It may be devoted to 70’s nostalgia, but Björn Ulvaeus sees Stockholm’s ABBA The Museum as a harbinger of the future. The museum doesn’t accept cash. Since his son’s home was burgled a while ago, the former ABBA member has been campaigning for a cash-free future arguing that cash enables crime:
We can be reasonably sure that the thieves went straight to their local peddler. We can be absolutely sure that the ensuing exchange of goods never would have taken place in a cashless society. In the long run it would be extremely impractical for the peddler to trade stolen goods for milk and bread for his children. The drug pusher would be equally uninterested in TV sets and computers. In a cashless society he wouldn’t be in his business at all. His business wouldn’t exist, full stop.
All activity in the black economy requires cash. Peddlers and pushers can’t make a living out of barter. It is highly improbable that a coca farmer has use for my son’s jeans. He wants cash. Imagine if there wasn’t any. From farmer to addict a drug changes hands many times and every time cash is a must. Imagine if there wasn’t any.
According to recent media reports, Sweden is already well on the way to becoming a cashless society. Four out of five purchases are made electronically or by debit card.
But not everyone is sold on the idea of a cashless future. Former Sweden Police Chief and Interpol President Björn Eriksson warns that "little has been said about the major challenges that a cashless society brings. It infringes on people’s privacy. It can make life difficult in sparsely populated areas. It can make a society vulnerable and increasingly open to sophisticated internet crimes."
Perhaps bigger than theft is the cash economy. Tradesmen prefer cash.
I have never given the matter any thought but would doing away with cash actually do it? Or would there be ways of getting around it? I am thinking of those cards you can get at the post office which you deposit money into and pay from.
Bjorn and Bjorn fail to mention another important potential benefit of a cashless economy which is the prospect of avoiding liquidity traps. You can impose negative interest rates in a cashless economy as Simon Wren-Lewis is fond of pointing out on his blog.
The downside to a cashless society is that it would raise other types of immoral behaviour. Research shows that cash is salient and people cheat more when dealing with cash alternatives. So we would probably get a notable increase in fraud (welfare, corporate, card), for example.
I can’t quickly find the actual articles, but the research is summarised here:
http://www.dnaindia.com/money/interview-people-tend-to-cheat-more-in-a-cashless-society-dan-ariely-1718422