Australian government proposes to limit cash payments for purchases to AUD$10K
theguardian.com
theguardian.com
"The phrase “war on cash” suggests a parallel to the “war on drugs” and aptly so. In both wars, traditional civil liberties are shunted aside in the criminalization, surveillance, and prosecution of victimless private activities
... The war on cash might be more accurately labelled the “war on people who use cash.” What are suppressed by the above-listed tactics are not inanimate objects but people. Cash itself experiences no harms. People do. Coercive anti-cash policies abridge the freedom and reduce the welfare of peaceful individuals who prefer to use cash.
... The war on cash is being waged for the exclusive benefit of those who already wield an inordinate amount of power and control over the economy and the people that are struggling in it. And they want more. By slowly, quietly killing cash, they seek to seize the last remaining thing that offers people a small semblance of privacy, anonymity, and personal freedom in their increasingly controlled and surveyed lives."
Yup, this article tickled a deeply buried "sovereign citizen" type personality I didn't even know I had.
So without cash your options are write a check, which means you have to give your money to a bank, or use a credit card, which means you have to give your money to a bank.
Americans learned in 2008 exactly how much power banks have.
I'm reading a fantastic book right now titled "Walkaway." It takes place in a near-future where solar and hydrogen energy are robust and cost effective enough that, when combined with raw material feedstock, can be plugged into 3d printers to make pretty much anything you've got drawings for. Combined with an open source CAD community and UN refugee resources, it opens the opportunity for people to simply walk away from civilization, print up shelters, and build anarchist communities that refuse to even use popularity as a form of currency. It's a fun idea to chew over - post scarcity, why not just walk away?
There's no unowned land to walk into.
That said, I agree that banks have too much power.
As for specialization, plenty of doctors "went Walkaway," and if you don't have a doctor present, you make do with a life video chat with a whole host of them as a local body performs whatever thing needs doing.
You're not gonna get brain surgery sure, but you can get a leg set.
These of course will have to be the least libertarian-adaptable environments; anywhere where survival is a collective endeavour and one idiot can ruin it for everyone will be extremely rule-bound. Look at the Arctic bases for an example.
Earlier in the book, we see what happens to "bad actors." For example, a meritocratic bad actor shows up as a newbie at a bed and breakfast that's at a popular crossroads. After hanging around for a bit, he starts trying to put up leaderboards tracking who's making the most code commits, who's taking out the most trash, who's cooking the most meals, that kind of thing. Other people don't like this because they have evidence of it causing other communities to go sour or outright disintegrate, so they revert his changes. Revert wars go down, huge discussion threads, think like the sort of stuff that caused that weird Node fork years ago. Anyway, he gets frustrated realizing nobody wants things his way, and leaves. He comes back months later with a little troop of like-minded people, uses force to take over the codebase of the Bed and Breakfast, puts up his leaderboards. Some of the original developers turn up, he says they're welcome in because of how much work they'd done. Instead, they pitch a tent outside, and say "tomorrow, we're going to head north, and build a new bed and breakfast up the road." By the morning, nearly the entire population has joined the original group, and the malcontents are abandoned once again. Hence the title of "walkaways."
Back to the original point - that very malcontent can be found in the mars-esque base of a poisonous city, but he's now indoctrinated to the walkaway culture. Having seen firsthand "the way," he doesn't "act up." The thesis is pulled from Japan - why is crime so low? Mostly culture, is the common answer.
As walkaways of this type don't exist right now, we can only hypothesize how it would actually go down, which is exactly what the author is doing, pulling from examples from hippie communes, communist groups, anarchist groups, wikis, the free software community, hacker groups, and for the converse, what the author calls "zotta-rich" and those living in "default," examples from banana republics, rampant corruption in plutocracies like Russia and the United States, copyright enforcement actions, etc.
It really is an interesting book, I highly recommend it.
> By my own (admittedly poor) math, it presents roughly ten thousand new, mind-bending and ground-breaking ideas per page. There are words in here that only otherwise exist in insular pockets of the maker/hacker/open source/thingiverse sub-sub-culture. In terms of its geek heroism, epic, generational scope and high stakes (only the survival of the human race, after all, and possibly the cure for death), the only literary comparison I can make is to Neal Stephenson's hard science disaster masterpiece, Seveneves, but Walkaway is more human. More squishy and close to home.
As of now, each bit of solar/hydrogen/etc. energy technology requires raw materials mined from around the globe, processed in factories around the world, and assembled in some other corner of the world: the number of people that made it possible could easily add up to millions. And these people are doing it to make money: there's no incentive to make the technology suitable for someone who's planning to get lost in a forest and stop paying.
