Brett Scott on Sun, 21 Aug 2016 22:14:39 +0200 (CEST)

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<nettime> Preparing for the War on Cash

   Hi Nettime, I've just published a big article on The War on Cash and
   the rise of the digital payments panopticon. If you want the original
   article with links, you can find it here
   [1] although the piece
   hit the front page of Hacker News and the site went down, so not sure
   if it's accessible. I've pasted the text below

   Cheers, Brett


   Several months ago I stayed in an offbeat Amsterdam hotel that brewed
   its own beer but refused to accept cash for it. Instead, they forced me
   to use the Visa payment card network to get my UK bank to transfer EUR4
   to their Dutch bank via the elaborate international correspondent
   banking system.
   I was there with civil liberties campaigner Ben Hayes. We were
   irritated by the anti-cash policy, something the hotel staff took for
   annoyance at the international payments charges we'd face. That wasn't
   it though. Our concern was an intuitive one about a potential future
   world in which we'd have to report our every economic move to a bank,
   and the effect this could have on marginalised people.
   'Cashless society' is a euphemism for the
   "ask-your-banks-for-permission-to-pay society". Rather than an exchange
   occurring directly between the hotel and me, it takes the form of a
   "have your people talk to my people" affair. Various intermediaries
   message one another to arrange an exchange between our respective
   banks. That may be a convenient option, but in a cashless society it
   would no longer be an option at all. You'd have no choice but to
   conform to the intermediaries' automated bureaucracy, giving them a lot
   of power, and a lot of data about the microtexture of your economic
   Our concerns are unfashionable. Without any explicit declaration, the
   War on Cash has begun. Proponents of digital payment systems are riding
   upon technology-friendly times to proclaim the imminent Death of Cash.
   Sweden leads in the drive to reach this state, but the UK is edging
   that way too. London buses stopped accepting cash in 2014, but do
   accept MasterCard and Visa contactless payment cards.
   Every cash transaction you make is one that a payments intermediary
   like Visa takes no fee from, so it has an interest in making cash
   appear redundant, deviant and criminal. That's why, in 2016, Visa
   Europe launched its "Cashfree and Proud" campaign, to inform
   cardholders that "they can make a Visa contactless payment with
   confidence and feel liberated from the need to carry cash."
   The company's press release declared the campaign "the latest step of
   Visa UK's long term strategy to make cash 'peculiar' by 2020."
   There you have it. An orchestrated strategy to make us feel weird about
   cash. Propaganda is a key weapon of war, and all sides present
   themselves as liberators. Visa comes across like a paternalistic
   commander when assuring us that we - like a baby taking first steps -
   will feel a sense of achievement at liberating ourselves from the
   burden of cash dependence. Visa's technology offers freedom without
   dependence or dangers.
   Visa is joined by other propagandists. In 2014 Penny for London
   arrived, an apparently altruistic group set up by the Mayor's Fund for
   London and Barclaycard, using charity as a hook to switch people to
   contactless cards on the London Underground. PayPal plastered cities
   with billboards claiming that "new money doesn't need a wallet", along
   with a video proclaiming: "New money isn't paper, it's progress".
   Astroturfing campaigns like No Cash Day are backed by American Express,
   highlighting such anti-cash themes as the environmental impact of
   banknotes. Other tactics include pointing out that criminals use cash,
   that it fuels the shadow economy, that it's unsafe, and that it
   facilitates tax evasion.
   These arguments have notable shortcomings. Criminals use many things
   that we keep - like cars - and fighting crime doesn't take priority
   over maintaining other social goods like civil liberties. The 'shadow
   economy' is a derogatory term used by elites to describe the economic
   activities of people they neither understand nor care about. As for
   safety, having your wallet cash stolen pales in comparison to having
   your savings obliterated in a digital account hack. And if you care
   about tax justice, start with the mass corporate tax avoidance
   facilitated by the formal banking sector.
   The peculiar feature about this war, however, is that only one side is
   fighting. Very few media champions defend cash. It is like a
   taken-for-granted public utility, whereas digital payments platforms
   are run by private companies with an incentive to flood the media with
   their key messages. When they fight this war, their target is our
   cultural belief in cash, and the belief that its provision should be a
   public right.
