Austrian leader proposes enshrining the use of cash in country's constitution
apnews.com
apnews.com
To count or seize the individuals cash, the government has to make some fuzz. Aka send men with guns.
There seems to be some divide in our world between people who consider individual power a good thing and people who consider it unnecessary.
Here in Europe, I have the feeling the vast majority of people consider it unnecessary. The vibe I get is "The system works, so why not let the government handle and control everything.".
I wouldn't be surprised if that is a global phenomena and holds steady throughout time. For example, even when the US government seized their citizens gold in 1933, there was no resistance.
That people consider "cash" something they "own" is already a sign that people don't understand and don't care how they are gamed by the government. The government can take the value out of that cash however it pleases by printing more of it.
And no matter how much the government does that, nobody complains:
https://fred.stlouisfed.org/series/BOGMBASE
Governments on the other hand understand very well that money is a sham. Thats why they hold hundreds of billions of dollars in gold:
https://www.madisontrust.com/information-center/which-world-...
Way more than they hold foreign currency.
Gold is hard to pay with though. When Russia had their Dollars frozen last year, it was not like they said "No prob, we'll use gold then". Therefore I wouldn't be surprised if countries will shift their reserves to Bitcoin in the coming decades. As it combines the durability of gold with the usability of money.
> I wouldn't be surprised if that is a golbal phenomena and holds steady throughout time.
Come to the east of EU/Europe and you'll see a completely opposite vibe. No wonder, people in their 40s still remember communism. And the older people sometimes think communism was still better - however bad it was - than whatever we have now.
Here's one of the interviews:
i.e., the first generations never to experience it, and the least knowledgeable.
* Good old times / not remembering the bad parts.
* Having your path in life mapped out, i.e. not dealing with uncertainty.
Probably because the "bad parts" never applied to them since they had the right socio-economic background (connections to the party), and they knew how to game the system so that it worked in their favor (did no actual work but were reaping the rewards).
>Having your path in life mapped out, i.e. not dealing with uncertainty.
Because after the fall of communism a huge portion of the population was financially illiterate since you grew up and were taught that the state will take care of everything, and suddenly you wake up in an economy that's 180 degress different to what you were taught and were used to your whole life, making people completely clueless to the new world of unregulated capitalism and an easy pray to all the scammers and wise-guy opportunists at every step, so inflation, poverty and unemployment was rampant, as well a huge amount of people fell victims to various Ponzi/pyramid/get-rich-quick schemes that were common in the west 100 years earlier but were new here.
Out of the 200M+ [1] people in the USSR, what percentage would you say had connections to the party? My impression is that 99% (all but 2M) likely did not.
Hence, the "bad" parts did apply to plenty of people and those are the people we are talking about. My experience is from living half a decade in a post-fall country from 1995 to 2000. The people I talked to that missed communism often now had it bad and were left behind. In essence the average quality of life was worse under the USSR but the extremes in quality of life were less - nobody was fully left behind as they are now. There was a very certain social net that was there. On the flip side, with less extremes, there was very little opportunity for advancement, so you wind up with a relatively homogeneously poor but not impoverished society. Post-fall, poverty rates jumped (from extremely low to very high), the homogeneously poor society was still poor and the safety net was completely removed (without any of the upsides of non-communism yet to be felt; it's a decades long process to change an economy from the USSR system).
> unregulated capitalism
The only unregulated capitalism's out there are black markets. The capitalism of countries in transition post-fall were largely capitalism in name only. Kleptocracy is AFAIK far more accurate of how to describe those transitional governments that still exist today (Belorussia, Russia, Georgia, the central Asian republics are all examples that exist today)
> as well a huge amount of people fell victims to various Ponzi/pyramid/get-rich-quick schemes that were common in the west 100 years earlier but were new here
Is there somewhere I can read more about this? My impression is the governments switched to democracies in name only. Huge portions of government were there to siphon as much as they could for their own personal gain. Want a drivers license? Pay a bribe. Want a building permit? Pay ten bribes? Want to move your grain to a port terminal? Pay a bribe at every city you pass through. (The very latter is a real example, I was very loosely involved with a post-fall USDA project that looked at that problem. Notably identifying, "Hey, here is your problem - the bribes. By the time a farmer has gotten their grain to port they've payed more in bribes than their base cost - this will not work!"
