Abolish cash? It’s the wrong question.

When something changes, there are usually winners and losers. As change accelerates, which we are seeing in many areas of the economy, the difference between winning and losing tends to increase. It’s therefore tempting to arrest the change. 

But this way of thinking is based on a faulty and, quite frankly, unhealthy view of the future. This way of thinking is based on the question of “if” – if this thing changes, these people will lose, so let’s stop the change. 

A fantastic example at the moment is the issue of cash, the notes and coins that for centuries have acted as THE medium of exchange. We’ve reached something of a tipping point in large, developed cities where some consumer-facing businesses are able to do away with cash and accept they may lose a bit of business from cash-only customers. 

The losers in this situation are individuals who don’t have access to cashless payment services. These remain a substantial proportion of people even in a city such as New York, which last month banned businesses from rejecting cash payments. “The City of New York cannot allow the digital economy to leave behind the 25 percent of New Yorkers who are chronically unbanked and underbanked,” the New York Post quoted Councilman Ritchie Torres, who introduced the legislation, as saying.

I couldn’t agree more with Councilman Torres – there are numerous reasons to liberate those 25 percent of New Yorkers from having to use cash so they can participate in the digital economy. But that’s not what he’s trying to do. The problem is that he is addressing the question of “if” – if these businesses don’t accept cash, some people can’t use them, so let’s force them to take cash. 

To get us to the real question, let’s conduct a thought experiment. I call it the Absurd Projection, and it’s simply asking yourself this: 

In 100 years, we will still be “doing X”?

The key is to choose a timeframe whereby it’s inconceivable that we will still be “doing X,” in this case, using cash. Assuming the answer to this question is no (and if it isn’t no, then you need to extend the timeframe), then we could consider the question of “when”: when will we stop using cash? But this “when” question is also a waste of time, because we can’t know when that will happen. The real question is “how”: How will we stop using cash?

If we accept that at some point in the next 100 years, cash will become obsolete, we can then focus our attention on how we’d like this to happen in a way that benefits everyone, or at least as many people as possible. 

Of course, it’s more difficult to force financial institutions to provide banking services to everyone than it is to force companies to accept cash – disrupting the status quo is more difficult than maintaining it. But this doesn’t change the fact that the situation will eventually change, one way or another, and it would be far more productive to take a lead in positive change than simply to mitigate the negative aspects of change.