   The UK government does not plan to maintain that right, and is siding
   with the payments industry. Their position is summed up by economist
   Kenneth Rogoff in his new book The Curse of Cash. He argues that, apart
   from facilitating crime and tax evasion, cash hampers central banks
   from setting negative interest rates. In the absence of cash, everyone
   must keep their money in the form of digital bank deposits. During
   recessions central banks could then use the banking system to
   deliberately corrode people's deposits via negative charges,
   'inspiring' them to spend rather than hoard.
   The emergent consensus among economic and political elites is that this
   is the direction to go in, but to manufacture consent for this requires
   a drip-drip erosion of public resistance. Hearts and minds must be
   shown that the change represents inevitable and desirable progress.
   Anyone defending cash in this context will be labelled as an
   anti-progress, reactionary, and nostalgic Luddite. That's why we must
   not defend cash. Rather, we should focus on pointing out that the Death
   of Cash means the Rise of Something Else. We are fighting a broader
   battle to maintain alternatives to the growing digital panopticon that
   is emerging all around us.
   To understand this conflict, we must step back. A monetary transaction
   involves specific goods or services being exchanged for tokens giving
   access to general goods and services from others. The pub landlord
   hands me beer at night if I transfer tokens that allow him to get
   cigarettes from a shopkeeper in the morning.
   There are two ways to implement this though.
   The first is to give the tokens a physical form. In this scenario,
   'getting rich' means accumulating those physical things and 'making a
   payment' means handing them over to someone else. They are bearer
   instruments, which means nobody keeps a record of who owns them.
   Rather, whoever holds them owns them. This is your wallet with notes in
   it. This is cash.
   Alternatively, you can use a ledger. Someone sets up a database with
   spaces allotted to different people. This is then used to keep a record
   of who has tokens. These tokens have no physical form, but are written
   into existence. They are 'data objects', and they are 'moved around' by
   editing the record. The keeper of the ledger thus maintains an account
   of what money is attributable to you, 'keeping score' of it for you. In
   this system, 'getting rich' means accumulating a high score on your
   account. 'Making a payment' involves identifying yourself to the keeper
   of the ledger via a communications system, and requesting that they
   edit your account, and the account of whoever you are paying.
   Does this sounds familiar? It is your bank account.
   Old banks used actual books to maintain these account ledgers, but
   modern banks use digital databases housed in huge datacentres. You then
   interact with them via your internet banking portal, your phone app, or
   by going into a branch. This is not a minor part of the monetary
   system. Over 90 per cent of the UK's money supply exists nowhere but on
   bank databases.
   It is upon this underlying infrastructure that payment card companies
   like Visa build their operations. They deal with situations in which
   someone with one bank account finds themselves in a shop owned by
   someone else with another bank account. Rather than the pub landlord
   giving me his bank details for a manual transfer, my card sends
   messages through Visa's network to automatically arrange the editing of
   our respective accounts.
   Many fintech - financial technology - startups specialise in finding
   ways to augment, gamify or streamline elements of this underlying
   infrastructure. Thus, I might use a mobile phone fingerprint reader to
   authorise changes to the bank databases. Much fintech 'disruption'
   merely involves putting slicker clothes on the same old emperor.
   The use of high-speed communications systems to rearrange binary code
   information about who has what money might be new, but ledger money is
   as old as any bearer form. The Rai stones of the island of Yap were
   huge and largely unmovable stones that, while seeming like physical
   tokens, were a form of ledger money. Rather than being physically moved
   - like cash would - a record of who owned the stones was kept in
   people's heads, stored in their communal memory. If the owners wished
   to 'transfer' a stone to another, they 'edited the ledger' of who
   possessed the tokens by merely informing the community. Why physically
   roll the stone if you can just get everyone to remember that it has
   'moved' to somebody else? The main reason that we struggle to recognise
   this as a form of cashlessness is that the ledger is invisible and
   Cashless society, though, is presented as futuristic progress rather
   than past history, a fashionable motif of futurists, entrepreneurs and
   innovation gurus. Nevertheless, while there are real trends in
   behaviour and tastes to be spotted in society, there are also trends in
   behaviour and taste among trend-spotters. They are paid to fixate upon
   change and so have an incentive to hype minor shifts into 'end of
   history' deaths, births and revolutions. Innovation communities are
   always at risk of losing touch within an echo chamber of buzzwords,
   amplifying one another's speculations into concrete future certainties.
