Welcome to a World without Money” ran the headline of a full-page feature article in the Daily Mirror on 30 January. But it wasn’t an article on Socialism or anything like it. Written by Tanith Carey, it was about an experiment that starts in Swindon this month when people will pay for things by using a special smart card instead of notes and coins or cheques or even ordinary bank and credit cards.
Tanith Carey describes what the experiment will involve:
“Imagine going on a shopping spree and never having to shell out a penny for your purchases. Groceries at the supermarket. a new outfit, even a burger on the way home all yours without ever opening your wallet. There are no bills to sign, no rooting around in your back pocket and no reaching for change in the bottom of your purse. In fact not a note changes hands. Instead, everything is taken care of with a simple swipe of a card. ”
If ever this was to be adopted universally the result would be a cashless society, not a moneyless society which would be something quite different.
A cashless society would be one in which we no longer used paper notes and metal coins to pay for things; in other respects things would stay the same. A moneyless society, on the other hand, would be a society in which the whole concept of money—as a unit in which prices are expressed and as a means of payment—would have become redundant because the things we need to live would not have prices and would no longer be bought and sold. It would be a radically different society from today.
Most people tend to see money as giving access to wealth. Indeed it does, on condition that you have some. But from another angle it can be seen as a means of excluding people from wealth—from the wealth we need but can’t pay for because we haven’t got the money. Money, in other words, only gives conditional and restricted access to wealth. It is a means of rationing—it only gives people access to what they can pay for—and the workings of the capitalist system distribute these rations to people in very' unequal amounts.
Cashless society
The idea of a “cashless society” was first promoted by the banks in the 1960s as a way of encouraging people to use cheques and so open bank accounts. In those days most people still received, each week or fortnight, a pay packet in the literal sense—an envelope containing cash. This you put in your wallet or purse and spent to meet your needs over the next week or fortnight; if you wanted to save something you had to take it as cash to a bank or building society or to the Post Office.
The banks’ scheme to increase their business worked and today most people have a bank or building society account and are paid either by cheque or by a direct transfer to their account. People now pay for many more things than they used to by cheque, with the result that the need for cash—circulating notes and coins—has declined and an approach towards a cashless society made.
A cheque is basically an IOU, a promise to pay the payee (the person or business it is made out to) a sum of money at a later date, when it is presented to their bank in fact. This, too, takes place without the need for any physical transfer of cash. It does, however, involve the physical transfer of the cheque and the feeding of the details into a computer by a bank employee. This is time-consuming and so relatively expensive for small amounts, and now the banks are dissatisfied with cheques too. They prefer bank cards.
Originally these were guarantee cards presented with the cheque to guarantee the payee that the bank would honour the cheque up to a certain amount even if the payer didn't happen to have that amount in their account at the time the cheque was presented for payment. Then, with the incorporation into them of a microchip, they became "smart cards” which enabled their holders to withdraw notes from the hole-in-the-wall cash machines that sprang up in high streets throughout the country. Now they can also be used instead of a cheque to pay for things, provided, that is, the seller (a supermarket, shop, restaurant, etc) is equipped with a machine that can read the information on the card's microchip and transmit details of the transaction to a central computer. The banks envisage these cards eventually replacing cheques altogether.
So, after the cashless society the chequeless society, the society of electronic money or, as the computer bull's call it, “digital dosh”.
Digital dosh
The experiment in Swindon, financed by the Nat West and Midland banks, takes a different approach towards the same end. It aims to see if it is practicable—and of course profitable—to replace not just cheques but cash itself in everyday transactions.
Cash differs from a cheque in two important respects. First, it circulates: the same note or coin is used many times, by the different people whose hands it passes through, to pay for things. Second, payment in cash is a transaction between two persons only; no third party is involved, only the payer and the payee, the buyer and the seller To recreate electronically these conditions, while at the same time safeguarding against fraud, is technically more difficult than the bank-card-type system which uses a third party—the central system—to carry out and confirm any transaction. But it can be done, and has been done for the Swindon experiment.
Those taking part in the experiment will be issued with a plastic card but this will be different from an ordinary bank card in that holders can transfer to it from their bank account a sum of money of their choice. This can be done either from a machine at the bank or from one attached to their phone or from an “electronic wallet” This wallet is similar in shape and size to a pocket calculator and it too contains a keyboard and a display panel; money can be transferred to it in the same way as to a card but it can also be used to transfer money directly to someone else’s card.
The card works on the same principle as a BT phonecard except that it can be used to pay for anything from a supermarket, comer shop, pub, restaurant, etc participating in the scheme, even for small items like newspapers, stamps or sweets not normally purchased by cheque. When the amount transferred to the card has been spent it can no longer be used without more money being transferred to it.
When the card is used to pay for something it is inserted into a machine that transfers the money but no information about the buyer to the retail outlet's electronic till. A perfect substitute for cash and one that avoids the dangers of robberies and muggings (but not of counterfeiting).
What a waste
It’s all hi-tech stuff, but what a waste! What a waste of the ingenuity and technical skills of the computer analysts, programmers and software and hardware engineers, since electronic money is still money, i.e. still a means of rationing people's access to things.
All these smart cards, electronic wallets and scanners with their digital signatures, guardians, cryptographic algorithms and PINs are designed for one purpose: to allow those with money access to things and then only up to the limit of the amount they have, and so to deny this conditional access to wealth to those who don't meet the conditions, i.e. to those who don’t have money or who don't have enough money. They only make “sense” in a society based on private property and buying and selling and are yet another example of how' today under capitalism scientific knowledge and technology is prostituted and used to serve anti-social ends.
In a rationally-organised society, where we produced goods to satisfy the various needs of people and where people had free access according to their individually-defined needs to what had been produced, the same technology could be used to set up and operate the efficient system of stock control that would be needed to ensure that the stores were always stocked up with the products people had indicated they wanted. But this presupposes a society of common ownership and democratic control, not the banks' advertising agency’s slogan of a cashless society. Then we would truly be able to say “Welcome to a World without Money”.
Adam Buick
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