The Cashless Future Will Be A Surveillance Nightmare

Cash is facing its inevitable obsolescence — and we're facing a future in which every exchange we make will be monitored and examined

Photo Illustration: R. A. Di Ieso
Apr 18, 2017 at 2:05 PM ET

When was the last time you used cash? Or rather, when was the last time you needed to use cash?

Many vending machines now use contactless payment; hovering your phone near them is enough to dispense that sweet, sweet sugar water. Small vendors can use Square to take credit cards. If you owe a friend a beer, you might just use Venmo to settle your debt, rather than try to rustle up the bills. Increasingly, it seems, there’s less reason to ever sully yourself with the grimy physical reality of cash. Even a stick of of gum at a bodega can be had by just swiping some plastic.

When we think about the decreasing importance of cash, if we do, it’s mostly in terms of convenience. It’s just easier to not carry cash; cash can get lost or stolen, and because it’s not tied to our identities, it’s hard to get back. It’s informal and off the information grid, representing only itself and saying nothing about its bearer (putting aside those stories about the vast amount of cash allegedly containing cocaine residue). It’s anonymous in ways that often make it inconvenient for we the consumers.

Conceived of that way—primarily as an inconvenient medium of information exchange—cash’s obsolescence seems an inevitability. But what will replace it? If history is any guide, the next stage in the evolution of money will be completely intangible, existing as ledger marks in digital databases around the world. Bitcoin notwithstanding, it will likely not be decentralized and transparent; it seems much more likely that governments and bankers will maintain their control of currency, creating an opaque system in which we will all be enmeshed, and from which the financiers will take their cut. Money will be tied to identity, its routes traced and monitored. It’ll be a surveillance dystopia, but not of the clumsy, grubby Phildickian variety. It’ll be an ultra-functional, shiny and minimalist nightmare, the kind where you’re not supposed to care how it works, as long as it works for you. Kind of like an iPhone.

That may sound cranky, but it’s worth stepping back for a second to consider how we’re persuaded about the color and contour the future will take. Cash has already begun to be replaced. That’s progress: all that is solid melts into air, software eats the world, cash becomes digits. The sense of inevitability is baked into much of our thinking about (and proselytizing for) new technology. The disrupters and the techno-utopians have a vested interest in presenting their just-over-the-horizon view not as a future, but as the future. The subtle but forceful underlying message goes something like, “A future of infinite convenience is bearing down on you; it is not to be interrogated, and you have no recourse but acquiescence.” Thus the arrival of particular systems—methods for allocating and distributing power—is presented as a law of nature, even a fait accompli. 

We’re persistently reminded of this: take, for example, the rhetoric of the “gig economy,” which rebrands a system of power as just the way things are now—or, more contentiously, as a positive development. Billion-dollar companies extract value in part by recasting labor as empowerment, as self-reliance enabled by their revolutionary technology; thinking through the logic of that rhetoric can remind us just where the power lies. (Spoiler alert: it’s not with the people filling those gigs.)

A different kind of reminder came in the form of the Snowden leaks, which revealed that the communications systems we all use were being leveraged for power by the United State intelligence services. The scope and scale of the spying emphasized a universal vulnerability, one dimly understood by most people but rarely remarked upon. Even post-Snowden, and as Congress allows ISPs to sell their users’ data, it’s hard to get people to do the difficult thinking about their online privacy. It’s too abstract a consideration, embedded in a system that’s too large, and one that’s virtually inescapable.

What does all that have to do with cash? We can say that, right now, the medium of money is split in two. There’s digital money, with all its convenience, which is easily distributed, accountable, and tied to a recognizable identity. Then there’s cash: analog, anonymous, lacking in personal identification. (Bitcoin and other cryptocurrencies are a third category, with many of the valuable aspects of both. But despite mainstream interest, it’s unclear that cryptocurrencies can scale effectively challenge the status quo. Or, more importantly, that those benefiting from the status quo would allow themselves to be supplanted.) Thinking about what money is and does, and for whom, means thinking about the differences between the two.

They’re complementary, but as we’ve noted, the trend favors digital money. Moreover, the trend is being accelerated, pushing us toward the long-standing vision of a “cashless society.” Take the example of India. Late last year, Indian Prime Minister Narendra Modi announced a surprise recall of more than 80 percent of the country’s cash, to be replaced with smaller bills; the move, he argued, would help stem rampant corruption and force untaxed “black money” back into the realm of accountability.

Prepared in total secrecy, the move has been controversial, and it’s difficult to say it’s been effective. But the thinking behind it is easy to understand: guilt by association. Rather than do the difficult work of dismantling the social structures that enable corruption, Modi decided to strike against cash itself, painting it as a signature of criminal activity. More Indians were forced into debit and credit cards—if they could afford them.

Pushing people into the financial system makes it that much easier for their activities to be monitored by the state (for reasons that can be necessary or overly intrusive). The opacity of cash makes it an easy scapegoat; Modi’s gambit was essentially a large-scale version of the claim “if you have nothing to hide, you have nothing to worry.” And though his strike may have been heavy-handed, the underlying issue is not unique. In the United States, for example, around 95 percent of the cash in circulation is basically unaccounted for.

It’s not hard to understand why governments would want to eliminate this gaping blind spot. Tax enforcement and anti-corruption are laudable pursuits, balanced against the abstract notion of privacy for one’s economic activities as long as they’re legal. Yet by now we should understand the fallacy of the “nothing to hide, nothing to fear” argument. In the hands of authorities, the desire for surveillance only ever grows larger; it does not contract, and can only be shrunk with a fight.

And surveillance is always a means, not merely an end. As Sarah Jeong notes, “Where money becomes information, it will inform on you.” Already, as she chronicles, electronic payments—from the massive payment processors such as MasterCard and Visa, to relative newcomers such as WePay and PayPal—offer new chokepoints for what can only be described as extrajudicial coercion. The state doesn’t have to act directly in accusing a specific person of a specific crime; instead it can insinuate, implying that, like cash, certain websites are per se suspect. Thus WikiLeaks was cut off by payment processors, as was Backpage, which many sex workers considered a safer alternative to walking the streets.

So we find ourselves at a moment when cash, formerly king, is being forced to the disreputable margins. Not just because it’s (relatively) inconvenient, but because it enables an economic space (relatively) free from surveillance—one outside the sphere regulated by the state. The drive toward a cashless society is not just one toward frictionless, convenient exchange, but one where every exchange can be accounted, examined, acted upon. To create that realm of total surveillance, cash must be brought to heel.

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