   These prediction factories always produce the same two unprovable
   sentences: "In the future we will... " and "In the future we will no
   longer... ". Thus, in the future we will all use digital payments. In
   the future we will no longer use cash.
   This is the utopia presented by the growing digital payments industry,
   which wishes to turn the perpetual mirage of cashless society into a
   self-fulfilling prophecy. Indeed, a key trick to promoting your
   interests is to speak of them as obvious inevitabilities that are
   already under way. It makes others feel silly for not recognising the
   apparently obvious change.
   To create a trend you should also present it as something that other
   people demand. A sentence like "All over the world, people are
   switching to digital payments" is not there to describe what other
   people want. It's there to tell you what you should want by making you
   feel out of sync with them. Here's fintech investor Rich Ricci invoking
   the spectre of millennials, with their strange moral power to define
   the future. They are repulsed by the revolting physicality of cash, and
   feel all warm towards fintech gadgets. But these are not, on the whole,
   real people. They are a weapon in the arsenal of marketing departments
   used to make older people feel prehistoric. We're not pushing this.
   We're just responding to what the new generation demands.
   And so we get Visa's Cashfree and Proud campaign. If people really were
   ashamed of cash, they wouldn't need ads to tell them. Visa must
   engineer that shame to teach you that what you want is the same as what
   they want. And if you don't want it, just remember that cashless
   society is inevitable. Don't get left behind.
   But this system will leave many behind. It is hardwired to include only
   those with access to a bank account; and bank accounts are hosted by
   profit-seeking corporations that operate at scale. They have no time
   for your individual idiosyncrasies. They cannot make profit off anyone
   who cannot easily be categorised and modelled on a spreadsheet.
   So, good luck to you if you find yourself with only sporadic
   appearances in the official books of state, if you are a rural migrant
   without a recorded birthdate, identifiable parents, or an ID number.
   Sorry if you lack markers of stability, if you are a rogue traveller
   without permanent address, phone number or email. Apologies if you have
   no symbols of status, if you're an informal economy hustler with no
   assets and low, inconsistent income. Condolences if you have no
   official stamps of approval from gatekeeper bodies, like university
   certificates or records of employment at a formal company. Goodbye if
   you have a poor record of engagements with recognised institutions,
   like a criminal record or a record of missed payments.
   This is no small problem. The World Bank estimates that there are two
   billion adults without bank accounts, and even those who do have them
   still often rely upon the informal flexibility of cash for everyday
   transactions. These are people bearing indelible markers of being
   incompatible with formal institutional space. They are often too
   unprofitable for banks to justify the expense of setting them up with
   accounts. This is the shadow economy, invisible to our systems.
   The shadow economy is not just 'poor' people. It's potentially anybody
   who hasn't internalised the correct state-corporate narrative of
   normality, and anyone seeking a lifestyle outside of the mainstream.
   The future presented by self-styled innovation gurus has no scope for
   flexible, unpredictable or invisible people. They represent analogue
   backwardness. The future is a world of endless consumer choice built
   upon an inescapable digital uniformity of automated rules, a matrix
   outside which you can neither exist nor think.
   Back in Amsterdam I hang out with Ancilla van de Leest of the
   Netherlands Pirate Party. She only visits establishments that accept
   cash, true to her political belief in individual privacy from prying
   It would be wrong to assume, however, that Ancilla's primary concern
   involves surveillance by a Big Brother-style bogeyman. It's true that
   your spending patterns reveal much about how you actually live, and the
   privacy implications of having these recorded in searchable database
   format are only starting to be uncovered. We know that targeted
   individual surveillance of payments occurs by the likes of the FBI and
   NSA, but routinised mass surveillance could become a norm. Imagine
   automatic flagging systems triggered by anyone engaging in a
   combination of transactions deemed subversive. Tax authorities are
   bound to be building systems to flag discrepancies between your
   spending patterns and your declared profits.
