Democracy And Cash: The Tool Against Authoritarianism – OpEd


In an era marked by the rise of authoritarian regimes, democracies worldwide are increasingly recognizing the fragility of their cherished values. Among these values, freedom stands as a fundamental right that can be nurtured and safeguarded in various ways. One such avenue is using paper money, which facilitates anonymous and convenient transactions. 

Life without real income, property, bank account, pension and even citizenship – is this even possible in the modern society? Many of us imagine a homeless street beggar at most – but reality is different. Even an educated, well-off and socially active citizen can end up like this, if he lives in a country where the state suppresses civil liberties. 

Keeping an eye on you  

Just recently, 222 Nicaraguan political refugees, homeless, penniless and passport-less, found themselves in the USA. Former political prisoners, they fled the regime of dictator Ortega. They had their relatives and memories left on the other side of the border – and nothing else, because their former state stripped them of everything, including the funds in their bank accounts.  

The expropriation of money by the state is not a simple theft. “This theft is another serious violation of fundamental human rights, since private property is a constitutional right and a basic legal guarantee recorded in multiple international agreements signed by Nicaragua,” says former Nicaraguan presidential candidate Félix Maradiaga. Indeed, considered within the framework of the citizen-state relationship, money represents not just private property, but embodies the fruits of one’s labor, investments, and economic activities. It also works vice versa, letting us exercise some fundamental human rights, such as to move freely (buy a train or plane ticket) or enjoy benefits of cultural freedom and scientific progress (buy a book or take a course of your choice). 

Authoritarian regimes regard such freedom of action as a threat: not letting people being able to exercise these rights freely and anonymously means protesters can be controlled and suppressed. It was a difficult task before: civilian surveillance systems had to be set up, restrictions on private property had to be imposed, and so on. The digital age, however, and the shift to cashless, made the labor much easier. 

Back in 2019. China blocked millions of “discredited” travelers from buying plane or train tickets as part of the country’s controversial “social credit” system. Social credit offences in the Asian state range from not paying individual taxes or fines to using expired tickets, smoking on a train or not walking a dog on the leash. The scale of the imposed measure shows the ease of governing a society in the cashless era: the same Nicaragua has already been proven to use the Russian surveillance tools for tracking payments, and China, leading the rest of the world in building up digital payments networks, is already successfully using payment app bans for disciplining its citizens. 

The money that gives freedom 

What is happening at the other political pole? There are democracies that once vowed to protect the freedom by all means. Their citizens just know that the state has no right to control their private lives, regardless of their political beliefs or whether their dogs are walked on a leash. Electronic payment systems are popular there as well, but most of the time cash still takes a significant role in the local economic life. 

Paying with banknotes and coins in a democratic state is not just a matter of habit. There, banknotes and coins provide individuals with a level of privacy and personal autonomy in their financial transactions. Cash transactions allow locals to retain control over their financial information, protecting their privacy from unwarranted surveillance and infringement on their freedoms. One of the most recent examples here is Switzerland, which not too long ago proposed constitutionally supporting access to cash in the country. “It is clear that… getting rid of cash not only touches on issues of transparency, simplicity or security… but also carries a huge danger of totalitarian surveillance,” says Richard Koller, President of the Free Switzerland Movement striving to protect the democratic freedoms of Swiss citizens. 

In contrast to their authoritarian neighbors, democracies seek not to infringe on, but to protect citizens’ rights to privacy: “Because our democracies are based on the idea that, on the whole, human beings are good, which is why we recognise and protect human rights against state interference”, explains Law professor Frédéric Bernard at the University of Geneva. Cash, with its privacy and security, is considered here not just as a means of payment, but an instrument to instill trust in the government: “Depriving citizens of a simple tool to guard their privacy in financial matters can easily prove to be counterproductive. Feeling captive to public authorities – as opposed to being a citizen – would loosen the bond between people and government,” notes Heike Mai, Senior Economist at Deutsche Bank. 

Democracy alert 

Undoubtedly, banknotes and coins cannot be the only foundation of democracy. Nevertheless, the world has fallen on hard times recently, and all means must be used in the battle to preserve the established order – especially since democracy as a social institution is now under threat even in its traditional strongholds, reads a report of the Secretary General of the Council of Europe. 

Russia’s recent invasion into Ukraine shook up conventional political systems and triggered negative political trends in some countries. In practice, this has resulted in, among other things, new laws and misuse of existing ones to limit civil society, non-governmental organizations faced with increased financial restrictions, and the use of the legal system to undermine political opposition. 

Of course, such trends are not commonplace yet. Nevertheless, the very fact that they are occurring in democracies is a reason to be alert and to ensure that the threat to freedoms can be addressed adequately. Cash can be such a tool – it cannot be frozen, it provides anonymity and privacy, and is a perfectly legal means of payment. Paying in cash does not mean that a citizen is committing an illegal act; on the contrary, economic freedom and autonomy provide individuals with the flexibility to invest, save, spend, or donate their wealth according to their own preferences and goals.  

This economic empowerment strengthens individual freedom and supports the very notion of a democratic society, believe 58,000 of those who signed a recent petition to mandate cash acceptance in another democratic country, the UK: “There are dangerous political implications with going cashless, as instances of banks and financial service providers closing accounts for political reasons are not unprecedented and are clearly at odds with liberal society’s cornerstone of freedom of belief.” 

Despite these arguments, the debate about whether to continue to support cash is still going on today – with most cashless champions arguing that the digital era has no place for the old-fashioned paper. Is there any place for freedom and democracy in this era, then? “Maybe the [cashless] world wouldn’t necessarily immediately become some giant surveillance state –– but the potential for that outcome becomes much much greater,” writer Brett Scott argues, and those states that want to remain democratic are already starting to listen to these and similar arguments. 

Leave a Reply

Your email address will not be published. Required fields are marked *