Good for me, very bad for you- A ‘Liberal’s’ guide to cashless society
- In Politics
- 12:43 PM, Dec 19, 2016
- Mayuresh Didolkar
As my good friend Sanjeev Sanyal once mentioned “what passes for financial journalism today is mostly a triumph or English over Economics.” Ever since Narendra Modi’s NDA government banned the 500 and 1000 rupee notes, this is proving to be true nearly on a daily basis. Reading Amit Varma’s op-ed http://timesofindia.indiatimes.com/home/sunday-times/all-that-matters/three-reasons-why-a-cashless-society-would-be-a-disaster/articleshow/56041036.cms in today’s TOI it seems English has triumphed not only over Economics but also common sense and logic.
The author opens with a reminder of how Mahatma Gandhi in spite of his poor opinions of railways, hospitals and lawyers, never once suggested a ban on them and then goes on to relate how a ban on cash is as absurd as a ban on these three.
To start with, this is false equivalency. If you ban hospitals or lawyers, you will be leaving people with no intermediaries to get healthcare or justice. On the other hand, banning one form of currency and replacing it with another is merely like banning one form of treatment and legitimizing another. In 1980s lawyers took a regular bachelors’ degree and then went on to do law. Today, students can take admission to a law course directly after 12th standard. How did that affect us as their clients?
Next Mr. Varma goes on to enumerate three of the worst reasons why cashless society would be a disaster. Let’s take a look at them.
One, a fully cashless society would mean the end of privacy. There would be a digital trail of every action you take through your purchases and transfers. If you buy AIDS medication or a porn magazine or book a hotel room for a romantic alliance, this information can be accessed by the government — or any hacker with the requisite skills.
Let me start with AIDS medication bit as I have a twofold objection to that. It is clear the author does not understand (nor did he bother to research, like I did today morning after reading his piece) how the treatment of AIDS works. To start with, unlike alcoholism (or stupidity), AIDS is not a self –diagnosed disease. If a patient comes with symptoms that suggest HIV infection, he/she is sent to do a test called ELISA. If that comes back positive, usually he/she is asked to do a confirmatory test called Western Blot test. If the unfortunate person is indeed found positive, then the subsequent treatment is done with drugs prescribed by a registered medical professional. There are no over the counter medications for treating AIDS. Can’t stress that enough. Every pathology laboratory in the country today has a fully automated system of record-keeping. Every hospital that has the ability to treat a HIV positive person will have a similar, extensive system of record keeping. Thinking that no digital footprint can be created in lab or hospitals, and only way an AIDS patient’s data can be accessed by a non-cash payment is truly idiotic.
The larger issue with this however is the blithe way in which Mr. Varma legitimizes the stigma associated with AIDS patients in society today. The argument that AIDS patients should be able to make cash payments in order to hide their condition is like asking them to live with the stigma. A columnist in a major newspaper subscribing to these views is beyond repulsive.
The argument about porn is equally hollow. Let me ask you this- how much of non- digital porn is available today? If you are a consumer of pornography, chances are you will be consuming it online. And whether you are paying for it or not, everything you do on the net leaves a footprint. So unless Mr. Varma knows about some method of porn that ordinary people like me have never experienced, I don’t understand his squeamishness about online/cashless society from this view point.
Ditto with romantic alliances in a hotel. Sure you can pay by cash, but in this age of terrorism, good luck finding a hotel that would let you and your partner check in without showing a valid proof of identity.
Next Mr. Varma pulls out the favourite trick of liberals to hit anything they don’t agree with the same phrase, i.e. stifling dissent.
Two, a fully cashless society could mean the end of dissent. The government can use any data it gathers against you. What’s more, they could make any opponent a pauper with one keystroke, freezing your bank account while they investigate alleged misdeeds. Just the fact that they have this power could have a chilling effect on dissent.
