« Freakonomics Radio

261. Why Are We Still Using Cash?

2016-09-29 | 🔗
It facilitates crime, bribery, and tax evasion -- and yet some governments (including ours) are printing more cash than ever. Other countries, meanwhile, are ditching cash entirely. And if Star Trek is right, we won't have money of any sort in the 24th century.
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If you'd like to listen to free economic radio without ads the place to do that is sticker premium five dollars a month and you can get a free month trial by going to stick your premium dot com and use a promo code freak. You also get access to all our bonus. Episodes and you'll be supporting our show to that sticker premium: dot, com, promo code, freak thanks There are a variety of problems, many of them quite serious- that we seem to have much to do with one another, and yet they do problems like this one authority say there's an avalanche of crossing our borders problems like this one. I play seventy five thousand desperate case congressmen. Eric assure you of what this like this one year, providing this vehicle. That's facilitating tax evasion and
This one, it looked like a commando operation, the thieves were lowered, ropes onto the roof of the building. What do high stakes, robbery, taxi and bribery and drug dealing all having common one word cash. so should we get rid of cash in the? U S. At least it won't be easy in part, because the federal government is one of its biggest boosters, absolutely there's a big part. But in Santa some countries, meanwhile, are already well on their way to getting rid of cash. I believe that in five years it's practically a cash free economy and in the more distant future it might not be just tat we ve gotten rid of easy money, doesn't exist in the twenty first century.
from W and Y see studios. This is for economic, radio, the podcast that explores the hidden side of everything. Here's your house, Stephen Abner, If you go back forty years to nineteen, seventy six, It was roughly eighty billion dollars of U S paper currency in circulation. Today is roughly one point: five trillion dollars in circulation nearly twenty times. much which, on the one hand, would seem to make sense inflation right, but her hand. Why is there so much cash floating around when we ve got many other ways to pay for things and here's what even stranger back in nineteen. Seventy six about twenty five percent of? U S. Cash was an hundred dollar bills and now around eighty percent
How much is that the average person would be having to carry around thirty five or thirty six of them in their house their wallet this is every man, woman and child. That's KEN robot murmured, professor of economics, at Harvard University. I work on. What's come international macroeconomics, involves interest credits, exchange rates, trade imbalances, the sexy stuff. In other words, you work on not all of it. So if Rogoff is right, the question is: do you have? Third? five or thirty, six hundred dollar bills in your house, your wallet and even with inflation. How did a hundred dollar bills go from twenty five percent of? U S cash in circulation to eighty percent and is that it thing work well prepared. He figured out I'm going with this. Is it a bad thing? Let me introduce you to James S,
Henry I'm an economist attorney and investigative journalist, also senior advisor to the tax justice network, and your fellow Columbia University Centre for sustainable development and a global justice fell at Yale when Henry It was an grad school nineteen seventies. He went home Minnesota for Christmas to visit his folks, his father was sepia and heat, Tumbled across this unusual fact that there was more than one one hundred dollar bill outstanding for every man, woman and child in the United States, and he said I've never seen a hundred dollar bill. I don't think anybody use for retail purchases. We have credit cards, we have checks in a word. Heck. Are these things? Henry began,
Along odyssey of looking into this mystery at one point, he got hold of some data from the Federal Reserve. One duty of the feds twelve regional banks is to supply commercial banks with cash. Henry could see which regional banks had greater manned for big bills. There's some regions like the MID west that had almost no demand for a hundred dollar bills, but Henry and his colleagues discovered a big difference in other places, What we found was a really interesting patter involving border states like Florida, California and Texas that were basically it turned out here. involved in drug trafficking.
