Journaltalk - The War on Cash: A Review of Kenneth Rogoff's "The Curse of Cash"

The War on Cash: A Review of Kenneth Rogoff's "The Curse of Cash"

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  • Jeffrey Rogers Hummel
Volume Number 14
Issue Number 2
Pages 138–163
File URL The War on Cash: A Review of Kenneth Rogoff's "The Curse of Cash"
Publication year 2017

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  1. As one of seven billion spenders, I use cash almost exclusively for daily shopping. I notice how much faster it is for checkout persons in stores to process my cash purchases versus purchases by those inputting various cards, sometimes unsuccessfully. Cash is recognized broadly; coins fit into parking meters, candy machines, and much else. The utility is here, now, and needs no year-long trial and error implementation. I like cash, I want to keep it, and where do I sign up for any coming save-our-cash war?

    posted 01 Jun 2017 by Marvin McConoughey

  2. This article is more evidence that Jeff Hummel is one of America’s greatest living economists. (Too bad he doesn’t do more math so he can be more widely recognized as such!) A point that I wish he had elaborated upon was just how much repression would be necessary to end criminal activity by tamping down on substitutes for cash. Obviously, criminals are going to use the least costly method of payment and that may well vary by level. At the retail level, one can imagine that “dime bags” ($10 worth of weed or some other drug, which fluctuates in quantity/quality with supply and demand, much like the penny loaf used to) are replaced with “Camel bags,” or a sealed, excise stamped pack of Camel smokes. The Camels can then be false invoiced to a front and vended via debit card or whatever and come out clean.

    Better yet, a retail outlet could sell “tickets” to some fictional event with the understanding that certain “tickets” are actually prepayment for drugs, prostitutes, etc., which can then be tendered and destroyed by the seller. That’s what Idris Elba as Stringer Bell would have done (he was a student of Adam Smith fans of The Wire will recall). So now are you going to tamp down on all tickets too? And for those of you not conversant with drug deals (I only know what I’ve seen on The Corner, The Wire, Weeds, Breaking Bad, etc.) there is a moral hazard involved in cash deals too … the cash is tendered to A but B delivers the drugs at some other time and place. So the ticket ruse would not represent more moral hazard than market competition and info. can handle.

    Wholesale payments could be made in gold, esp. if its market price stays up. Yeah, there are added transaction costs here (like assaying the gold) but they’ll soon be minimized by competition. So then you have to tamp down on the precious metals and we’re looking at an authoritarian state, one that will stamp on civil liberties and punish everyone because a few people are breaking laws some of which maybe even shouldn’t be on the books in the first place.

    The government doesn’t have to supply cash but to outlaw it in all forms is a violation of natural rights that would have to lead to Revolution, just at the Financial Money Meter reproduced in my Hamilton Unbound (2002) predicted.

    posted 26 Aug 2017 by Robert Wright

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