Online People & the Cashless Society

Trigger Warning: This is going to be a long post, so those of you with short attention spans should turn back now. For everyone else, buckle in.


Over at Hit Coffee, friend and Ordinary colleague Gabriel Conroy quotes Megan McArdle’s worries about the power of government in a cashless society. Here’s Megan:

Consider the online gamblers who lost their money in overseas operations when the government froze their accounts. Now, what they were doing was indisputably illegal in these here United States, and I am not claiming that they were somehow deeply wronged. But consider how immense the power that was conferred upon the government by the electronic payments system; at a word, your money could simply vanish.


Now consider what might happen if the government made a mistake. When I was just starting out as a journalist, the State of New York swooped down and seized all the money out of one of my bank accounts. It turned out — much later, after a series of telephone calls — that they had lost my tax return for the year that I had resided in both Illinois and New York, discovered income on my federal tax return that had not appeared on my New York State tax return, sent some letters to that effect to an old address I hadn’t lived at for some time, and neatly lifted all the money out of my bank. It took months to get it back.


I didn’t starve, merely fretted. In our world of cash, friends and family can help out someone in a situation like that. In a cashless society, the government might intercept any transaction in which someone tried to lend money to the accused.

To me, this pondering highlights a basic difference between myself and what I like to call the Online People.

Online People, I should note here, are a figment of my imagination based on my own personal anecdotal experience. But as you have decided to spend a few minutes of your day inside of my head, I will go ahead and give you a brief taxonomy of this imaginary species:

Online People are men and women (but mostly men) who spend  a significant amount of their work and personal time interacting with others online. As in the real world, some get along with people they disagree with better than others, but regardless, those disagreements greatly shape their online persona. Which is to say that while most people in the real world define and group themselves by what they are, Online People generally define and group themselves by what they are not. To take myself as an example: In the real world I am a father, a husband, a brother, a person lucky enough to be surrounded by scores of amazing friends, a Portlander, a writer and risk manger, etc. As an Online Person, however, I am someone who is not a movement conservative, not an ideologue, not a knee-jerk hack baiting for clicks, not a SJW, etc.

True, there are websites and bloggers that believe themselves to be about grouping people together based on who they are. But if you take a 10,000 foot view of those sites’ and bloggers’ content, you will see that the glue that holds them together is in fact what they are not. RedState, Brietbart, NRO, and the Daily Caller are among the most popular sites for conservatives, but if you hangout there you will find that their discussions of conservatism are comparatively rare; what they really sell is not-being-liberal. The reverse is true of Balloon Juice, LGF, LG&M, and D’Kos.

Another common trait of Online People is that they often drill down to startling depths on any given subject matter, from the grand to the banal. Of course, some people in the real world do this as well. My sister, an accomplished academic historian, is a perfect example of someone who drills deep, deep, deep down for a living. However, my sister drills down based on what she is. (A historian). She doesn’t drill down because she’s not, say, an econ professor. Her research is not devoted or even connected to proving that econ profs are eeeevil. This is an important difference, I think, because drilling down based on what you are often leads to wisdom. Drilling down based on what you aren’t too often leads to paranoia.

Which brings me back full circle to the post by McArdle.

There are, of course, a great many trade-offs when moving to a cashless society — just as there was when we moved from barter to cash. Personally, I have greatly benefitted from the convenience and automatic tracking of electronic banking, automatic deposit, and debit cards; I have also spent more than one aggravated afternoon on the phone with my bank, creditors, and credit agencies after having my identity stolen. You might find this trade-off to be good or poor, and I would certainly empathize either way. Where I get hung up, however, is when this tradeoff is presented as simply another reason to live in fear of a democratic government. What I find telling about McArdle’s worries, and why I think of her post as being a textbook example of Online People-ism, is the drilled down focus of that particular anxiety.

First off, while it’s true that the government can overreach and take you money in a cashless society, it’s also true that they can too in one that isn’t cashless. If you don’t believe me, ask Clyde Ross.

It is also true that I might someday get myself into the government’s crosshairs to the point where they feel they need to cut me off from all of my assets. If that’s the case, however, the least of my problems is going to be how easy or difficult it is for them to do so. I’m not Alex Jones, and I don’t have a secret plan in place to take my cash and bullion and stay off the grid for the rest of my life. If the government erroneously believes I have been running drugs, have killed my neighbors, or have scammed them out of $100,000 in taxes, probably best I confront them sooner rather than later.

But most important is this: McArdle is correct when she notes that the government could make erroneously take my money from me due to some clerical or computer error, leaving me in a lurch for weeks or months, as they did her. But so too could my bank, my creditors, and the nation’s credit agencies.

True story: When I was 22, just out of school, and (barely) living paycheck to paycheck, AT&T sent me a bill for three times the amount of my monthly rent. This billing was in error, and the error was obvious. There was one long-distanse call to my sister that was listed as being thousands of hours long. In fact, it was actually a minute or two in length, which the bill itself actually proved. There was a second call on the bill to my sister that started just two minutes after the thousand-minute call started.1 Indeed, there were several long-distance calls in the proceeding weeks that would not have been possible if I had really has a 1000+ hour call my sister. What happened afterwards is a rather long story that takes us too far into the weeds for our purposes here, but suffice to say that it was almost ten months later that I stopped receiving threats of lawsuits in the mail, ceased having calls to my employer letting them know I owed AT&T money, had long-distance service returned, and was able to get my credit fixed so that I could buy my first car.

