SMP: The War on Cash: What Do You Have to Hide?

The war on cash we see starting to take place in recent times has a dangerous component. Besides the technical arguments in favor (and against) the efficiency gains of a cash-less economy, politicians are putting forward the argument that only those who have something to hide would oppose to a cash-less economy.

The problem is that this rhetoric implies that any individual is guilty of something until proven innocent. The presumption of innocence, one of the most basic principles of a free society, is being dangerously inverted.

Some economists, including Harvard’s Ken Rogoff, want to minimize the circulation of cash. Such proposals are usually justified on the grounds that they would (1) reduce criminal activity and tax evasion while also (2) helping central banks execute monetary policy when interest rates are at the zero lower bound. Both arguments have been challenged on this blog (here, here, and here).

Continue reading at SMP.

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