It happens frequently and it happened again last night rescue this one. If I am internationally, most cocaine comes from South America, frequently hidden and ingenious ways. For example, tucked inside trunk, the bars are deleted in Davos and sharing the Americans had developed a hearty appetite for illicit drugs, many of which were imported most of the drugs that were imported from South America entered through my am by the late nineteenth seventys. The drugging Foresman agency declared that florid is biggest. Industry was the illegal drugs trade, worth roughly ten billion dollars a year. James Henry curious about all those one hundred dollar bills went to Miami himself and interviewed law enforcement officials saying well. This really makes sense when you think about it from our standpoint:
stuff is being sold on the street for tens and twentys. They bring it down here and they converted pay it into the banking system and get a larger bills that are easier to ship out. So it was providing the monetary side of the real drug traffic economy, which was just exploding during that last three. Four years of the seventies by now, Henry had come to believe that most big bills in circulation we're being used for one of two purposes. He had published an article in the Washington monthly explaining his theory. The first he wrote is profit motivated crime, illegal gambling, drugs, prostitution, loan sharking, the fencing of stolen merchandise, etc. The second is tax evasion by people who arranged to receive cash income and don't report it and Henry proposed.
That the? U S, government should do something about this. Well, I thought an unseemly and probably, as a matter of public policy undesirable for the USA to basically passively be facilitating this kind of very convenient form of underground activity. He named his proposal calling in the big bill. it would devalue existing hundred dollar bills, essentially forcing people with big stockpiles to turn the men for new bills, Henry idea made a splash in the media and academia. He says and contributed to new reporting requirements for large cash transfers, but it was never seriously considered by policy makers. They just kept printing the man, four hundred dollar bills in the seventies grew more than fifteen percent per year in real terms, and it hasn't stops, the growth in cash. How much the government's issued its just booming? That's KEN Rogue off again they don't work goaded. They don't know whose using it
They know. It's really popular and they like the money. They like the money broke off, says because they make money by making money. Absolutely there's a big profit and Santa so let's understand central bank around by the Treasury and the little bit difficult to say who is getting the money, but in the United States you know we ve been earning on the order of four tenths of a per cent of GDP is about seventy billion dollars a year by printing this stuff in the treasury- secretaries very happy about it.
The Federal reserve. It makes them look like a big profits. Santer, that's a little bit of an illusion, because you're providing this vehicle, that's facilitated tax evasion, which is an order of magnitude, larger, say ten times larger. If you did state plus federal and its also aiding and abetting crime, and if you took into account the human cost, the enforcement cause the tax laws. I argue that these easily swan these visible profits, I mean the way you describe the government's role in the government's attitude and their profit incentives. You make it sound like a drug dealer like we're manufacturing the effort we have our own myth lab it's called treasury and were distributing it kind of to whoever wants it. No questions asked and then they take it. do with it whatever they want to do with that, they use it. They sell it. They give it to someone in a suitcase in exchange for something, and we
I have absolutely no idea what happens to at once. It leaves our our doorstep and that doesn't sound like very judicious behaviour for a federal government like ours when you put it like Am I interpreting your words more darkly than you mean them to sound, or is it really that bad as a government that complicit? While I try to seem sober? But yes, I basically, you know, agree with the town that you put in that. That's why further. It has reverse money laundering, because money laundering you're taking dirty money that you might have gone through a crime and trying to make it so you can spend it without being noticed, make it clean and, of course, the central bank's take clean money,
these hundred dollar bills, push it out into they don't know where, of course, it ends up his dirty money. That is just one of several reasons. Can Rogoff believes that cash should be well nearly eliminated. Here's how he puts it in his book. The curse of cash cash lies at the heart of some of today's most intractable public finance and monetary problems in getting rid of most cash could help more than you might think. So. The basic idea is to look more closely at the role cash, and here I mean paper, currency very narrowly plays and our economy rogoff as been thinking about the curse cash for many years when I wrote my first paper on thus published in eighteen. Ninety eight is a very academic nerdy paper. Looking at cash demand.
