March 08, 2013 The International War on Cash by Joseph T.

Salerno The relentless war against cash payments waged by governments worldwide has perh aps gone furthest in Scandinavia. The ostensible reason given by our rulers for suppressing cash is to keep society safe from terrorists, tax evaders, money lau nderers, drug cartels and sundry other villains, real or imagined. But the actua l aim of the recent flood of laws rendering cash transactions less convenient or limiting or even prohibiting them is to force the public at large to make payme nts through the financial system in order to prop up the unstable fractional-res erve banks and, more importantly, to expand the ability of governments to spy on and keep track of their citizens most private financial dealings. One ingenious friend from Norway has fought to protect his right to use cash by invoking his g overnment s own legal tender laws against it. Here is his story in his own words: About a month ago I had a doctor s appointment at the city s health services emergen cy ward (government institution). When leaving, I asked to pay cash. I was told that the cashier s desk was closed, that I would be invoiced, and that they generally did not accept cash. I reminde d the nurse(?) on duty about legal tender. When I got the invoice, I called accounting at the ward. I told the accountant t hat I wished to pay cash. I was told that was not possible. I asked if she knew about legal tender, referring to the specific legislation. She went completely d efensive, as I clearly perceived it. She even claimed that legal issues with the no-cash arrangement had been dealt with. I said I would file a written complain t. So I did. I called in a few days later to check if the complaint had been receiv ed, which she could confirm. Now the accountant was apparently more interested i n discussing the issue. Yesterday, I got the written response. I was given the opportunity to pay cash i n this one case if I brought the exact amount. Moreover, no changes in the gener al arrangements would be made. Today, I made the payment in cash. Why did they do this? I would suspect that they figured they had a weak legal ca se, that they were dealing with someone who apparently wasn t going to give up, an d that allowing it in this case would avoid having to deal with someone with a f ormal legal interest in challenging their anti-cash system, the alternatives bei ng changing their system voluntarily and fighting an administrative complaint ca se or even worse, a court case. Of course, things would be much better if we weren t forced to use this fiat money . However, it is reasonable to expect government institutions to comply with the government s own legal tender regulations. Sweden s War on Cash Runs Into a Wall and a Heroic Bank Posted on Circle Bastiat, Thursday, December 27th, 2012 The war on cash in Sweden may be stalling. The anti-cash movement has been vigor ously promoted by major Swedish commercial banks as well as the Riksbank, the Sw edish central bank. In fact, for three of the four major Swedish banks combined, 530 of their 780 office no longer accept or pay out cash. In the case of the No rdea Bank, 200 of its 300 branches are now cashless, and three-quarters of Swedb ank s branches no longer handle cash. As Peter Borsos, a spokesman for Swedbank, f

reely admits, his bank is working actively to reduce the [amount] of cash in soci ety. The reasons for this push toward a cashless society, of course, have nothing to do with pumping up earnings from bank card fees or, more important, freeing fractional-reserve banks from the constraints of bank runs. No, according to Bor sos, the reasons are the environment, cost, and security: We ourselves emit 700 t ons of carbon dioxide by cash transport. It costs society 11 billion per year. A nd cash helps robberies everywhere. Hans Jacobson, head of Nordea Bank, argues si milarly: Our mission is to make people understand the point of cards, cards are m ore secure than cash. Fortunately, it seems that the Swedish people are not falling for the anti-cash propaganda spewed by private bankers and Riksbank officials and are resisting th e trend toward a cashless economy. It is reported that last year the value of ca sh transactions in Sweden were 99 billion krona which represented only a margina l decrease from ten years ago. And small shops continue to do one-third to one-h alf of their business in cash. Furthermore a study of bank customers satisfactio n released by the Swedish Quality Index in October 2012, indicated that the sati sfaction index was pulled down among customers of Swedbank, Nordea and SEB by th eir policy of eliminating cash transactions at their bank branches. Even more he artening is the fact that Handelsbanken, the largest bank in Sweden, is committe d to serving consumers who demand cash. As Kai Jokitulppo, head of private servi ces at Handelsbanken, puts it: As long as we know that our customers are asking for cash, it is important that w e as a bank [are] providing it. . . . We see places where other banks are taking other decisions, we get customers from them and positive response. Fewer then 10 of Handelsbanken s 461 branches currently do not handle cash and the bank s goal is to have cash in every branch by the first quarter of 2013. France Ratchets Up the War on Cash Posted on Circle Bastiat, Sunday, February 17th, 2013 France s state auditing bureau, Cour des Comptes, informed the French government t hat it was dreaming in forecasting that the French economy would grow this year by 0.8 percent, which would enable it to meet its budget deficit target of 3 perce nt of GDP. The bureau told French Prime Minister Jean-Marc Ayrault that a growth rate of 0.3 percent was more like it, which would not be sufficient to meet the deficit reduction target. This was the case despite or more likely because of the f act that a broad based tax increase had just been imposed that would extract ano ther 32 billion euros from overburdened French businesses and households this yea r. So would a desperate Ayrault finally open his eyes to economic reality and sl ash the budget of the bureaucratic and bloated French State, a budget that is li berally larded with fascistic corporate welfare subsidies and bailouts? No way, no how. Instead Ayrault convened a meeting of the National Anti-Fraud Committee to crack down on tax cheats and presided over it himself A first for a head of gove rnment, he crowed. Tax fraud in France has been estimated to be in the range of 60 to 80 billion annu ally. Buried in Ayrault s proposal to crack down on tax cheats and further squeeze more revenue from its fiscal residents those citizens and foreigners who have not b een driven into part-time exile to escape French taxes is a draconian provision th at would lower the maximum cash payment per transaction from 3,000 to 1,000. Under the new limit a French citizen would not even be able to buy a used car for cas h. The provision would not apply, however, to citizens and foreigners wealthy an d savvy enough to have placed their income beyond the clutches of the rapacious French State by becoming fiscal residents of other countries. They would be subj ect to a limit of 10,000 per purchase in cash, down from the current limit of 15,0 00 per purchase. This may come to be called the Depardieu exception because Fren ch actor Gerard Depardieu recently caused a public stir by obtaining a Russian p assport in order to take advantage of Russia s flat-rate income tax of 13 percent.

One commentator perceptively summed up the inextricable link between the war on cash and the war on personal liberties : With this law, the French government will be able to tighten the vise on its peo ple one more turn, restricting their freedom of choice (how to pay), wiping out any privacy in those transactions, and imposing another layer of government cont rol. Once people have gotten used to the 1,000 limit based on the great principle o f incrementalism with which restrictions of freedom come to pass in democracies th e vise will be tightened further, until the government can document every purcha se made by fiscal residents. Joseph Salerno is academic vice president of the Mises Institute, professor of e conomics at Pace University, and editor of the Quarterly Journal of Austrian Eco nomics. He has been interviewed in the Austrian Economics Newsletter and on Mise s.org.

http://www.mises.org/daily/6370/The-International-War-on-Cash