"Welcome to a World without Money" ran the headline of a full-page
feature article in the Daily Mirror. But it wasn't an article on
Socialism or anything like it. Written by Tanith Carey, it was about an
experiment in Swindon where 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 super-market, 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 buffs call it, "digital dosh".
Digital dosh
The experiment in Swindon, financed by the NatWest 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 British Telecom phonecard
except that it can be used to pay for anything from a supermarket,
corner 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".
Jan Pole
http://communities.msn.com/realworldsocialism
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