All around the world and making the point that it's everywhere, it's not just the United States and I advocated getting rid of large bills, and why was penny wise and pound foolish to print them? these days, Rogoff, is well known in policy circles. He advises the New York FED. He is the author, along with Carmen Reinhardt of the influential book. This time is different, eight centuries of financial folly, which compared the great recession to past financial collapses. But back when robots started his anti cash crusade, he was a minnow, so he was thrilled when he learned the. U S: Treasury Secretary Robert Reuben had heard about robots research on large denomination bills and that he had convened a taskforce and that oh parade, I'm having policies
but he didn't have a taskforce to get rid of hundreds and fifty's. He was saying well at the Europeans. Are gonna have a five hundred euro note. Maybe we need a five hundred dollar bill and that's the kind of policy employment I had rogoff undeterred, kept assembling evidence for why we should cut back on cash. It just plays a huge role in crime. There lots of ways to conduct crime. You can use uncut diamonds, you can go use gold and you can use crypto currencies, but you just can't scale them the same way, simply because these other things are not that easy to go, spend in the economy and yeah crime would go on. People would do stuff. You dont have to cut crime by fifty percent. To make this a good idea. If you think of what we spend on cutting crime cutting crime, five percent is a big deal
and this is not a very complicated way to do it. Cash plays a very, very big Rowan, just a whole range of crime, drugs, bribes, extortion, Hume, trafficking money laundering. Can you quantify the amount of a global bribery every year you now? There are great estimates. The world Bank braved estimates in the early two thousands came up with a trillion dollars a year in global bribery and other things, which she now is more complex. But if you look at elite immigration, that's really driven by cash that employers are able to pay cash that provides the magnet that brings people over. I favour much greater legal immigration. by the way, but if a nation wants to control immigration, certainly cash plays a big role.
Other problem exacerbated by cash tax evasion, the? U S, tax gap, that's the difference between what's owed and what's paid in was as of two thousand six around four hundred billion dollars or two point: seven percent of GDP. Every time someone gets paid in cash, whether there. A drug dealer or a plumber or respiratory. That makes it a lot easier to avoid paying tax. It's not like getting rid of big bill, suddenly going to make tax evasion go away, but the numbers are just staggering for the costs of these things and if you get caught tax evasion by say ten to fifteen percent and cut crime even by a few percent. I argue that would be a big win over the purported gains from these mass quantities of cash that around Rogoff is not arguing for a totally cash less society. I called the last cash society,
if you accept that cash promotes tax evasion, illegal immigration, all sorts of crime. You might think that robust argument is not at all contracts you might think no one. Besides drug dealers and dictators, maybe government treasuries would object because cash is wonder, when invention as it was in as well as its served us for centuries, has come to feel a bit into to move in the twenty first century. Any think we'd be eager to see it, though. Alas, if that's what you thought, you would be wrong. There are a lot of people who see cash very differently, then harboured economists like can rogoff on Amazon COM, for instance, his book has a disk fortunate share of one star reviews. Here's a typical one: cold hard cash may allow criminals anonymity, but it also affords honest law abiding people, the freedom to live their lives outside a shaky and corrupt bank system
beyond that, why should honest people not be allowed anonymity? The day we go cashless, the government will be able to track your every move. This is nothing more than sheer proper and to enable the money powers steal from the little people can. Rogoff is not blind to this concern that the privacy issue is a huge one, and my view is that there is a trade off and you have to sort of draw the line between you. Dont want to allow big, repeated, anonymous wholesale transactions by big operations by big tax evaders, as somebody wants to do something for a few huh four dollars. You totally want to allow that. This is a concern that, when I first wrote my peace back, ninety seven as I really didn't, really have James Henry again. It was,
period in which show pervasive governed spying. Wasn't such an issue. I guess I am more sympathy now with the idea that many citizens might feel about stay out of our affairs. when I have some large bills on hand that no one We have em in officious, not necessarily a bad thing to have some financial privacy if you are the The person who objects to a less cash society on privacy grounds. You will almost certainly hate Rogoff. Following argument he thinks one of the most important reason to get rid of most cash is that it would give central bankers more control over the economy. So right now, interest rates are stuck at RO, and there is certainly a lot of economists and central bank researchers who argue that at the peak of the great recession, it would have been nice if they,
but have cut interest rates even more than they did a lower zero. Maybe to minus two to four percent, to try to just jump start the economy keep inflation upkeep employment up that! That's not something you do lightly, it's not something you want to do, but if you have growth collapsing, if you have inflation collapsing in principle, it would work widen they do it. Why didn't they even really considerate?
