Cooking the Books: Abolish Money – But Not Now

Socialists want to see money disappear, because of the rationing it means for most people, but only as a consequence of the establishment of the common ownership of the means of wealth production. This, in enabling production to be carried on to directly meet human needs, would render money redundant. With the end of production for the market and of buying and selling, there would be no need for money.

We do not envisage the ‘abolition of money’ with nothing else changing, i.e. its abolition while the rest of the economy remains capitalist. That would lead to chaos and hardship, as was seen when at the beginning of November the Indian government suddenly announced that all 500 and 1000 rupee notes (worth £6 and £12 respectively) still in circulation at the end of the year would be cancelled. Since these were used to carry out some 85 percent of cash transactions in India this was tantamount to abolishing 85 per cent of money. So as not to lose out, Indians had to exchange any such notes at a bank by that date.

Marx once remarked that, while no kind of bank legislation could eliminate a money crisis, ‘ignorant and mistaken bank legislation’ could intensify one (Capital, Vol. III, ch.30).  What happened in India has proved his point.  According to Ed Conway, Sky News’s economics editor writing in the Times (23 December), as less than half of Indians have bank accounts, this measure, aimed at catching tax dodgers and money launderers, hit the poorest half of Indians the most:

‘The real victims of demonetarisation are not wealthy ne’er-do-wells, who long ago shifted their money out of cash and into other currencies and assets: gold, Treasury bonds, apartments in London and New York. No, the real victims are, as so often, the poor.’

So, no, we are not envisaging the abolition of money within capitalism.

Meanwhile, in a more advanced part of the capitalist world, in Seattle on the West Coast of the USA:

‘Amazon has unveiled its first bricks and mortar grocery store, which does away with tills and queues and lets shoppers grab what they want and stroll out’ (Times, 6 December).

That’s more like what we envisage happening in socialism, except that, under capitalism, it is not as simple as that – the shoppers still have to pay in the end:

‘Shoppers will be billed using an array of cameras and sensors tracking their every move … Customers will need to download an Amazon Go app and tap in with their phone at special barriers when they enter, then they can take what they want from the shelves and walk out. When a customer leaves the shop the app adds up their purchases and charges their Amazon account.’

No doubt, in socialism, in some stores in some parts of the world, electronic devices will help stock control by automatically noting what has been taken, but there will be no need to record what each particular individual has taken, only what has been taken in total over a given period.

Conway, whose article is headed ‘Cash belongs in the past so let’s abolish it’, favours a cashless society because this would be ‘a hammer blow to the black market and the corrupt criminals and cronies who benefit from the anonymity of paper money.’ But the price would be an increase in the surveillance state in which the authorities would be able to know how all of us spent our money. Besides, some geniuses have invented an anonymous electronic money – bitcoins — another waste and misapplication, alongside Amazon’s app, of human ingenuity and IT brought about by capitalism.