Another true story: I once got a collection call from an agency representing a local adult movie and paraphernalia store, saying I owed hundreds of dollars in rented and unreturned DVDs, and thousands more in contractually agreed upon penalties. I had never been to the store before, and thought if I did then I might talk to the manger and get to the bottom of what had happened. The manager was indeed quite nice and most helpful. She pulled out a copy of the drivers license they had taken a Xerox of when the account was set up, and though it had my name and address, the photo was of a young African American man. (I am white.) So the store agreed it wasn’t really my debt. But because of their contract with the collection agency, they had surrendered their rights of authority to that debt, and the collection agency still wanted to be paid. And having no idea who the actual fraudulent debtor was, they went after the bird they had in hand: me. They didn’t win, of course, but they screwed up my credit and made my life miserable for months in the hope I would eventually cave and cut them a check.

These two personal anecdotes are reflective of the risks of commerce in a non-cash-only society. Though one was before the days of automatic electronic withdrawals, both were made possible by an electronic, computerized system born of convenience, where the phone company and and the adult store gave people credit based only on what their electronic, computerized reports said was appropriate. And in both cases, it was not the government that made my life miserable, it was places of business.

I don’t know Megan McArdle, so I can’t really tell her these stories. But even if I could, I am pretty sure I know what would happen: She would explain to me how what happened to me might have been the actions of corporations, but were really the fault of government. Because Megan McArdle is an Online Person. How she defines herself online is not as a person who wants the world to work better than it does now, but as a person who is not some liberal who foolishly trusts the government. So rather than have  a system of trade-offs with inherent flaws that might be looked at, we instead have have a force for good (the market) and a force for evil (the government), and all subsequent conclusions flow from that single starring point.

As I get older, I find that I can happily work in my real-life world with people of any political or cultural vantage point who say “there are many problems with this idea, we should try to determine how big they are and if there are workable solutions.” And I find too that I have no place in that real-life world for people who look at everything through the prism of what they are against.

Those people I am happy to leave to my Online People life.


Image credit: Wikipedia.


  1. FWIW, I had left her a message on voicemail, forgotten to tell her something in that message, and called right back. []

Tod Kelly

Tod is a writer from the Pacific Northwest. He is also executive producer and host of the 7 Deadly Sins Show at Portland's historic Mission Theatre. He is  a regular contributor for Marie Claire International and the Daily Beast. Follow him on Twitter.


  1. To me, this pondering highlights a basic difference between myself and what I like to call the Online People…

    …Which is to say that while most people in the real world define and group themselves by what they are, Online People generally define and group themselves by what they are not.

    Something does not compute


  2. I should have clarified that McArdle isn’t offering a wholesale rejection of the cashless society idea. She spends much of her column noting the real benefits of going cashless. She also ends with an appeal for thinking how we might limit the government’s ability to get things wrong. Her final sentence:

    If we want to move toward a cashless society — and apparently we do — then we also need to think seriously about limiting the ability of the government to use the payments system as an instrument to control the behavior of its citizens.

    sounds a lot like

    there are many problems with this idea, we should try to determine how big they are and if there are workable solutions.

    But again, perhaps it’s on me for not relating those parts of her argument.

    I also agree that her online persona is probably as you describe it: someone not easily taken in by liberals’ foolish hopes from government.

    While I know the post wasn’t necessarily directed at me, I’ll go even further and admit that I often define myself similar to how McArdle does and in even more ways by what I am not. Not always (I’ve written a post or two over the years on my preferred policies or on policies I oppose but that I think we can drum up solutions for. Granted, that’s not “who I am.” I’m not a policy analyst, but more of a historian and archivist.) But I do define myself as “against” x, y, or z often enough that the charge probably sticks more than it doesn’t, even in the real world, though not really at work.

    Addressing your examples, I’d disagree with McArdle’s hypothetical response. It’s not just that the government enabled the corporations to do what they did, although in a sense the government did that. It’s also that cashlessness itself made your assets and your identity more “legible” to the corporations. Your assets are more discoverable in a bank account than they would be under your mattress. Of course, they’re also safer in a bank account than they would be under your mattress. But at any rate, I agree–and I suspect McArdle would agree–that there should be protections for you and others similarly situated. That there are already some is only partly an answer. Maybe they should be better. The point is, there are downsides to cashlessness, along with the upsides.


    • All that said, I do think there’s something to your point about sticking to one’s last. Focusing on what one knows–as opposed to digging into other things and opining on them without being fully conversant in the in’s and out’s–is probably mostly healthy.


  3. ‘its going to be a while before we become a cashless society. People are only going to entirely shift over if the system makes sense to them, is easy to use, and they believe that it will be safe. Its why the legendary high trust societies in Scandinavia are the first ones moving towards being entirely cashless. Less trustful societies will use cash longer.


  4. Oh, you can be sure it’s coming. It’ll be cloaked in anti drug/crime lies because if no one is using cash, it makes cash stand out even more, but it’s really about negative interest rates and taking your money. Cash is one of the few methods to fly under the radar. That won’t be possible for very much longer.

    Oh, and those guys who were gambling? They weren’t breaking any laws. They were gambling where it was legal. They just connected from the us.


  5. Again, a lot of this is a matter of degrees.

    A corporation can make your life miserable, but it can not freeze all of your assets and prevent you from using them to fund a robust legal defense and drain all of your accounts on a whim.

    You need a government for that.

    And this isn’t to say that such power should not be held by government, only that we need to be very careful with how we allow government to use said power, and be very clear on the cost to bad actors should the power be abused (something we are very lacking).


    • I think this is a both/and issue. One of the drawbacks to the very real convenience that comes with cashlessness (I use cash all the time, but I get it from ATM’s) is that one’s money is in a sense more discoverable and “legible” to those who might snatch it in some ways. (It’s also less gettable by the violent mugger and therefore safer….a point McArdle makes in her column).


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