Abolish cash? Or how economists bend what should be straight
Recently, some economists proposed to abolish cash money. Peter Bofinger has done work on this and now even Larry Summers and Kenneth Rogoff speak out in favour of this proposal. This may sound surprising to many: what do these economists try to achieve? Why would anyone want to physically remove cash money, the generally accepted means of payment in all modern economies, from the market? In modern societies, cash settles liabilities clearly and immediately. What is the advantage? Abolishing money will, without any doubt, lead to an even greater monitoring of and intrusion into our private lives. It is difficult to understand why such a proposal is being made precisely at a time when there are already ample legitimate concerns about the surveillance of the citizenry.
The arguments put forward in favour for the abolition of cash show that these economists enter a domain that they do not understand very much at all. One of their arguments is that abolishing cash money would lead to much more accurate estimates of informal employment and (much more importantly) money laundering. But is this true? In the case of informal employment, tax avoidance is very easy, cash money or not. It happens all the time: we give someone a few bottles of good wine, [...]