The War On Cash

-Source-Economic Policy Journal- The war on cash" refers to a set of policies in the United States and around the world deploying the power of government agencies to suppress the use of paper currency. The principal aim is to shift transactions to credit card and bank account media that leave an electronic data trail for law enforcement and tax authorities. A secondary aim is to raise the cost of cash storage so as to allow the central bank to push nominal interest rates further below zero. The phrase war on cash" is of course intended to be dramatic. Harvard economist Kenneth Rogoff (2017) has objected to it as a polemical exaggeration" in his response to a critical essay review (Hummel 2017) of his recent book on the topic. What he considers an exaggeration is not the term war" mind you but the unqualified term cash" given that he himself advocates only a war on big bills" and not a fully cashless society." Point granted. But this complaint about overly dramatic phrasing is a bit ironic coming from the author of a book entitled The Curse of Cash not The Disadvantages of High-Denomination Bills (Rogoff 2016a). Some other writers and officials wage war not only on big bills but also on all cash transactions and on other private payment methods like bitcoin. They do seek a cashless society. They want to drive all transactions into forms that leave an audit trail for the law enforcement and tax authorities. In this respect the phrase war on cash" is too narrow rather than too broad. It is really a war on financial privacy." They would welcome us to a financial panopticon. The phrase war on cash" suggests a parallel to the war on drugs" and aptly so. In both wars traditional civil liberties are shunted aside in the criminalization surveillance and prosecution of victimless private activities.