In an age of digital banking, physical cash has become a cumbersome relic of a bygone era in the eyes of most Americans. It is easy to assume that we would all be better off in a cashless society, taking the lead of nations such as Sweden. The belief is that we would be better off in a digital monetary regime that would facilitate tax collection and tracking of criminal activity (p.2). Only demonstrating the tensions between law enforcement interests and the Fourth Amendment rights regarding financial crimes (p.3). Does the question become who benefits from the United States eliminating the use of money? It should be abundantly clear that it is axiomatically true that every policy selects winners and losers. The decision to abolish physical cash transactions is no different.
In the fashion of Bruce Yandle’s Bootleggers and Baptists (1983) theory of political coalitions, for every policy prescription; there is a moralizing agent and a beneficiary. In his 2018 paper, Norbert J. Michel, Special Interest Politics Could Save Cash or Kill It, details the parties that stand to benefit from the relinquishment of cash transactions. Some of the most conspicuous parties that prosper from a cashless society would be law enforcement, with a digital record of every economic transaction, it is hard to obscure illicit conduct. There are parities in the private sector that would find the move to electronic transactions advantageous. The credit card companies are likely one of the most salient groups of Bootleggers of anti-cash policies. The CEO of Mastercard has been a vocal exponent of getting rid of cash; it was even the first company to openly lobby on “… the behalf of bitcoin..” (p. 8). Any move towards digital payments over tangible currency would fatten the pockets of creditors. All credit card transactions are digital; it is not that farfetched to suspect that individuals who use cash would be more apt to use their Mastercard.
Other than law enforcement officials, who are the holy rollers of killing the dollar? One needs to look no further than the late Arizona senator John McCain, as he was an advocate of the COINS Act. This was a measure that was purposed to suspend production of the penny for approximately a decade. McCain defended this policy because it cost more than the actual monetary value of a penny to produce the coin. Very few American consumers would miss the penny; only twenty-six percent of transactions in 2018 patrons used pennies. Why would anyone miss a burdensome form of currency that cost more than what was worth to produce? It is important to note that McCain’s COINS bill did not dispense with copper coinage.
“ In addition, the bill provides for: (1) modifications to the composition of the five-cent coin; and (2) the replacement, in circulation, of $1 notes with $1 coins.”
The legislation would merely shift production towards the presumably more lucrative seigniorage of dollar coins. It would be naïve to not consider the local business interests in McCain’s home state of Arizona. Arizona has long held the reputation as a top copper producer and is the second-highest producer of natural minerals of any of the states. For a state that constitutes seventy percent of all cooper output, the COINS Act provides these firms with concentrated benefits. The COINS Act and the Arizona cooper industry are even Bootlegger and Baptists dynamic outside of the cashless society debate.