Why We’ll Never Get a Cashless Society

The End of Money, a new book from Wired contributing editor David Wolman, is ostensibly about the twilight of cash and its replacement with a panoply of more efficient means of exchange. (Think transfers via NFC on smartphones and biometric wallets.) But Wolman is such a thorough reporter of the subject that it’s possible to finish his (excellent, highly readable) book and come away with a conclusion opposite his own.

For one thing, Wolman notes, national identity is strongly tied to having a physical currency. That’s why, for example, dollar bills are so ugly. The entire point of U.S. dollars, which are common currency the world over, is to inspire trust in the bank that issued them, which is ultimately the U.S. government. Without that magical thinking, they’re just paper.

This drive to make dollar bills look consistent across time is so powerful that even though the Federal government in 2008 lost a lawsuit that should force it to create bills in different sizes so that Americans with visual disabilities can tell them apart, it has so far failed to act.

Then there’s the ultimate benefit of cash – its ability to enable off-the-books transactions. In a culture as paranoid about surveillance as our own, can you even imagine the outcry if we were to move to means of exchange that were always traceable?

Wolman piles up any number of arguments against cash. There’s the (substantial) expense of producing and distributing it. The cost to small businesses of accepting it. The fact that US $100 bills are the predominant way that organized criminals of every stripe move money about.

The problem with all of the arguments for a cashless society is that they’re rational, and our attachment to cash is not. This might be less true in nations that have already given up their national currency to become part of a regional currency block (the EU, and countries like El Salvador that have adopted the dollar as a national currency), but as long as there are financial superpowers whose paper money is covered with what amounts to propaganda for the strength of their central banks, cash is here to stay.