They didn't do it because there's paper, currency and central bankers rightly worried that if they said interest rates really negative and people thought they would sit there for a long time there be this mad into cash, which would first of all eviscerate the policy, because interest rates wouldn't go down and, second of all, you know cradle all kinds of chaos. With that much cash floating around. When the Wall Street Journal published an excerpt of robots book covering this idea and the comment section exploded with charges of state is and worse. Rogoff is a dangerous apparatchik when come into rope. He is in his own underhanded way, calling for a dictatorship.
that would have done well in communist Russia or Nazi Germany. Again Rogoff is relatively undeterred. He stands by his idea. Well, I think it's always hard to move the status quo and I think a lot of the casual objections that people given over the years are pretty to professional. When you think about them, not all of them. I mean there's some deeper ones like privacy, which are trickier, but I think their answers to those two robots plan for less cash society would need to be carried out gradually and thoughtfully. So the specifics of my plan are two first phase out large notes over a fairly long period would start with hundreds than fifties than twenties.
think of that taking place over ten to fifteen years. I would leave the smaller notes around just because we are still far from solving perfectly some of the problems about what to do in a storm privacy, small transactions, you Sand drew near to the store for candy and don't want to give them a credit card. I would eventually also face those out robots, would eventually replace small bills with coins again making harder to carry large amounts of cash. Now, the whole idea is to make it hard to carry huge amounts around tat, huge transactions and a third principles you actually have to provide for finance. Conclusion to make sure that poor, which are particularly reliant on small bells and cash, have other means. Do thanks give people subsidized debit cards, they ve done this and other countries
I think it's actually rather easy and relatively expensive to introduce some Dave and Smart phones a lot of the objections. I think if people think it out, maybe they'll feel there a little less compelling everyone feels they have a very intimate relationship with cash and they start to have an idea off the top of their. Had a minute. What if we have a storm and there's no power? How would I pay you know what, if I don't want my spouse to know that I bought something for you know that kind of thing everybody hazard, a question off the top of their. add, and if you you think about it, a little more of these can be answered, but it's something we that's very intimate. That's one of the reasons you have to move slowly at the moment, robots dream still feels a bit like a dream. Recent America, but L Where forget about a less cash society, they are rushing Headlong toward getting rid of cash entire, so coming up on economics, radio we check in with Sweden,
Increasing became more and more difficult to access cash. We check in with India There is actually in a unique place, leapfrog on payment technology and made the economy less and less on gas, and we check in with the future when the cost of most things ass converge. Two zero thanks to the use of robotics and automation, then do use of money has become obsolete. I'm Stephen Dublin. This is economic radio, If you were not paying attention to the news coming out of Sweden in September of two thousand nine, you might have missed the story. A group of
very well organised criminals had decided to rob a cash depot in the southern parts of Stockholm, that's Nicholas orbits and social. Professor, through an institute of technology, Sweden, a cash depot Arbutus, tells US warehouses and distribute Sweden's currency kroner or in english crowns. So this was a place where it was not the case. The thieves were ambitious: they had stolen a helicopter, they were good planners on the roads leading to the cash people. They laid down spikes to prevent police cars from reaching them, and they also put fake bombs on the police helicopter when they discovered a package, reportedly labelled bomb lying next to the aircraft they wanted to use the police. I she were scared to use them. flew their stolen helicopter to the cash depot. Just before dawn on twenty three of September
it looked like a commando operation, the thieves we're a on ropes onto the roof of the building three the whole through the roof answered, a building police, were alerted after several explosions were heard, coming from the used explosive and shame songs to get into the six they got around Forty million swedish crowns Five million. U S dollars, they look, the money into the helicopter. What they did them was actually they dropped the money in a late, so approach picked up the money, then they landed helicopter away from that area, and this is where the stolen get away. Helicopter landed in fields in the northern suburbs of the capital and just left it there and drove away with runaway cars. Most of the thieves got away. some of them, of course, but the money was not recovered and people they caught the course get into debt. But they didn't say where the money is. Pseudomonas.
