A friend recently said that every time he reads about politics in a newspaper, he feels insulted.Yet, even in the financial and business world,
stories emerge that insult us. Perhaps, because we are indoctrinated by our own business and economic culture, we are somewhat shocked by stories that banks are waging a war against cash.
We are insulted, as any business-minded person should be, that we live in a financial world that is so completely upside down that governments are paid to borrow money through the use of negative interest rates. We are insulted that governments are now issuing 100-year maturity debt. There are several major nations that could have issued these 100-year bonds in 1915 that no longer exist today.
The idea that the right to hold physical cash money can be taken away from us honestly shakes the foundation of what we believe is a basic human right. The argument that holding cash can be used by crooks and criminals to further their activities is not a valid reason to remove everyone else’s money from their possession. It is similar to the idea of banning two people riding on a motorcycle because there have been murders committed that way.
Chase Bank, the largest bank in the United States and a subsidiary of JPMorgan Chase & Co., is now prohibiting cash payments for payments on credit cards, mortgages, equity lines and auto loans. In certain markets at other banks, depositors cannot withdraw cash without a prior “appointment.”
In the former bastion of financial freedom, Switzerland, certain banks are denying its commercial customers access to physical cash for any reason. It must all be electronic transfers. This is being justified by the banks and the government as being for “collective good.” That reminds us of what C. S. Lewis once wrote: “Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive.”
When government moves to monitor, control and potentially prohibit the flow of physical cash from one person to another, it is a subtle tyranny that can easily lead to confiscation for the “collective good.”
However, there is some good news. The nations with the freest economies are also those economies that perform the best over time. Even China, which presents itself as “central planned,” has been a financial “Wild West” for many years. Its problems have resulted from too much government economic management, not from too much freedom.
We like the idea of going to a Filipino department and buying a refrigerator with cash. And we will continue to fight for that right to do so.