[1] https://commons.wikimedia.org/wiki/File:Population_of_former...
Those with the right connections get to basically make money off other people without having to actually do any work.
A huge portion of the population is financially illiterate and easy prey to scammers.
Ponzi/pyramid/mlm schemes still pop up to fleece people.
Without having to "game" the system, one could easily fall for the rose-tinted glass effect. I have seen it a few times in people that have lived through the war (WWII) and would have happily told you how their leader weren't so bad (including the one in bed with or directly associated with Nazism).
As a person born in communism but too young to remember, now living in USA, my attitude during pandemy was best described as: The mandates are more like guidelines than actual rules.
They were definitely a good thing. We needed people not to congregate en masse in poorly ventilated spaces. But joke’s on you if you think that means I won’t go running without a mask, not like I’m breathing in peoples’ face for extended periods.
In my mind, it's analogous to a starving rural person saying they should have their hunting rifle melted down (condemning them to likely death) because lots of people have been unjustly murdered by assault rifles. Yes, guns are dangerous - they're powerful, and power is dangerous. So we recognize that there can be abuses of the power of guns (and governments), and we already have guardrails against some of the most egregious abuses - very few people argue citizens should have free access to heavy machine guns and missile launchers. What we argue about is where we should draw the line between usefulness vs risk of abuse of abuse. And in this analogy, there are some people so scared of guns that they're saying we shouldn't even have them available as a simple hunting tool.
Bringing it back to government, people are so traumatized by government abuses, regardless of whether those abuses happened to them or even happened at all, that they're sort of arguing for the melting down of the government even when it is genuinely acting in their best interest. Except it's worse, because the anti-mask movement is not trying to actually abolish government at all, just weaponize their own fear for targeted harm.
The problem comes when those recommendations become regulations which get enforced without context or nuance, because then people chafe, and it becomes a political issue, and then people resist for the sake of resisting. Which makes everything worse, and that doesn't work.
The thing that works is for people to actually believe in the rules and follow them out of solidarity and self-interest. But then you don't need to point a gun at anybody. And by the time you've sullied your own reputation to the point that you do have to, you've already lost.
The core issue was fearmongering and misinformation. We had people on TV, on the internet, reaching a wide audience, just making up lies about the pandemic or "just asking questions" in a way that is identical to making up and spreading lies. They did this for power, for ratings, for fun, whatever. It is also true that the implementation was not great and that Americans have a cultural tendency to petulance when "told" to do something, but I expect most of that could have been worked through if there wasn't such an active opposition.
Of course, it's not true 100% of the time, but even if it's only 70% (and I'm pretty sure it's higher than that) it's a good default personal policy.
The wife was absolutely disgusted towards communism. Mind you, this couple lived in a pretty luxurious two story house. She associated communism with lack. The husband on the other hand, well, he wasn't communist, but he told me about how you didn't feel precarious, so to speak. How you knew you'd be able to go to college if you studied hard, how you'd get to go to summer camp, how you'd get an apartment when you got a job, and so on. Like you could kind of feel economically secure about your future in a way that you couldn't in capitalism.
I found this really interesting. Perhaps this is gendered because the husband (who worked) is more stressed out by economic precarity than the wife (who didn't), or who knows.
Anyway, I think Poland is a bad example here - I think they are not as nostalgic towards communism generally as, say, Russians are. Moldovans seem to even go beyond nostalgia, holding communism to just be a time when life was much better.
I don't have opinions on this, just my experiences based on a handful of conversations. In other words, less than anecdotal.
It's sort of like, communism is for conformists. If your goal in life is to be a mid-level bureaucrat who never speaks out of turn then your rent gets paid.
But it's exactly that security that makes it fall apart. There is no penalty for mediocrity so it proliferates.
Except if you pissed off the communist party, then none of that for you and your children.