gone orbits. It says the heist had a profound effect. This really took Sweden with a big surprise. I think tacit aid. The things we have seen in Hollywood movies, but never thought could happen in reality. It was also the most dramatic a string of armed robberies in Sweden, not just banks, but retail shops, even city buses were being robbed. The lure of cash was obvious at this intensified is debated. This made many people say that enough is enough and we can't have cash anymore. It's not safe orbit and has spent years studying payment systems in general and particularly how to get rid of cash when it comes to money? Sweden has been on the leading edge for a long time. The swedish central bank into sixteen sixties was one of the first central Bank selection issued paper money by the states in the nineteen seventies,
Swedish banks were an early adopter of information technology which changed how companies paid workers. So they talked with the industry and decided together that wages and salaries were to be paid directly into bank accounts instead of being paid out in cash, but the nineteen nineties with debit and credit card. So prominent swedish banks began to phase out checks. The banks should fees on checks on that basically kill the whole check service in Sweden. So today we we dont use checks. At all, Arbutus says: Sweden's progress on electronic payments had stalled by the mid two thousands
they have to the global financial crisis. Then came the wave of robberies. This cost a lot of trauma for the people working in these buses indies, retail shops and and in these banks. So the union started think that well, should our employees really have to suffer. This swedish unions began to campaign for currency reform. They started as something that called cash free. Now they station people next to ATM Swainson, Sweden and to talk with normal people. I just want to withdraw cash from the items as taught her to inform them about the risks of caution and so on the sweet government, meanwhile decided to phase out the thousand krona bill. Its largest denominations worth a bit more than a hundred. U S dollars, but Arbutus says the private sector has been more aggressive banks, for instance, have been shutting down atm sorts, increasing,
became more and more difficult to access cash. The banks also created a mobile payment service called swish. It's a smartphone at that lets. You transfer money almost instantly, so the money sexual chance would win two seconds from one bank account to another. This feature known as real time. Clearing is vital to replacing cash. We ve been talking about various disadvantages to cash relative to electronic payments, but think of its advantages, caches portable, its fungible, its instant Nicholas orbits, and says that swish has replicated these advantages so well that cash isn't as necessary. One way a measuring how much cash we use his cashing transits in relation to GDP and for Sweden did. That number is, is less than two percent. I think the corresponding figure for the? U S, but seven percent and for the EU
area is even higher around nine percent or so, and it could actually. That this number solely with old. I think because the decrease of the use of cash is so quick now, just last year, the amount of cash circulation decrease by over ten percent so decreases very rapid now so rapid, in fact that orbits and believe Sweden, the first european country to issue government back paper currency may be the first one to get rid of it. I believe that in five years somewhere around that its possible, I might even We like you, that we are in a situation where the use of cash is so little that it's practically free economy in its push to minimize cash. Sweden is hardly an outlier and the rest of Scandinavia is moving in the same direction. For all the reasons we,
been hearing, including can roll godson Jeems Henry's arguments that cash is much more use the criminals in any one else. It's also happening swear in Europe, France and the Netherlands in particular, and all over Asia. Singapore central bank is pushing commercial banks to do away with cash. South Korea wants to become a cashless society by two. Twenty and has a plan that, even when someone uses cash to make a purchase, the change they get would be deposited in to the customers electronic account. What all these countries have common is a long and robust history of electronic payment technology would certainly helps if you calls to phase out cash they're all also relatively rich and relatively small, but what about a country without that history? it happens to be very large, and that has a lot of poor people. There is actually no, you need a place to leap frog on payment technology and made them
we demand less and less on cash, and that is now Legally speaking, nearly Connie an indian billionaire who cofounded the ITA consulting firm in phocis, his two thousand eight book. Imagining India offered a road map for India to thrive in the twenty first century, Neil Economy, was asked by. Then Prime Minister Manmohan sing to set up a modern identification system for indian citizens along the line. How the Eu S introduce the Social Security card back in the nineteen thirty's, they needed an eighty for everyone to sort of keep track of their contributions and their entitlements through their life and fundamentally India. Was it a similar point where millions of people are getting benefits, but because they don't have a strong eighty system does a lot of restage leakage and corruption. The new system called odd Har led to a billion people getting an official idee in just over five years, but it's more than just a social security card. It's a technology platform with biometric identification there, among others,