   It's also true that at London fintech gatherings the excited visions of
   cashless society now occasionally come with a disclaimer that we should
   think about the power granted to those who control the system. Not only
   can payments intermediaries see every time you buy access to a porn
   site, but they have the ability to censor your transactions, like Visa,
   PayPal and MasterCard attempting to choke WikiLeaks by refusing to
   process people's donations. We could imagine some harsh sci-fi scenario
   in which a theocratic regime issues decrees to payments processors to
   block anyone buying books deemed sexually deviant. Such decrees could
   be automatically enforced via code, with subroutines remotely
   triggering smart locks to place the offending miscreant under house
   arrest while automatically deducting a fine from their account.
   Such automated dystopias should ideally be avoided, so a dose of
   paranoia about digital payments systems is a healthy impulse, even if
   it might be unwarranted.
   But that isn't really the point. What's more important to Ancilla and
   me is the looming sense of an external watcher that 'assists', 'guides'
   or 'helps' you in your life, tracking and logging your moves in order
   to influence you. The watcher is not a single entity. It's a collective
   array being incrementally built in stages by startups and companies
   around the world as we speak. We feel it seeping deeper into our lives,
   a mesh of connected devices, cookies and sensors. Whether we visualise
   it as the benevolent eyes of a parent, or the menacing eyes of a tyrant
   doesn't matter. The point is that the eyes have the potential to
   monitor you, all the time.
   The proclaimed Death of Cash is thus an episode in the broader drama
   that is the Death of Privacy, the death of breathing room, and the
   death of informal, non-measured, unaccounted-for behaviour. Every
   action you take must forever be attached to your digital persona,
   dragging with it a data trail extending back to the day you were born.
   We face creating an entire generation of people who do not know what it
   feels like to not be monitored.
   For many economists, the War on Cash will be resolved by their
   favourite mystical demigod, the market. This guiding force prevails
   when utility-maximising producers and consumers go around making
   rational choices with perfect information about their options, and with
   total freedom to choose whether or not to exercise those options. If
   digital payment transaction costs are lower, then cash will rightly
   The pristine realm of market theory is unfit to assess the dynamics of
   this situation. Our sense of what constitutes a legitimate choice does
   not form in a vacuum. We are born into social power structures that
   tell us what normality is, and that shame us for not choosing
   'correctly'. You might be a rebel who challenges prevailing cultural
   norms, but those norms are conditioned by those with the greatest
   financial and media clout. At this moment the blaring of propaganda
   extolling the short-term conveniences of digital payment is dulling our
   critical impulses to rearrange our cultural DNA. Who is thinking about
   the longer-term implications of building our lives around these
   systems, and thereby locking ourselves into dependence upon them?
   Unlike a battle fought using violence, hegemony is the assertion of
   power by getting people to believe in it, to see it as inevitable,
   unassailable and normal. Visa's four-year plan is one such exercise,
   and once we've internalised it, we'll choose to build their power.
   We'll feel strangely comforted by the MasterCard billboard endorsed by
   the Mayor of London. We'll find ourselves downloading ApplePay like a
   dazed child accepting a gift.
   So, let's prepare for the War on Cash. Remember, this is not about
   romanticising the �10 notes with the Queen on them. This is about
   maintaining alternatives to the stifling hygiene of the digital
   panopticon being constructed to serve the needs of profit-maximising,
   cost-minimising, customer-monitoring, control-seeking,
   behaviour-predicting commercial bureaucrats. And fear not, the Germans
   are onside, along with the criminals, the homeless, the street-side
   buskers and an army of people whose lives will never get a five-star
   rating on a mainstream reputation scoring system. We will forge
   alliances with purveyors of non-bank alternative currency systems; and
   yes, we will maintain the option to use our payment cards. Because what
   we fight for is precisely that. The option.

   Brett Scott
   � [2]@Suitpossum
   N [3]LinkedIn � [4]Blog tel 0044 79 8243 7769
   Pd Essays: [5]FutureOfMoney / [6]DarkDigitalFinance / [7]Talking to
   Bots / [8]UNRISD blockchain



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