This paragraph seems to be taken straight out of the working script of Die Hard 4. To start with, nearly every democracy has enough safeguards against an elected government turning tyrannical on its own people. That is why you have judiciary enjoying independence from the executive in most countries, and that is why unelected upper houses are still maintained in India and UK.
And even if you dismiss my faith in checks and balances with a condescending laugh, tell me this- if the government indeed turns tyrannical, and with one key-stroke freezes your bank account, how much additional time the money you have on your person can buy you? Remember, cashless or not, even today, if you owe money to the government they can freeze your account without informing you (as a banker I have seen it happen), so the independence your cash gives you will be equal to the money you have on your person when the big bad government decides to come down on you with both feet. Oh, and usually they won’t give you an advance notice.
If a state wishes to turn tyrannical, it will encourage cash usage as government has far bigger control over cash than they have over technology. If the critics claim that demonetisation has wreaked havoc in itself should be proof of the state’s power through cash. The critics should be the first one to push for less cash, not more.
Here is a tip folks- any fear that sounds similar to the plot of a Bruce Willis or Sandra Bullock movie, is usually silly.
Mr. Varma then proceeds to caution us that cashless society endangers freedom.
Cash is empowerment: ask the young wife who saves spare cash from her alcoholic husband; or the old mother who stuffs spare notes under her mattress for years because it gives her a sense of autonomy. Indeed, in a misogynist country like India, cashlessness would hit women the hardest.
Accusing your opponent’s position will hit women the hardest is usually the most sure shot way of shutting down an argument these days. So I am not surprised by this argument. My experience as an investment advisor who has seen the family dynamics up close for nearly two decades, however, does not bear the above out.
If Mr. Varma had actually known a few lower middle class or poor families where husbands beating up wives for alcohol money is sadly too common, he would have known that the last thing those poor victims want on them is cash. In fact cash and gold are two things an alcoholic’s wife will almost never keep on her. The reason for the same should be obvious. To put it simply, in a lower middle class or poor household, there are only so many places physical money can be hidden. If you are aware of your inability to protect your money, you would not want it lying around. A bank FD is harder for an alcoholic husband to get to than cash hidden under mattress. I am not sure what part of this is hard to understand.
And while I agree that it is a myth that an advanced society must necessarily be cashless (the writer gives Germany as an example), the implication that the converse might also be true, i.e. cash usage is a sign of an advanced society, is simply absurd. I also find it interesting that in this context the writer leaves the following facts out:
- German shopkeepers routinely refuse to accept higher denomination notes. This is part of travel advisory to Germany.
- In European Union, Germany is an exception, not the rule as far as preference to cash is concerned.
- Apart from Germany, nearly every country in EU has limits on cash transactions.
In old days, whenever people resisted a change (nuclear power/ automobiles/ building dams at the cost of ecological balance etc), the most common feature of this resistance was that their leaders were the first to denounce use of the technology/system they were protesting against. The resistance to cashless transactions and digital reforms stands starkly in contrast. Very often, the biggest sceptics of online payments, and of increased use of technology are also its most savvy users. I don’t know the writer personally, but I am going to go out on a limb and guess that he has an amazon (or similar online retailer) account, he pays his utility bills online and he has paid a restaurant bill or two using his credit card. And I will go double or nothing that the data pack the writer used to mail this piece to the editors at Times was not purchased with unmarked 100 rupee notes.
And therein lies my biggest unease over this whole ‘cashless is bad’ thing. It stinks of “I use it because I can, but you better stay away from it, “elitist ring to it. And perhaps it is time we divert some of the cynicism that we are using for demonetisation and ask why so many ‘perfumed elites’ are demanding that we turn the clocks back and embrace cash?
One of the reason why mainstream journalists almost universally detest social media is, it took the power that they thought they had monopolized for decades, and distributed it freely. In a way, capability to do cashless transactions represents another power, small but significant. If a user of this power is cautioning others against, his motives need to be examined.
The writer opens the piece by expressing his admiration for Mahatma Gandhi. I find it curious that the great man’s “be the change you wish to see” failed to make any impression on him.
Comments