No way around the state-given requirements - want to work with computers and don't have a diploma for that? Well that's not possible - here's your shovel and get digging already, the state needs you! Want to move to another city and change careers? Well you're going to need good friends at important positions, and gift them dearly (and not just once to get what you want - you needed to build the relationship for a long time before that).
My grandfather was beating his children (my father and uncle) because if a child did or said the wrong thing at the wrong time, it was over for the whole family, and he felt like that's the only way to get the children to truly understand it. And even in 2013 - 25 years after the revolution - he was still afraid of the communist secret police.
My father was hit by a car when he was 12 and had a very seriously broken leg. My grandfather was taking care of him by himself, because the state's idea of taking care was locking him in a dark room with bars on the windows and using a medieval-like machine to stretch the leg, without any painkillers.
My grandfather took him to Yugoslavia to swim in the sea and that actually helped and saved his leg. However since it took months, the communist party decided to label him a parasite - punishable by prison. The local communist party cell voted about it and it didn't go through by one vote... that my grandfather got thanks to a bribe.
It was "good" for the people who fell in line - as in, they didn't have any special circumstances. Anything out of the ordinary and your life was way worse.
> The wife was absolutely disgusted towards communism. Mind you, this couple lived in a pretty luxurious two story house. She associated communism with lack.
Women had to use newspaper instead of menstrual pads. There was only very few styles of clothing/shoes available for women, while men had much more choice. Women didn't get the opportunities to be educated and work like men did, because it was expected they will stay at home and take care of children. It was a system made by men, for men. It's not surprising that a woman hated it.
I suspect Poland's precarious positions in the 19th century might have affected its development of central banking and currency in such a way as to make society less "stuck in its ways".
Wow, that was really interesting. I wonder why some supposed richer countries are quite low on that list. E.g. Sweden way down at 30
> people consider it unnecessary
In fact, I've discussed a cashless society with friends, and the majority is against, precisely because of this.
Now it may be my bubble, and not apply to the average French citizen.
When did it become so hard to pay for fuel with cash in your territories?
The matter is creeping in...
However most people didn't have the approximately 20 ounces of gold that was the cutoff, or didn't have it in the bank to begin with.
s/bit/lot/g
But these two things are mutually exclusive. If it's durable, you don't want to use it, because it might be worth more in the future.
Gold-backed reserve notes and even coins made of the metal(s) can still be debased (see https://en.wikipedia.org/wiki/Roman_currency#Debasement).
And as noted, transacting in ingots of the precious metals isn't practical. Also heavy and hard to securely store and transport.
Trying to transact in and hold a commodity is also problematic because these metals have other uses. What if you hold a bunch of gold and then we find a better non-tarnishing conductor and switch to it, and the price plummets? What if you lent platinum to a friend and suddenly we find a room-temperature superconductor that needs platinum, and the value of that platinum is now 10x'd? Or you lent platinum to a friend and before they could spend it, its value plummets for industry reasons and now they can't even do the thing that was presumably going to allow them to eventually repay you?
"Our fiat currency is valuable because, and exclusively because, our government pays its debts, has excellent regulation and enforcement, a well-understood legal system, 99% of the world's aircraft carriers, and a large stockpile of nuclear weapons" seems like a pretty decent option compared to all the others? And the Fed doing monetary policy things isn't exclusively negative. They seem to have kept us from going into a recession or having runaway inflation just this year and the three years prior. So that could've been a lot worse, I think.
With metals you can only question "What if?", with fiat currency the only question is "When?", because all fiat currencies in history have collapsed and become worthless.
No, they haven't.
Second, even if I did, the US Dollar retains 5.6× the value this standard would set. (Of course, it wasn’t purely a fiat currency over that whole time period, but then, setting a standard for collapse/no-collapse time window longer than pure fiat currencies have been a norm and then demanding counterexamples that have existed and not collapsed in that time is kind of sketchy, independently of whether you have a sane definition of collapse.)
Well, yes, but it's harder to play games with, which makes it more stable. It's similar to making the argument that while Windows is less secure than Linux, Linux also has security issues, so we should just have everybody use Windows.
We have ample evidence that the caretakers of our money supply are, shall we say, less than diligent.
