Cooking the Books: Cashless but Not Profitless

‘Apple’s latest ambition is to rid the world of cash’ reads the headline in the Times (20 October), reporting Apple’s chief executive, Tim Cook, saying ‘we would like to be a catalyst for taking cash out of the system.’ The prospect of a ‘cashless society’ has been held out before. Apple’s plan is that people should use its smartphones to pay for things instead of cash or a cheque or even a debit or credit card.

A cashless society is not the same as a moneyless society, for a reason hinted at in a turn of phrase used by Christopher Burniske, described as ‘an analyst of digital currency’:

‘Apple’s is building a payment structure where you can use all kinds of digital means to transfer value.’

Actually, transferring value is not a bad way of describing one of the functions of money, that of being a means of exchanging values.

When something is bought (and therefore sold) what is happening is that the ownership of something that has ‘value’ is being transferred from one person to another. Money is the means through which this is done. In this transaction money represents a value that is transferred from the buyer to the seller in exchange for something in principle of equal value. The buyer will normally have acquired the money by themselves having exchanged something for it.

Things that are bought and sold (Marx called them ‘commodities’) have value because they have been produced by work, their value being the amount of necessary labour embodied in them through the work of the series of workers involved in their production from start to finish. At one time money had intrinsic value itself as a product of labour, that involved in mining, transporting and refining the gold or silver and then of minting these into coins. So exchange really was an exchange of real things of equal value. This time is long past. For over a hundred years now, ‘money’ has been paper (and with the new £5 note plastic) and metal tokens for value. These still represent value even though they have no, or not much, value themselves.

Now that the electronic technology exists there is no reason why cash could not be replaced by digital money. In fact it already is to an increasing extent. It is doubtful, though, that it will ever completely replace cash. In theory it could, but a cashless society would be not be a moneyless society.  It would be a society in which cash had merely been replaced by a digital currency. It would still be a buying and selling society where goods and services were produced for sale on a market with a view to profit. It would still be a society based on the ownership of the means of wealth production by a tiny minority with the non-owning majority being forced to sell their mental and physical energies for a wage or salary. It would still be capitalism.

But what a waste of human ingenuity and IT that could be more usefully employed to help organise the production and distribution of wealth to meet human needs in the non-market, money-free society that socialism will be. Apple’s real aim of course is not so much to help a cashless society emerge as to make a profit from selling the devices it makes and the apps to use them.