In short, I don't think these technology will allow you to "walk away" any more than an iPhone can.
But as soon as the technology exists... There's no reason to horde it.
The CTR limit of $10K in the US is well known, but when it was introduced in the 70s[1] $10K was the equivalent of around $65K in today's money.
Similarly, inflation will guarantee if this is enacted Australians won't be able to buy something like a phone, fridge or a laptop in a few decades due to the relentless progress of inflation.
A few decades after that they won't be able to buy their groceries for $10K. These types of laws effectively outlaw cash entirely, they just have a time delay until they come into full effect.
1. https://repositorio.comillas.edu/rest/bitstreams/38908/retri...
My feeling is that it did little to achieve the desired result at least about money laundering. Apparently there are so many other ways to do that. For lawful expenses, checks (almost obsolete), bank transfers or credit cards are more convenient than getting cash at an ATM.
JFYI, I remember that circa 2013 I had to make a particular payment to a Government Administration (only possible via the Post Office - Bollettino Postale) of around 1,200 Euro.
The Post Office wouldn't accept cash or a credit card, only a particular kind of cheque (Assegno Circolare) emitted directly from my bank.
Of course this check had to be printed and the bank software had a limited printing length field for the payee, which was an extremely long name.
The Post Office wouldn't accept any abbreviation/acronym, I went back and forth several times between bank and Post Office until finally a bank director came out with a key that allowed to print the cheque in a "condensed" font.
If banks are allowed to kill the utility of transacting business with cash I would fully expect the amount of money sucked out of the economy by the banking sector to increase in fees to hold and transfer money.
Cash transaction are a hard break on how asinine you can be without your customers deciding to do business with nobody.
As far as I know various $10,000 reporting laws started in the 1970s. That's more than $60,000 in today's money. Have these limits ever been adjusted for inflation in any country?
Either way, impeding your ability to purchase things in any manner you (and your vendor or customer) see fit isn't okay by me.
It's like buying stuff at a garage sale with a credit card. Ridiculous.
I suspect that by increasing the cost of law abidance, it will encourage defection from the formal economy and its democratically accountable judicial system.
I'm going to go out on a limb and predict you will never, ever be able to buy anything physical with Monero. Especially something over $10k or shipped over international lines.
edit: if you are claiming I am wrong, let's see a URL with a physical product available with payment in Monero
https://edition.cnn.com/2014/02/26/tech/innovation/dogecoin-...
> If we are going to refer to bank payments as ‘cashless’, we should then refer to cash payments as ‘bankless’. Because that’s what cash is, and right now it is the only thing standing between us and a completely privatised money system. [1]
For those who are arguing about an inevitable future where cash won't exist, I'll just say that people will find other ways to transact (like barter, cryptocurrency, shadow currencies). And those will be for legal purposes and illegal purposes, depending on the people and the situation. Blanket assumptions of crime and illegal activities with cash are extremely naïve.
[1]: https://aeon.co/essays/if-plastic-replaces-cash-much-that-is...
If that works out well we can move on to publishing all transactions over a certain threshold (over a certain timeframe so you can't split the transactions). And publish all transactions that go to certain countries on black or grey lists.
Limiting cash transaction is a okay thing be there's much bigger fish to catch, if only politics meant it seriously.
Salaries are the most important transaction to monitor as they represent a recurring expense and easily become inflated in the government sector.
Tax payers have a right to know what they pay for and how much it costs. What reason are you using to justify publishing private transactions?
My view might be biased as I live in Austria which is well-know for government subsidies and funding. And that includes gold handshakes to send 50 yr-olds into early retirement. WHY THE FUCK!?!
Anyways, my point being: Instead of outlawing big cash payments (hard to achieve in my eyes) the government has a lot of opportunities where it can show the transparency needed to re-establish trust from the plebs (sorry, citizens).
I'd see publishing public transactions as a first step and private ones as a second step. I mean, all we know about that dutch-irish sandwich is fairly limited, but if those transactions had been public early on some data scientist would have said "oh, that looks funny".
There is a slope and it's very slippery.
So if you want to sell your house, and someone else wants to pay for it in cash, then you're all fine.
All other things being equal, if the government earns the money upfront instead of having to wait, tax rates can decrease slightly for the same amount of income. I live in a PAYG country, and given higher rates of tax-default and tax-stress in non-PAYG countries, I prefer PAYG.
- how many purely above board transactions of this value are there to be affected by this?