No currency system is going to be perfect. You have to balance a lot of things, and every single one is subject to corruption and other sorts of chicanery. There is always a "what-if" scenario.
Gold might be better at average value performance over time than fiat currencies which are actively managed for stability and a bias toward slight value decline, but its very definitely not more stable than major fiat currencies.
Its not a particularly great thing in an investment asset either.
Gold is more or less untethered to anything right now, other than what people think it's worth as a hedge. There is an intrinsic value in industrial applications, but that's an edge case. So you are basically valuing gold based on what you can get for it in fiat currencies, which is like using a yardstick to measure itself.
Inflation after closing the gold window in the 70s has been staggering. If you have to cough up something--gold, silver, goats, something--for your currency, you can't play the sorts of games we do now with dollars.
Its not, if you look at the actual inflation-adjusted price of gold over time.
The claim that the exchange value of gold for other goods and services should be more stable than the exchange rate of fiat currencies for goods and services simply is inconsistent with the facts.
> If you have to cough up something--gold, silver, goats, something--for your currency, you can't play the sorts of games we do now with dollars.
Yes, its much harder to actively manage a commodity currency for price stability, which is the main “game” played with fiat currencies.
Those who did well in the birthing geo lottery of North America have a different experience than most others. Even European nations in past 25 years cancelled their currencies.
Those who were born into US dollar over past 25 or 100 years may believe fiat currency stays around, but that is a US-centric view.
Maybe Austrians have a valid historical concern about cash.
Or, for an example that actually happened with gold and silver, we find a previously unknown (to the society using it as currency) plentiful and cheap supply of the same metal?
The bearer token has a secret in it, which you can change over the internet if you have the existing one, so if the token changes hands you can swap the secret out and be assured the previous owner hasn't kept a copy of it. Which would also allow you to transfer them over the internet.
That would make for great "cash" but not if trading in them requires you to be a securities broker or file a tax form each and every time you want to buy a pack of gum.
It works probably better than in many other places, but which European country is that?
You'd expect Switzerland to be on that list, but in my experience the Swiss are nothing like that.
Seen from outside, Switzerland has a lot of checks on government with referenda for everything, important or trivial matters.
Governments (worst offenders being the Western ones) across the world have forced private parties to do the dirty work for them without any due process.
I agree.
Every time I see a sign that says "We're cashless!" I read it as "We're racist!"
If the very minimal burden of handling cash is going to ruin your business, you're not a business. You're a hobby.
If you have employees, cash also makes it much (much) easier for theft, fraud, tax evasion, and so on. It's pretty easy for employees to skim cash if it's coming and going.
If the "cash" part of the business is small compared to the rest then it makes (business) sense to simply eliminate that.
I agree with you though that it has an unequal effect on different groups of people. And yes, the un-banked (and that typically means the poorer segment of society) tend to be the most affected.
Cashless advocates are always talking about how "expensive" cash is, but never quantify it. Is handling cash more expensive than credit card fees, for example? If it were, businesses like supermarkets that operate on 1-2% margins wouldn't take cash. But they do. Some near me take cash freely, but charge extra to use debit cards. (For some reason, credit cards incur no fee.)
It's like the banks have used fear to institutionalize extortion.
"Think of all these horrible things that might possibly happen to your business. Damed shame if one of these exceedingly unlikely things was to happen.
Now if you give us 3% off your sales, we can make all that disappear..."
A quick look at any local court docket shows that thieves still get caught, prosecuted, and imprisoned. Real life is very different from sensationalist internet blogspam headlines.
Cash = chamber pot / outhouse Electronic payments = modern plumbing
People shat for millennia without modern plumbing. Installing and maintaining modern plumbing often requires external expertise who will wish to be paid for their services. In developed countries, the modern plumbing also needs to connect to public infrastructure and comply with a variety of regulations.
By choosing modern plumbing over chamber pots, we got rid of some issues pretty much entirely (monetary analogies in parentheses)...
