Mr. Wolman puts forth a few ideas regarding the detrimental effects of physical currency - but before you take this to mean that he wants to go back to the gold standard, forget it. As Mr. Wolman points out, the only reason that gold became the de facto currency was its relative scarcity and the fact that it didn't rot.
According to Mr. Wolman, physical currency imposes a tax on the poor, both in this country and around the world. The poor around the world will hoard currency either because there are no banks or because they don't trust the banks. This puts their savings in danger if there is a flood or fire or if someone breaks into their home. He tells us about Sonu Kumar who is a merchant in India. Whenever he wanted to give his parents money he would have to travel two days each direction and leave someone to keep an eye on his stash at home. Highly inefficient.
Now, thanks to a smart phone app, he can go to a pharmacy, give the pharmacist the money and, with a few taps on the keyboard, the money is deposited into his bank account. He no longer has to carry cash around and his parents can access the money with their smart phones.
And let's not forget the patrons of the biggest loan sharks around - the cash checkers and payday loan operators. Because these folks operate on a cash basis they are forced to pay usurious rates to convert their paychecks into currency. With digital money, the middlemen would be cut out of the equation.
Mr. Wolman also regales us with the tales of counterfeiters - including the massive North Korean operation that nets them enough "hard currency" to purchase weaponry abroad. As an aside, I recently tried a case down in Galveston in which my client was accused of counterfeiting $100 bills by bleaching $5 bills and running them through a printer. The Secret Service agent involved hinted that North Korea was seriously involved in forgery but refused to go into detail because, you know, it was a state secret or related to national security or because no one upstairs told him anymore than that.
Governments spend an incredible amount of money trying to prevent counterfeiters from using yesterday's tools of the trade. They spend their time (and our money) installing so many security features that no one can remember them all - everything from red and blue fibers to security threads to micro-printing to big portraits to funky fonts.
But one argument that he makes is particularly disturbing. He spends a good deal of time pointing out how cash allows folks to remain anonymous and that it prevents governments from tracking would-be terrorists. Well, excuse me, Mr. Wolman, there is no good reason that the government should have a digital trail of where our money goes. It's bad enough they can track my movements (and my wife's) through our toll tags and that I accept payment through PayPal and SquareUp.
No matter how dangerous a world it is out there, we do have a right to be left alone by the government. And for that reason alone, physical currency is a good thing.
There is one more little detail that concerns me regarding doing away with currency - and that is the inherent flaws with technology. For anyone who has lived through a damaging storm and its effect on electrical grids, telephone lines and cell phone reception, the notion that all of my money may be inaccessible because the technology can't function is problematic. And what of the people that can't afford smart phones or a calling plan?
The End of Money will make you think about money in a different way. Whether you will yearn for a purely digital economy is another issue altogether.
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