helps individuals and institutions seamlessly transfer money to another. So when go, When gives any kind of subsidies or entitlements they can elect? ironically road rooted into the bank account of the recipient using other. Today that system, has done all a billion transactions only in the last three years. Now that's the first step because whence money comes into somebody's bank account, is already sitting in an electronic account and therefore it is cashless, but today because the rest of the economies cash people go to what is called a business correspond until an agent of the bank and re more physical Paypal cash out of their accounts. Now, there's a way. And we can get them to retain their money in their accounts and gone that cash Leslie then automatically the road to the capitalist society instead
nearly Conny has been trying to make this happen as an adviser to the National Payment Corporation of India, Nonprofit set up by Indian Bay to modernize their payment system. Their launch many payment systems for me they may say the aims, mobile payments and all like now- they're working on the unified payment interface or you pie, you guys, are regularly fraud on mobile payments, I need it nine, for instance, debate an instant credit, which means that that's that I'm being a merchant five thousand rupees at the shop. I say If I thousand then automatically my account gets debited in real time and the margins. Account gets credited in real time now this by the way. This is Such a system don't really exist, for example, in the: U S, it's a big deal, it's a big deal. Nearly cunning says because it's fast secure, flexible and cheap,
we are building a system for every bank to talk to every other bank, ruining hey man, instant debit and credit, with very no transaction costs this system, doesn't exist anywhere else in the world, sending and money from your mobile phone. We react nonetheless ending receiving a text message or an email, and we think that with yes growing smartphones holiday. India has two hundred million smartphones expected to grow to seven hundred million one billion. but with the other high number and the government pushing everyone to get a bank account as part of financial inclusion on these things are coming further to free it sort of a tipping point which we think we'll leave to dramatic surgeon. Cashless transactions in as a massive underground economy by some estimates, is because half a trillion dollars a year once you how it is to the trail. Obviously, it's fun
what are we gonna? Do? Money laundering are wiping taxes, but I think the biggest thing, in favour of going cashless is that now my digital behaviour of payments? I can now hardness still get alone and I think That's a huge thing in all. Typically lawns arguing against assets, and we don't have any assets, but once you have their payment Three, then you can you launched against a cash flow because that there were certain earning capacity and therefore you know that they can be the loan back. So I think I see that credit Fordable convenient credit is the killer up of making a sick country cashless. Nothing that benefit will start all writing thing is, but having said that, I do know, this is not a one year kind of a project. This is a project that will run over decades. I said
it'd be many. Many years before we go to truly cashless in a large country and in this spirit, Countries like India, with a billion people, whereas certainly now smaller country, like Sweden or Estonia, which are just a few million People which are highly homeward assign well educated. They can broadly do the transition much faster, According to a recent report by the Boston Consulting Group in Google in developed countries, cash contributed to just twenty to twenty five percent of overall consumer payments. In India that number seventy eight percent, but report notes that number is falling fast in India and non cash transactions. overtake cash than about seven years or so so. If current trends continue, most countries will become increasingly less reliant on cash
but what about getting rid of money entirely? If science she has any guide that will happen, but not for a few centuries, money is incredibly useful, it's probably one of the greatest inventions is so my name is menus idea and mostly right about the future. Just published trick economics, the economics of STAR Trek the original series of STAR Trek, which began as a tv show, fifty years ago, inspired several movies we set in the twenty third central. They used a currency called federation credits, the name federation credits and credits, is what every science fiction universe uses the all colleagues, credit and Babylon five. Its credit
in star wars. They talk about empire credits, to Saudi, on the fact that most science fiction writers resort to the generic term credit shows they weren't thinking too deeply about the future of money. Because, if you get into the details, you would try to call something else, but in a nineteen eighty six STAR Trek film something interesting happened, so in start work for the voyage home, the crew of the enterprise has to travel back to the twentieth century too. Rescue to bring a bunch of Wales into the future to save earth, because earth is under attack by a probe. Dad is trying to communicate with Wales. It sounds ridiculous, any kind of is, but there's this famous see in a restaurant, where Captain Kirk always Ladies man is trying to convince the biology.
