In praise of cash

This is why I always have two bank accounts (with two different banks and two different ATM cards) and always have two credit cards, in case one bank account or one credit card gets shut down or skimmed it wouldn't be a big inconvenience. Especially helpful if you are going out of the country.

Uh, no.

Paying with cash is exchanging a promise that someone else, usually the central bank, will pay the bearer on demand the value of the promissory note.

Even if you could actually exchange the note for its equivalent in precious metals — which you can't — you're still just exchanging a token without intrinsic value. Its only value is conferred entirely by the monetary whims of the government.

Governments can, and have, on multiple occasions, completely disregarded sensible monetary policy and started printing money when they didn't have enough of it, totally destroying the value of people's cash in hand through hyperinflation. This is something you have literally no defense against.

When paying with some other method, we need to make a clear distinction between debit and credit.

If I pay with a credit card, I am asking someone else, usually a bank, to lend me the money to pay. Obviously, in such a situation, they have the right to refuse, albeit only in accordance with any pre-existing legal agreements between us.

If I pay with a debit card, I am asking one my debtors, usually a bank, to repay part of the debt they owe me to the person of my choosing. They may choose to be somewhat awkward about this, but they fundamentally cannot choose to disregard the debt they owe me, so long as they wish to remain solvent. Nor do they, in any meaningful sense, have the ability to grant or refuse "permission" to pay. They owe me money and, subject to the relevant bankruptcy laws, any pre-existing legal agreements between us, reasonable anti-fraud measures, etc., they have to pay.

None of this has anything to do with the issue of "freedom". It is simply a matter of the way financial transactions work in modern society. The amount of money in the economy hugely exceeds the amount of cash in circulation. Most money exists in the form of credit and debt. Your money exists in the form of credit and debt.

There is nothing scary or unfree about having money in the form of a debt the bank owes you, compared to having it as promissory notes from the government, or as legal deeds to property, or precious metals with a market value. Each and every store of value is entirely reliant upon the continued proper functioning of the market, the legal system and the government.

Money in the form a bank deposit is probably the safest way to store moderate amounts of money. As a physical entity, cash can be damaged, lost, stolen, etc. And the only person affected by this is you, meaning you have no common cause with any other person to recover your losses. A bank's stability and existence is underwritten by the livelihoods of all its customers, employees and investors.

It's a matter of better governance though. Ideally, anti-trust government entities should monitor how companies like PayPal operate.

...as though the Fed is chartered entirely for public benefit? The structure of the 12 Fed district banks are very similar to private corporations. The whole system is run for the benefit of the US Treasury and (secondarily) the private member banks that hold stock in the district banks. It's there to keep the system solvent and stable. And it may be required to remit all profits to the treasury, but the Fed is not there to protect the general public, and if Hollywood has taught us anything, it is that the meaning of "profit" can be blurred with clever accounting.

I would only be fine with cashless if the power inherent in the system were diffused, such that no single entity could exercise significant control over it, and if it were supported by laws, such that attempting a 51% attack (perhaps by merger or secret collusion) would get those responsible thrown in PMitA prison for their dire felonies.

You let the Fed control it, and they'll just use it to print money, much like they do now with paper money and bank deposits. For some, that may be a beneficial feature, but I think the power to control the size of the money supply is simply too dangerous for any one group to wield it unchecked. And I think the Fed's ongoing policy of targeting a positive rate of inflation has harmed the whole US-dollar economy to a greater extent than the problems that are hypothesized to have been avoided by it.

You put one nexus of control on the whole money supply, and that's where all the crooks will go to get their scores. Bitcoin had the right idea in trying to solve the Byzantine Generals problem, because I don't trust any big financial institution to handle money alone, but I do trust them all to distrust one another enough to gang up against anyone that tries to pull off a coup.