- if people are to insist on financial anonymity, how is the tax burden to be distributed fairly?
The only real example I can think of is buying a car, and even then, that's not that likely, that you'll use cash.
Also how do you even get out $10,000? Most ATMs and banks have fairly low withdrawal limits.
As for getting out $10,000 you'd usually need to go into a teller with at least a couple of days notice to withdraw that kind of cash. It's easy to do, if not exactly the most convenient. Getting money out of a bank isn't restricted to ATMs or debit card use.
It's your money, the bank is just borrowing it from you to increase their spending power to increase their own profits and charging you for the benefit. It's a total coup: When you put money in your account, you're paying them for the privilege of lending them your money to so they can make further profits. You're still entitled to it back when you want it, in whatever forms the bank are capable of providing, up to and including cash.
> It means transactions over $10,000 will have to be made through an electronic payment system or cheque when purchasing goods or services.
https://www.irs.gov/businesses/small-businesses-self-employe...
Pro tip: In a private transaction, do as much of the work as possible in the bank lobby. I sold a car, and the cash never left the bank--both I and the buyer had accounts at the same bank, so he withdrew and I deposited. The cash was just the cheapest way for us to do the transfer given the bank's fee structure. The physical handoff also synchronizes well with the physical handoff of the title/keys.
I did actually go to the bank and withdrew the ~$14,000 for my car, purchased second hand at a brand dealership (it had been traded in for a new car). It was quite an enjoyable experience, and very interesting how the bank measured bundles of ten $100 notes out by weight, with a rubber band of evidently consistent weight around each bundle. The man that handled finance at the dealership sighed, rolled his eyes and started counting. He said he only had someone pay in cash once every few months, if that, and normally for smaller amounts.
(I don't actually mind this much for small amounts for small businesses, but it does add up!)
Bit of an oxymoron, but point well taken.
There exists a legit and conditionally significant operational risk to not being paid in a timely manner. Waiting 30+ calendar days is commonplace in private business-to-business transactions...problem enough that US Federal law explicitly requires government agencies to include interest[1] on contractor payments made after 30 calendar days of proper invoice. Furthermore, if clearing time measured in days wasn't enough, the bank may even place a hold on a appreciable percentage for weeks without prior notice, and there's nothing you can do but wait it out; anecdotally, it's happened to me on at least one recent occasion with a large check issued by the Department of Treasury.
[1] https://www.fiscal.treasury.gov/fsservices/gov/pmt/promptPay...
(I do think governments should try to heavily discourage long arrears and move to e.g. 7 days being the norm; invoices are a form of unsecured credit that can cause ripple collapses like any other form of credit.)
That's a common misconception, but it really isn't true. The moment you hand it over for deposit it is their money.
- Livestock
- Machine tools
- Firearms
- Farm equipment
- Computer equipment
Cash solves the problem of escrow very effectively (if someone tries to cheat you, you physically detain them and seize your cash, which is not possible if it's bits set god knows where), does not depend on rural internet connections, cannot be reversed after the fact, has minimal transaction costs, and has a universal protocol. If you're running, eg, a farm auction, cash is by far the best option.
Argument from personally circumscribed imagination. Not really an argument at all.
Consider foreclosure auctions, estate sales, contractor services, to name a few: all venues in which $10K+ transactions are quite common, and cash is a preferred--sometimes only--acceptable method of payment.
Just yesterday while securing the services of a flooring contractor, I was extended a 5% discount option if I paid in cash upon final completion; the alternative was a credit card payment online after being digitally invoiced. Not only would the contractor save on transaction fees, but the operational risk of not being paid and legal costs of following through with a construction lien can be quite painful, especially for small businesses.
http://www.paecon.net/PAEReview/issue80/Huber80.pdf Huber, Joseph - Split-circuit reserve banking - functioning, dysfunctions and future perspectives
Abstract: "This paper first provides a detailed outline of how the present money system works. This then serves as a backdrop to discuss a number of orthodox fallacies and heterodox flaws in money theory, followed by a summary of the dysfunctions of split-circuit reserve banking and a brief outlook on the perspective of a single-circuit sovereign money system."
Keywords: monetary economics, money theory, credit creation, banking theory, fractional reserve banking, monetary policy, monetary reform
One may find comments on the paper here: https://rwer.wordpress.com/comments-on-rwer-issue-no-80/
Don't the bankers know that this will only make cryptocurrency more attractive to those who want privacy?
Yes they do, that's why they've become so heavily invested in it over the past few years. They can force onto normal people these absurd limits on the use cash, while controlling the most viable alternate transaction method.