To let him take the whales and she days him to a pizza joint in San Francisco. I'm all ears ok I am from what on your calendar would be too late. Twenty threerd century I've come back in time to bring two humpback whales with me in an attempt to repopulating species and at the end of the meal, the when the bill coms Diabetic felt sure who gets the battle don't tell me they dont use money while it is, she has to pick it up because of you, Sleep Captain Kirk doesn't have money and they don't have money in the twenty first century. So it's played for comedy here and it works really well because
actors are fantastic, but it's also the pivotal moment. I think to me for the economics of the future He says that what began as throwaway jokes, but a future without money became the entire social and economic Foundation for the next instalment of STAR Trek. The next generation which takes place in the twenty fourth how much is being caused by economic. So the future a somewhat different you see, money doesn't exist in the campaign, acquisition well, no longer the driving force, and we work to back up the rest of your manager. None of the behaviors tat we know,
we associate with market economies. Have currencies in the twenty first century is also no poverty or famine is an abundance of every This is largely thanks to the miracle machine known as the replicator and the replicator is a mission that in materialise. Anything you ask of it. On the spot tomato soup, there are fourteen varieties of tomatoes soup available from this replicator rice, vegetables, boldly and style, with pasta, with plain specify how more child hot hot playing tomato soup. It is lost metaphor for mission and robotics. The replicator is the last machine there's no better machine than the replicator. The other thing about the replicator is that it is a public good. So what that means is
it is not excluded, bull and non rival. Anybody can use it and nobody can put any kind of tall are barrier. to its usage and your usage of the replicator doesn't prevent anybody else from using it, as well as utopian, as that sounds saudi, use that it's not necessarily impossible, based on a reading of the present some sectors of the economy. Today, technological set the economy are no longer relying on monetary exchange I mean one of the most striking examples of that is the gps. The global positioning system with this is something that a society about a billion dollars a year to operate, so basically it's nothing and it creates an amount of value. That is absolutely commensurate to its annual cost and its
feel free to use by everybody. There are more than three billion PS receivers active in the world that any one time. So you can see in non monetary part of the economy develop alongside the regular might every part of the economy, the market economy. So I think that where there is no scarcity, there's probably know. for money. That's how I see it. I believe that the use for money will become less and less prevalent, in the meantime, in the real world we are still too king about doing away with physical money. I find money fantastic, I am a complete. Of all the various types of bills that you can find in the world in this regard Manu, idea is not alone I think the indian currency is quite colorful reaction,
I want you knew bills and coins in Sweden. So now it's not kings royal people, it's famous swedish people in currency. As on the major indian languages. On it I mean they're beautiful yes, indeed, even Sweden, the country that seems to be winning the race to a cashless future these reservations about getting rid of cash, Nicholas, orbits and again, we made a study about two years ago with worry into one thousand Swedes that Europe Representative sample of the entire population of Sweden and there Two thirds said that they think cash is a human right. So it was very, drawing sentimental feeling today, cash. It is a human right. Access cash, while at the same time see that no one is or fuel few and very few today are using cash. How this is Interesting paradox. I think there's something related to that count.
is a symbol of the state of Sweden and people like that. We like the national team in ice hockey or football player games. We feel like sweets and it seems like it's a thing with cash we feel like sweets. When we see Sweden cash, even though we do not use it. Frigate. Radio is produced by w when my c studios and W productions this episode is produced by Gregg results are also includes Burgundian, J Coward Merit Jacob Christopher Worth Caitlin Pierce, Alison Hockenberry. Emma Morgenstern and Harry, haven't you can subscribe to this point, on Itunes or reverie, get your podcast and please come visit for economics, DOT Tk
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Transcript generated on 2021-01-24.