- No one has to empty the shit bucket / shovel dirt in the hole (the business does not need to send an employee to the bank with a money bag)
- No one has to smell the shit of the previous user/customer (no one has to handle physical objects that may have had an interesting and/or disgusting journey prior [0] [1])
- Massive reduction in fecal-borne illnesses (reduced employee theft, fraud potential)
Day to day, I'm sure the outhouse is "cheaper" than toilets. I'll take all the benefits of modern plumbing.
[0] https://www.youtube.com/watch?v=f9aM_dT5VMI [1] https://en.wikipedia.org/wiki/Contaminated_currency
I'm not saying I agree with or endorse tax evasion—but some are doing it for this very reason, while others simply don't want a 3rd party to their b2c transactions (for whatever reason) and are ready and willing to lose customers who only want to pay in plastic. Some even offer the consolation ATM on-premises.
If you don't like the tax law, work on getting it changed or move your business somewhere where the taxes are more to your liking. Oh, being in NYC gives you access to a massive market you wouldn't have if you were in a lower tax environment? A market that continues to exist thanks to infrastructure funded via tax revenue? Funny how that works...
That was half of it—the other half was some businesses would prefer to not have a credit card processor party to their sale. It could be for a number of reasons that that are perfectly valid and legal.
> If you don't like the tax law, work on getting it changed or move your business
Also, to be clear, I am but a messenger. I don't own a business or take cash or credit card payments. If I did, I reckon I'd report them accurately for fear of getting audited and hauled off to prison—but I do appreciate your enthusiasm.
Much like taxes, it comes down to market access. By accepting credit cards, they get access to a larger market, a larger potential set of customers. The cashless person can patronize their business thanks to the electronic payment infrastructure the banks created and maintain. That infrastructure is paid for by transaction fees.
If a business owner feels that cards are too much of a privacy issue or whatever aside from the fees, that's their opinion and they're welcome to it. They can work to find payment systems and markets that align with their values if it bugs them sufficiently. There is a possibility that the intersection of the sets of "places where the markets align with their values", "places where the business owner wants to operate", and "places where the business can be successful" might be small or nonexistent. You can't always get what you want, as the song says.
Likewise, a business owner who feels taxes are unfair can look for places where the taxes align to their values. There may or may not be places that have an agreeable tax structure and sufficient markets to sustain the business.
I get pretty tired of business owners who act like the government and service providers are unjustly stealing from them when often the business' entire ability to exist and sustain itself depends on the infrastructure and services provided.
You're the messenger, yes, but no one forced you to put your hands on the keyboard. Don't be surprised if you're handed a response for the message you chose to deliver. Feel free to carry it back to the business owners you've chatted with.
Banks must offer basic accounts to anybody (at nondiscriminatory pricing) and unless it's used for fraud or if the fee cannot be paid isn't allowed to close it.
That certainly helps.
Everytime you pay anything with something else than cash, it is recorded: the amount, the time, the place, and the nature of the thing you buy.
There is no way to go to a gay bar (or another place loaded with consequences) without a trace. And this is needed for human dignity.
There is way to support a controversial political movement without a trace. And this is necessary for new idea to come up.
There is not way for kids to do dumb things without a trace. And this is necessary for growing.
There is no way to pay for something when electricity or network goes down. And this is necessary to deal with crisis.
Basically, cash buys humanity margin of maneuver, and a fallback against any decaying societal or technical system.
-- "Every exchange will leave a full track - where, when, what" already should raise a "you'd better be joking".
-- Failsafe fallback: a system depending on running infrastructure (electricity, internet, servers etc.) is badly conceived.
I've noticed that the loudest voices in favor of getting rid of cash usually seem to live in places that have few, if any, natural disasters.
Infrastructure does not fail only because of natural disasters.
We should remember that this is also true about phones.
But the rest of your point stands. Cash grants a lot more flexibility.
CC processing today 100% requires power and network.
But even if it did, how would visa process the recipe without power ? Their money is all bits.
Cash is cash, even when there is no accounting.
Though to your point on handling cash being a cost, surely credit card charges are more than the cost of handling cash?
Long before Bitcoin, back in the days before cryptographic currency meant you were probably dealing with geeks bearing grifts, cryptography researchers developed digital cash systems.
