presidents on them, or bits and bytes on a hard drive somewhere. What matters is who sets the rules for the illusion, who decides on interest rates, lending standards, bank capitalization, money supply and so on. 

I can sort of understand why someone might think gold is the "really real" money - it's shiny and heavy and looks valuable and all - but c'mon, cash? Meijer is arguing that the use of fiat paper returns power to the people. That's like saying you're president because you own a flag.

1 comment:

  1. I suspect Ilargi (as he goes by) is saying, as he's said previously (I've been a fan of his stuff for years): You're better off disconnecting from the system. The system is corrupt; the system is designed to drag you down, to enslave you financially (and ultimately, beyond that).

    I do think the future, for those who don't want to go along simply to get along, is analogue. The ability to remain off the (surveillance) grid; the idea that in the future, truly subversive ideas may only be safely transmitted via pen and paper, rather than e-mail or text or Tweet, all of which can be more easily tracked. Take $50 out of the ATM and spent it on what you will, and "the system" can only know, at this point, that you withdrew $50. And/but the system will require knowledge of what you did with the money. For the sake of safety and security, of course. Because terrorists! So I'd expect that even the cash option in the future will be constrained - "for our own good."