By Currency Research
Rolf Dobelli, in The Art of Thinking Clearly, explains the psychological phenomenon of social proof:
Social proof, sometimes roughly termed the ‘herd instinct,’ dictates that individuals feel they are behaving correctly when they act the same as other people. In other words, the more people who follow a certain idea the better (truer) we deem the idea to be. This is, of course, absurd, but a very common propensity or way of thinking for most people. 156
Why do we need to argue the Case for Cash? We need it largely because organizations and governments are leveraging our weakness for “social proof” to promote agendas that are not always in the best interests of society. Governments and large organizations are spreading myths as facts that eventually serve as the platform for payments systems planning, and therefore also the platform for our collective future.
The United States Agency for International Development (USAID), a founding member of the Better than Cash Alliance, states their overarching aim:
USAID carries out U.S. foreign policy by promoting broad-scale human progress at the same time it expands stable, free societies, creates markets and trade partners for the United States, and fosters good will abroad. 157
While their aim is laudable, as part of its efforts USAID pledges to eliminate cash, with the “help” of Visa, MasterCard, Citibank, and others who benefit financially from a cashless society. Such efforts further America’s interests by helping the American big banks and American big card companies make even more profit. USAID’s pledge, made on its one-year anniversary, serves to perpetuate myths without acknowledging the underlying research and evidence we have referenced above:
USAID, FOUNDING MEMBER OF THE BETTER THAN CASH ALLIANCE, PLEDGES DEEP COMMITMENT ON ONE YEAR ANNIVERSARY Across our operations, we are making bold moves to eliminate cash, because we know it facilitates corruption, inefficiencies, and security risks. 158
Certainly, readily subscribing to the common myths that surround cash without validating the facts and then using this misinformation as the basis for governmental decision making is “of course, absurd.”
Currency Research believes that cash in the form of banknotes and coins will be in widespread use for generations to come. We liken cash to the chair, an object that has been in use for millennia but adopted as a commonplace household item as late as the 16th century, only then becoming an essential mainstay of everyday life.
Cash has no obvious replacement in sight. We do not see any legitimate reason to decelerate our collective investments and research into improving the cash consumer experience and cash life-cycle costs.
For more than 40 years, we have read articles heralding the death of cash due to credit cards, debit cards, the Internet, mobile payments, digital/virtual/cyber currencies, and now “identity” as it becomes the new currency. When or if a new payment method is introduced that is 99.9992% secure, 100% trusted, and 100% reliable in times of crisis, as well as easy, convenient, universal, and understandable, it may replace cash. Until that time, cash will continue in regular use, perhaps declining as a percent of payment means, but growing as overall payments grow. But perhaps the strongest case for cash is that it continues to be demanded by our citizens in the face of arguments to the contrary.
At a recent seminar on alternative methods of payment, almost every new payment scheme was compared to cash. It seems that whenever a new payment method is introduced, people continue to recognize that it of necessity must be “as good as cash.”
This article has been posted with permission from Currency Research and is excerpted from The Case for Cash Part 1: Myths Dispelled. To request a copy of the full report or to learn more about Currency Research, please click here.
156 Rolf Dobelli, The Art of Thinking Clearly, (New York: HarperCollins, 2013), p. 10.