> Banknotes are useful. Not only do they provide their owner with a standard set of payments services, they also offer financial anonymity.

> The product is weaponized and turned against its provider. This same sort of weaponization characterizes the modern provision of banknotes. The government, like Walmart, provides citizens with a privacy-enhancing product: cash.

This article has a strange fixation on the anonymous aspect of cash. It's almost suggesting that it's morally wrong to use cash (though we seem to tolerate it in society), and that non-anonymous alternatives that are tracked are better.

Let me give several arguments for why cash is beneficial even if you ignore anonymity:

0) Payments are final. Once you handed over cash, it cannot be taken back - unlike cheques and electronic money transfers, where you can claim "it was fraud" and ask the bank to reverse the payment. This gives the receiver a fairly strong guarantee of payment (except for counterfeit cash).

1) Payments are limited. Once you paid the cash and walk away, the receiver cannot take more money out of your wallet. This is unlike cheques and credit cards, where the receiver could use the account numbers to charge you more money anytime later.

2) No censorship. Look at the categories of goods and services that Visa and Mastercard ban. You might not agree with all of them. You might not be happy about future changes in rules.

3) No tolling. For the privilege of spending money on a credit card, the credit card company charges ~2% to the merchant, who in turn raises prices on the goods that you buy. Other payment methods like cheques, debit, bank transfers, wire transfers, etc. have other fee structures (generally much less than credit cards), but the fact that these payments are intermediated by financial companies means that they could charge arbitrary fees to you for transferring your money.

> But an across-the-board price increase hardly seems fair. Those abiding by Walmart’s rules are being asked to make up for a shortfall that is entirely the fault of suit-stealing rule breakers. Honest shoppers who don’t generally like to use invisible suits will be particularly furious — and who can blame them? They are being asked to pay more for the goods they hold dear in order to support the use of a single product they never cared for much anyway.

The generic form of this argument is that you put a tax on stealing in general. But we already have that; it's the laws against stealing (or tax evasion).

Obviously you can still be caught for tax evasion even if you're using cash. The counterparty can report you and the IRS pays rewards for that sort of thing. Law enforcement can notice that you're living in a mansion and have six cars while reporting no income and investigate how you're paying for it. Moreover, that puts the cost on the people actually evading taxes, instead of on all the innocent people using the anonymous payment method. And isn't the point here supposed to be to not impose costs on innocent people, and to deter tax evasion rather than deterring privacy?

Also notice that even the proposed system already exists. If you have digital money in a bank you get interest (CD rates currently ~5% APY), if you have cash in a mattress you don't. But people using cash to evade taxes don't have to stick it in a mattress anyway; they can just spend it immediately, which is what they already do because of the existing incentives.

So, the idea is to make one of the stronger methods of avoiding being spied on to be a privilege only available to people with enough means to be able to pay for it?

This is directly backward from the way it should work. You shouldn't have to incur a formal financial penalty just because you want to minimize the amount of spying you're subjected to.

There is a fallacy that "if only we can get X% more of our budget" we'll fix the government services. You can't fix the hole by throwing money in it. Efficiently spending the money they already get should be the priority.

Butt... the medicare is unfunded. Well why is it possible to have high-quality medical services in Thailand with international doctors working there, but not in the US with absurdly high/hidden prices for everything? Fix the medical market first, then ask for more money.

The whole argument in this article is backwards...

And btw, the inflation is indeed eating the cash too...

> Because its coins and banknotes don’t leave a paper trail

Slightly off-topic, I've wondered whether serial numbers are captured on bills processed through an ATM. Bill are also put through machines when human tellers receive them at a bank. These days it wouldn't be that hard to track the currency flows, although intermediaries would not be visible.

> the effect would be a lower tax bill for all non-cheaters

Hahahaha. This is not how governments work. At all.

Let's stop calling individuals cheaters. If anyone is a cheater, it's the government due to their reckless moneyprinting leading to substantial inflation. Individuals are the victims.

The comments here are somewhat confused, understandably as the article is too. Cash is really expensive for shops, many digital payment methods cost a fraction. (Not in the US perhaps, but that whole payment system is antique)

The interesting question is how anonymous digital payments will work with stable coins. While in theory perhaps traceable, in practice not doable at scale.

We might be going back to a world with more cash like payments.

Or we could work on more modern forms of cash that make tax evasion harder while preserving privacy.

But sure, I suppose we could also start taxing everybody for the crimes of some instead. But why stop with cash and tax evasion? Just stop charging any monetary fines and increase taxes to make up for the shortfall...

a. How much tax evasion is carried on by cash payments? Certainly they aren't the only way people avoid paying taxes, and I would think that restricting oneself of bills, however high the denomination, would restrict one's scope.

b. I have a $100 bill in my wallet as I write. This is not because I have it in mind to help somebody avoid taxes on goods or services, this is because I missed whatever prompt on the Citibank ATM that allows one to specify "all $20s".

From the title of the article, I was really hoping to hear about an experiment to discover the value people placed on their privacy.

