Hardly a week goes by without a story about a future cashless society
or the importance of removing high-denomination notes from
circulation. A voice of dissent has now risen from Ohio State
University in an opinion by economist and research scientist, Jay L. Zagorsky.
The Conversation, an online academic
journal sponsored by a consortium of leading research universities and
charitable foundations, Zagorsky argues the opposite — that we should
bring back the $500 note and other large bills. Recent natural
disasters, he says, shows the flaws in a system entirely dependent on
electricity. No matter how much money may be in your account, it can
be impossible to access it. The matter is further complicated by
recent security breaches.
Astute collectors find that buying a ‘problem
coin’ can be a bit of a balancing act, but the rewards can be great.
Also in our Nov. 6 issue, Michael Fahey offers some tips on
grading Mint State Barber half dollars.
He calls it a “national security issue,” and enumerates three
pitfalls to the cashless society: (1) Electricity has be available at
all times; (2) communication needs to always be open between all
network components; and (3) the network has to be secure at all times.
All three of these requirements have recently been spectacularly compromised.
Connect with Coin World:
up for our free eNewsletter
Like us on
us on Twitter
One needs only to look at Texas, Florida, and Puerto Rico for power
outages, or the California wildfires for the collapse of cell towers,
or the travesty at Equifax, or the potential for cyberattacks from
the likes of North Korea, for a critical security breach.
Zagorsky writes, “These events show just how precarious the three
pillars of a cashless society are and how quickly they can falter.
When this network breaks down, people who do not have cash are forced
to barter. Bartering is devastating for an economy, in part because it
needs a ‘double coincidence of wants.’ ”
He maintains that the positives of bringing back large bills
outweigh the negatives, particularly during disasters. Higher
denominations are preferable for the sake of compactness and
efficiency. In any case, regardless of denomination, people should
store some cash at home in case of emergency. “Cash,” he advises,
“gives you purchasing power when everything else fails.”