A study recently asserted that around 30% of westerners are ready to abandon cash in favor of electronic money, and 70% said that would never get rid of cash entirely. While reading this may give a sense of relief, unfortunately it only takes 51% to go ahead for its implementation, should voters have a say at all. But we cannot even count on that. If politicians contend that the majority welcomes the end of cash, so be it.
Various groups of people have a good reason for preferring cash. Would it be from the mother seeking extra non-taxable income to feed her kids because she doesn’t earn enough or is already on welfare; the small business that doesn’t generate enough revenues to hire legally, to teens who like to earn petty cash to enjoy more financial freedom from their parents, etc… well, there are plenty of reasons as why most would prefer cash over a bank card.
In the practical sense that is another story: it will also affect people’s willingness to work at low costs. There is no incentive, for example, if you mow your neighbor’s lawn for say 10 dollars or euros, which become all of a sudden taxable. Or let’s imagine that you run errands for somebody else, what will show on your bank account statement, unless that somebody gave you her or his bank card. And sure, we can bet there will be a possibility to avoid taxation on the 5 dollars or euros received as a donation between pals but everything will have to be reported in your yearly tax return. Many could start having headache in the near future as soon as they realize that their privacy is gone for good when they will have to justify every penny spent. These are just simple scenarios but they give an idea as how quickly the issues could become a lot more complex. We might assume that the 30% of westerners who participated in that survey have most likely a direct deposit as income but it is kind of reasonable to assume that 50% of the population remain opposed to the new model today. Though minds will change when permanent joblessness starts taking hold. Unfortunately, reactions always come way too late and generally cannot reverse the situation without causing even more shock waves to the system.
Let’s now consider the following: Faced with a period of systemic slow economic growth it is not hard to imagine that the state could adopt a version of BI that aims to subsidize low-wage work. Indeed, in places like the United States this is the defacto situation with Walmart workers surviving only by accessing food stamps. A modest BI, of say $10,000 (which would not be enough to empower workers to stay out of the labour market for long), would essentially be a top-up of wages for low-wage employers. It would be a weapon for employers to keep wages low, as they could argue there is no need to pay workers more because of BI. In this scenario why would employers not just pay the minimum wage if there was a BI top up? (see link at the bottom)
That’s the whole truth in one paragraph. Rightfully, we cannot forget about our global financial crisis which has been brewing since the early 2000 and came back to haunt us in 2008, erasing more than $30 trillion globally, and prompted world banks to flood the markets with their quantitative easing ideology. They are still at it. From the tech to the housing bubbles, markets have been awash with digital money in order to prevent the end of the world as we know it. The threat has not gone away. Far to the contrary.
Here is what says Hayek. a free-market theorist:
The assurance of a certain minimum income for everyone, or a sort of floor below which nobody need fall even when he is unable to provide for himself, appears not only to be wholly legitimate protection against a risk common to all, but a necessary part of the Great Society in which the individual no longer has specific claims on the members of the particular small group into which he was born (55).*
Moreover the two excerpts above speak of ‘income supplement’, they do not even address any full unemployment issues as a consequence of automation and robotics. Socialism and capitalism regard Universal Basic Income almost the same way, but what it does also mean is that the economic theorists perfectly know that the markets are destined to fail and breeding a poor class – and both look at the government to fix this.
There will be a first wave of million job losses hitting the shore in 2020. And should we be already fully in cashless mode, austerity measures will make people depend on their central governments for just almost everything, and food rationing will become a way of life.
What is deemed ‘incompetence’ causes bankruptcies but that is also how Nature’s zero-sum game translates. People must band together to secure their positions, so having a top 1% is unavoidable. You may think whatever you want and even stand on your head while screaming with all the force of your lungs, the Universe does not give a damn about wealth. Wealth, aka power, Is a fabrication of the human mind that springs from the Law of Polarity pretty well observable in the ‘divided and conquered’ world we live in.
Thank you in advance for considering a donation. The next column will probe the spiritual aspect of the Earth Custodians Movement.
SOURCES (long reads but highly recommended as this column only addresses the most obvious)