The article has a top-down idea for reducing the use of large bills, but no mention of a price-discovery mechanism.

Are you aware of any work in this vein?

What a perverse world view. The writer thinks we exist because the government allows us to exist. What an idiot.

This article makes a false assumption that taxes are both moral and necessary:

> The government needs to fund (via taxes) the services it provides

The problem in the USA is that _barely any_ of our taxes actually provide services. A minuscule tax could easily pay for police/fire/roads. Instead most of the tax revenue goes directly to the pockets of 1%-ers. If the US government were on Charity Navigator, it would have a negative star rating.

> Those abiding by Walmart’s rules are being asked to make up for a shortfall that is entirely the fault of suit-stealing rule breakers. Honest shoppers who don’t generally like to use invisible suits will be particularly furious — and who can blame them?

If you didn't read the article, the abstract idea of the above quote is the increasing amount of legislation, rules, and regulations levied on society as a whole meant to curtail the actions of a few.

Consider consumer drones: the recent FAA rulemaking utterly handicapped the utility of consumer drones. In my opinion, this is a drastic loss of rights which should have been reserved by the people, not the FAA.

The FAA derives it's authority from congressional mandate to "manage the navigable airspace" and to that end, the FAA will fight court battles to ensure that every square inch of air space is considered navigable. This is representative of government power being handed to an organization and then expanded well beyond "reasonable scope."

A reasonable scope would be to say "well, we cannot legislate that birds and hawks should be ticketed for flying in the navigable airspace, so maybe it's reasonable to condone that part of the airspace (where birds fly). Let's focus on where passenger aircraft fly."

Instead, with no documented catastrophic accidents, your ability to fly a drone has been saddled with ridiculous legislation.

The biggest tax evaders don't use cash anyways, it's all targeted at little people that happen to win $50 here and there, like our baby sitter.

By setting a levy or negative interest rate of 5 to 10 percent per year on high-denomination notes (there are various ways to do this), the government would be able to earn a large-enough stream of revenue to help offset the shortfall created by cash-using tax evaders. The effect would be a lower tax bill for all non-cheaters, both for those who generally do not use cash and those who use only small-denomination notes ($1 and €5s). In effect, the anonymity provided by $100s and €200s would now be directly paid for by the users of those $100s and €200s. Unlike an all-out ban on banknotes, financial anonymity would still be provided.

This is what inflation accomplishes, unless I am misreading something obvious? Keeping money out of financial system and hence anonymized means losing purchasing power to inflation.

The title of the article is of significant interest, however the article text never tries to assess a price, it just spends a few paragraphs on a goofy analogy trying to describe what the pricing would involve.

Potentially great subject, pretty poor article...

...Are you sure you want to push money launderers more into crypto? Cause that's all you'll be achieving using this.

Good for me, I'm still holding some XMR :-)

I note few simple things:

- when you exchange a certain amount of cash they are still the same amount after nth passages, when you pay with all common "e-payment" services well, likely at the nth passage you have much, much less due to money exchange fees;

- money are not richness. Money MUST BE just a unit of measure of various substrate, merchandise to use Marx terms. So money could only be exchanged counter goods, because they represent the value of goods, they can't be used alone to create more money, like fractional reserve or private central banks. In the end money could only be created by States paying with them people/companies with salaries, incentives, direct investments where the constrain are natural, human, industrial resources.

Essentially "public debt" it's a centuries old scam people still drink blindly and taxes until money are created as "public debt" in most cases, are just a mean to rob people richness till leaving all except the bank without nothing, sound like the 2030's Agenda "you'll own nothing"... When this happen it's time for a "great reset", a war typically... Does it ring a bell?

Taxes where money are created by the State to push people doing something are a means to redistribute richness to assure that those who do more earn more, otherwise there would be no point in working at all, but still avoid some with too much and others with too little that will break the society and actually we are exactly in a broken society, with some with really much and most with really too little. Yes, the social system is a complex system, so it's not Gaussian, it's hyperbolic, but like so at these levels does not work, there are not enough natural resources to continue this way.

What happen in nature when there are not enough natural resources? Well, many die, potentially till extinction.

The answer then? Distributism. An ancient economic theory, that ensure dynamism ensuring the interest for anyone to move and the possibility for most to decide where to go, because yes, from the old Francis Galton experiments few very skilled people gives better results than some not skilled people, but the near perfect result is the mean of ALL, skilled and unskilled, or the bazaar not the cathedral.

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This has something of a muddied and confusing analogy. If you buy Walmart groceries with cash (whether in an invisibility suit or not), VAT is priced into the goods and Walmart is declaring every penny of goods sold to the tax man without having to track who bought them.

Also, in terms of government focus, it gets most of its tax revenue from high earners - "the 1%" pay 45.8% of US taxes. The top 10% pay 75.8% of US taxes. These high earners make most of their money through ownership rather than labour, and ownership inherently has a paper trail; stable government and rule of law guarantees the legitimacy of their ownership claims. How much do they think is missing from unreported income, compared to how much is missing because US corporations hold their earnings in offshore accounts?