So, people in both legal and illicit businesses need the bankers.
Physical currency is controlled by governments, since it is expensive to produce and distribute, and network-connected payments are becoming more and more prevalent, it is inevitable that at some point the cost benefit ratio becomes untenable for governments and they remove this option.
If you fight for its existence against the government which claims sole jurisdiction over it in the first place, you're fighting yesterday's war, and doomed to lose, better instead to imagine a different future based on digital currencies (of whatever stripe). I'm not keen on bitcoin et al, but the future is clearly not in physical tokens which represent fixed denominations of currency.
If you were starting a currency today, would you start with cash?
I don't think so. There are plenty of people that like to hoard their physical currency. There are plenty of people that don't trust "digital" currency (or other people having control of their money). I think it will be many decades before physical currency goes away - if it ever does.
Hoarding physical currency for a sense of control is misguided; someone else controls the value of that physical money too, and there is a policy of inflation. It really is no different to digital currency in terms of control over value.
Buy gold or land if you want to hoard (which each have their own problems), and use barter if you want to escape detection.
People doing illegal transactions will just use a substitute.
Not sure how common it is now.
Instead, think of small businesses. They regularly have the opportunity to have large transactions. Vehicles, livestock, capital equipment.
The appropriate response to this is not to try to ban it in the name of "privacy" because the stats will overwhelmingly not be in your favour. The correct response is to demand and implement appropriate and ironclad data privacy laws which make it literally impossible for agencies to do whole-database searches, go on fishing trips, or other abuses of data collection tech. A police agency should not be able to query every name who made a large-amount purchase. However, they should be able to, given a name, see what purchases that person has made. This is a critical distinction.
Give up with the "the government should not be able to track my money flows!" argument. Might makes right, basically. Instead, focus your energy on legally constraining the use of that data to conform to principles of reasonable freedom and dignity. That is the only approach that will work, IMO.
https://www.theguardian.com/world/2011/apr/03/us-bank-mexico...
Which organizations (esp. in bay area) are most effectively advocating for data ethics (including freedom, dignity, privacy)?
EFF.org?
I am looking for organizations focused on a charter of rights and responsibilities for software providers, data processors, etc. We've been terrible at self-regulating as an industry, which is absolutely begging for onerous regulations.
I cant speak for australia, but if in argentina they made purchases over 10k illegal, it would be impossible to buy property, as they are only made in cash.
Yes, lots if not most of money held in cash or similars has some stink, but its a stink made up by the government. I assure you tax evasion explains the vast majority of cash reserves and that is the reason why the government will always try to cruch on cash: to increase its revenues.
Privacy is not a legitimate defense, but government overreach is not a legitimate attack. Who would you rather win? They guy that avoided taxes or the government that already taxes 28% of GDP?
- you are forced to pay fees for a bank account
- in most countries, banks require you to be registered at a home address to open an account
- not every government can be trusted with the control over your money. Think of Venezuela or Zimbabwe, for instance
Yet, holding cash will similarly erode your value due to inflation, which is a designed-in feature of fiat currency and central banking.
Also, fees generally go away with sizeable accounts and interest can be earned.
Anonymity, however, is gone for sure with Know Your Customer laws
I don't know why you would have selected those countries. I would not trust any government with complete control over my money.
Or Brazil, where the government suddenly froze everybody's bank accounts in the early 90s (Confisco da Poupança). An article about it (in Portuguese): http://radioagencianacional.ebc.com.br/geral/audio/2016-03/h... and on Wikipedia: https://pt.wikipedia.org/wiki/Fernando_Collor_de_Mello#Confi...
Country-specific. Lots of countries have banking with no fee for having the account, either as part of a competitive system or through the post office "giro" system.
> in most countries, banks require you to be registered at a home address to open an account
This is possibly the most serious objection to requiring people go through the banking system - it enforces an ID, and is used as a form of immigration control. Some systems have circular requirements where it's basically impossible to move there/get a job/get a bank account/rent a flat without having a local "fix" one or more of those for you.
Don't believe me? Go ask anyone in finance, especially AML. Of course it's inevitable. The end goal is the elimination of cash period.
And all this outrage is misplaced anyway. In advanced countries high denomination bills are tracked. It is the simplest thing in the world for an ATM to record the serials that pass through it. If you take out a large stack of 50s to buy a $20k (or hell, $5k) car "off the grid" then the system knows exactly how much you paid Joe's Discount Auto when Joe trundles his sack of bills down to the bank and it includes the bills you took out an hour ago. The idea that by you taking out of a bank, handing it to Joe, and him banking it somehow renders you invisible has not been true for at least a decade. If you try to avoid this you are - surprise - money laundering!
