Cash is a Lifeline for the Vulnerable and a Safety Net for Society
Sep 13, 2024
In Afro-Caribbean communities, there’s a term for cash held in a secret place, ready for use in an emergency, such as losing a job or fleeing domestic violence: vex money. In a cashless society, with no recourse to vex money, bad situations could prove inescapable for many.
Writing for Current Affairs, writer and editor Alex Skopic is clear that ‘the cashless society is a horrible idea’. He points out that—in the case of vex money—coercive control of bank accounts is a common element of domestic abuse, ‘and widespread “cashlessness” would only amplify the effect of that control, cutting off avenues of escape’.
Skopic also points out that ‘the cashless society is a bleak and hostile place for certain marginalised groups of people’ such as the homeless. Without a fixed address, most people will lack access to a bank account, and in turn cashless means of payment. With less cash in people’s wallets, there will be fewer handouts to those in need, and with fewer businesses accepting cash, there will also be fewer places to spend what banknotes and coins they do have.
Let’s suppose, though… you don’t care about homeless people, immigrants, the elderly, or people fleeing abuse; your only concern is whether a financial system is efficient and reliable. Even in these terms, the “cashless society” is still a bad bet.
The worldwide IT outage that brought down banking, transport systems, healthcare, broadcasting, telecoms and more saw businesses that were able to go cash only, and others that could not simply shutting down. ‘Only the people who still carry cash were able to go about their business, largely unaffected,’ says Skopic.
Thanks to climate change, things like hurricanes and wildfires are becoming more common, and more intense, by the day. What happens to a city like New Orleans or Orlando when the next Katrina hits, and all anyone has are touchless terminals with their screens gone blank?
He concludes by looking at ‘the political dimension’, with privacy another casualty of a cashless society.
In a “cashless society,” what would stop government officials in a state like Florida from tracking the transaction records for everyone who’s ever bought a mifepristone abortion pill? Or, for that matter, shutting down the accounts of people and organisations they disapprove of?
He points to the Trudeau government in Canada invoking the Emergencies Act to freeze the bank accounts of anti-vaccine protesters who were blocking major roads with their trucks in 2022. ‘To be clear, the truck protest was extremely stupid and even harmful,’ Scopic says, ‘but the idea that a national government can just declare an “emergency” and prevent anyone they like from accessing their money is even more chilling.’
Other individuals have experienced abrupt debanking too, such as a reported 40 percent of US sex workers who say they have experienced having bank accounts unexpectedly closed, or Teresa Shen, a Brooklyn-based therapist whose checking and savings account was closed and her credit card cancelled after she was arrested for participating in a Stop Cop City protest, seeking to block construction of a large police training facility just outside Atlanta.
Right now, removing cash from the equation hurts the poorest and most vulnerable among us. It hands greater control of our lives to huge political and financial entities that don’t have our best interests in mind, and it makes the whole economic system more fragile and prone to breakdown. At best, it shows that the industry leaders pushing “cashless” systems haven’t thought it through properly; at worst, it shows that they just don’t care.