One I remember worked like this. Banks could issue digital dollars in multiple denominations. To spend a digital dollar D you would do a transformation on it to produced an altered digital dollar D' that you could give to someone. They could verify that D' came from a legitimate digital dollar, but got no information about which digital dollar it came from. When they deposit D' the bank could tell that it was generated from a digital dollar they issue and the denomination but they could not tell which digital dollar it came from. So even if the bank kept a record of every digital dollar you withdrew they could not figure out that D' came from one issue to you, let alone which particular one it was or when it was issues.
If you tried to double spend by transforming D to produce D' and then did that again to produce D'' you would get two seemingly different altered digital dollars because the transformation includes a random factor.
However if you spend both D' and D'' when they get deposited the bank is able to combine them to recover the original D and can look up who they issued it to and then you've got a lot explaining to do.
Here's a paper analyzing several digital cash protocols [2].
[1] https://en.wikipedia.org/wiki/Ecash
[2] https://ethz.ch/content/dam/ethz/special-interest/infk/inst-...
As a professional working for a company, I have little or no means of avoiding tax. Rich people can and do pay expensive lawyers and accountants to exploit loopholes in tax law, to minimize their tax liability.
People in cash-friendly occupations, like contracting, likewise have the ability to hide income through under-the-table cash transactions.
Which leaves poor saps like me to carry an unfair percentage of the tax burden, just so that a few people can feel like they are evading government supervision. (Hint: they are not).
It seems like you're conceding your own point here. If you live in a mansion and drive a Ferrari and claim you only make $15,000/year to the IRS, you're going to jail like Al Capone.
Whereas what cash allows you to do is keep anyone from knowing every little thing you buy, which is irrelevant to income tax which by then you've already paid and also irrelevant to sales tax which is collected by the seller even if they don't know who you are.
The people cheating taxes through cash transactions are not driving Ferraris, but they are buying groceries with un-taxed wads of money at Costco.
It seems that the locals, being from long established farming stock, were aghast at handing over money before they got their meals from a different window!
Credit cards were barely accepted anywhere either.
Whilst I'm sure the credit card situation has improved markedly since then, maybe a good amount of the spirit behind the drive thru reaction remains?!
In addition to some level of security — there are a lot of reasons to keep cash around.
(which necessarily needs to happen via a bank, obviously).
Where?
This is one of them.
[0] https://www.opensecrets.org/orgs/google-inc/summary?id=D0000...
[1] https://www.opensecrets.org/political-action-committees-pacs...
In 2020, Meta's contributions (90% from employees) were 91.59% to Democrats [0].
This article [1] explains how their employees make 87% of contributions to Democrats.
This article has more good info (Netflix donates 98% Democrat! Google comes in at 88%)
[0] https://www.opensecrets.org/orgs/meta/totals?id=D000033563
[1] https://www.ft.com/content/2fa73048-db90-11e8-9f04-38d397e66...
[2] https://www.cnbc.com/2020/07/02/most-liberal-tech-companies-...
Lol, the article you just posted is literally an example of bribing someone without using cash. Did you even read it? Do you get your information from just reading headlines without any critical thought? Was this post generated by ChatGPT?
Using a very basic and simple understanding of how votee politics and Austria works it's pretty obvious what the simplest reason this policy is being proposed: Cash is popular in Austria and this guy wants to get votes.
Even now, the enforcement detail is too much to put into a Constitution. There would need to be statute dictating exactly what vendors of what size selling what goods in what way have to actually accept cash. There's no sane way to require this of remote transactions. Nobody is mailing envelopes of cash before receiving anything. At best, a Constitutional provision could say something like "the government can't ban cash," which is great, but in a hundred years when nobody at all accepts it and banks don't carry it, you have a pointless, toothless provision in your Constitution.
Apparently, according to a study[0], the average life expectancy of a constitution (I presume it means a written, codified one) since 1789 is around 19 years. So while I'm sure the writers of constitutions envision them to last for centuries, in appears that they don't in practice.
The world's oldest written, codified constitution still in operation is the one in the US.