This is common knowledge and has even been used to nab bank robbers when they try to use the stolen bills. How do you think the bank knew which serials were taken and where they were spent?
Think I'm wrong? Go take out $10k of the highest domination you can, then drive all around town breaking them into smaller bills all in the same few days. Then go home and chill. Give it 2-3 days and you're gonna make some new friends.
Not their whole job; I am of the mindset that a major purpose of government is to ensure liberty by ensuring order. To put any other mandate over that one would introduce nothing but social engineering/tyranny.
It sounds like the double negative and the double positive of the same thing.
You cannot create a tool that gives de-facto total power, and then make rules that forbid those who want to abuse the tool from doing so, where those who want to abuse it are also those who are in charge of enforcing the rules.
Rules do not enforce themselves. Relying on institutions to enforce rules uncorrupted is very unreliable. The only thing that does work reliably is to avoid creating concentrations of power in the first place.
Essentially, you are proposing a benevolent dictator. If only we had a benevolent dictator, all our problems would be solved! Yeah, maybe. But we won't ever have one, and a malicious dictator is not a functional equivalent for a benevolent dictator, so we better stop building one.
Have you heard of a few little inventions called laws, police, and separation of powers? Because the things you have just declared impossible is quite common - we call it a "legal system".
I cannot believe I have to explain this. The entirety of our civilisation is based precisely on what you confidently proclaim "doesn't work".
Is it perfect? No. Is it better than anarchy? Yes.
> The only thing that does work reliably is to avoid creating concentrations of power in the first place.
This is what is impossible. Power concentrates like it's a law of nature. Government is utterly inevitable. And if you have a counterexample, please tell me and the rest of the world.
> The entirety of our civilisation is based precisely on what you confidently proclaim "doesn't work".
You seem to have overlooked the word "total". That also has been tried, and no, it doesn't work.
Sure, we have to have a government. But stop giving it more power. It's got enough already.
You can not control power with laws. Do this thought experiment with me: Imagine you had a control panel where you could just make anyone do whatever you want. That is what power is, the ability to make other people do what you want. Now, how is a law going to help against your power? It can't. Even if you allowed someone to enact a law that forbade you from killing people (obviously, you could use your total power to prevent that in the first place): If you can in fact stop anyone from trying to enforce this law on you (and in this thought experiment, you obviously can), then the law is completely inconsequential.
Now, it still seems like there are laws that control power, doesn't it? Like, say, the US constitution. But imagine the same thought experiment, with the US consitution in place. The constitution would not in any way prevent you from doing whatever you want, would it?
So, how come that it still seems in the real world that the US constitution controls power? It's because noone has the de-facto power to ignore it, and there are many institutions and the will of the governed that work to keep it that way. That is how the constitution actually works: It works by a consensus of those who have power wanting to keep the power away from their opponents.
You are mixing up nominal power and de-facto power. Laws can describe nominal power structures. But if those who wield de-facto power don't agree, those laws are completely inconsequential. A law is only as good as the will of those with the de-facto power to enforce it.
This is why you can not control a tool that gives de-facto total power with laws: Those who wield it have no reason to care about laws. A law prescribing separation of powers is worthless if one entity has the de-facto power to ignore it. So, the separation of powers is not actually a result of the nominal power prescribed by law so much as it is a result of a system of governance with a huge number of participants each wielding a little bit of power and using that power to keep power away from others--where all those participants may well be inspired by the law to keep it that way, but the point is: If they stopped enforcing this balance of widely dispersed power on each other and allowed too much power to concentrate in one place, the way back can be hard.
Essentially, democracy is one huge exercise in keeping de-facto power from concentrating. Seriously, read the constitution of any free democracy. Read the universal declaration of human rights. The whole point is to put in hard work to counteract the natural tendency of power to concentrate, because of the bad experiences humanity has had with that.
Australia did not every have a violent revolt against the ruling monarchy, but "We the people of the United States" strive for a government "of the people, by the people, for the people". A free people obey laws for the good of their neighbors and fellow citizens, not from fear of punishment from the state. Being able to ignore laws en-mass, when the people decide they are wrong, (like marijuana being illegal and a schedule I drug) is why cash needs to be available and not something that just criminals use.
[1]https://en.wikipedia.org/wiki/Foreign_Intelligence_Surveilla...