VIRTUAL MONEY TO END CRIME?
By James Nathan Post
Having been raised among research engineers and science fiction writers, I am no Luddite, and I was encouraged when young to learn social extrapolation of technological advance. Having long written about the increased socialization and loss of privacy due to advances in information technology, one of my pet horrors has always been the supplanting of bearer-paper specie with abstract electronic or virtual money. As a thirty year veteran of the Drug War, an outlaw, I long ago recognized the war is promulgated in spite of clear evidence it causes more damage than the drugs it prohibits because it entitles government to impose surveillance and control over our personal transactions, and upon global transactions influencing the economy of nations. It is a war on privacy of person, privacy of possession, and privacy of transaction.
Proponents of the increased use of electronic transactions point out that credit card transactions are accountable and trackable, whereas cash can be used for illegal trade, as it leaves records only when traded with a government-accountable financial institution, which practice is called money laundering. Among proposals offered by those writing software for the highly secure accountable virtual money is the establishment of a cybernetic Federal treasury and the exclusive use of its "universal bank account" for all transactions larger than pocket change. Everyone would have a FedCard number, and the Federal Reserve Note would be abolished. An IRS audit of our affairs could be had at the touch of an enter key, daily, by those so authorized.
The system probably would look good to those who are very close to people in high offices. Because they know them personally as intelligent, trained, dutiful, sensitive, honest, clean, and reverent individuals, they are more inclined than the man on the street to trust that the system they administer will benefit the masses they "represent." It would look good, and quite certainly BE good for the great majority of legitimate businessmen, and the worker masses they employ. It would certainly look good to anyone who believes law enforcement should have the best, as the power to "follow the money" is the best tool law enforcement can have. It seems clear to me, however, if any agency had the power to observe and control everyone's every transaction, then everything would effectively belong to that agency, to do with as its policy dictated. The elimination of free exchange of personal assets in favor of the "crime-proof" universal-bank-account system would immediately make its trustees the de facto rulers of the world, and would create a huge, hostile, and of necessity resourceful underground.
The virtual money of FedCard would be wonderful IF it were possible to make its accounts anonymous, and IF it were not the tool of tax collection, and IF it were not the tool of law enforcement. If spending e-money entails identifying yourself and your location, then no one wanted for anything, behind on payments, fitting a profile, etc, could use a FedCard without thereby giving himself up to the law. Though it is easy to say administratively that their debts are lawfully collectable and their accounts in suspension or whatever, people do not stop eating when their case file is closed by the aparatchiks or by subroutine 86-U2. The "unaccountables" will find some way to survive. Far from eliminating all the criminals, this policy (like Deadbeat Dads) would force people into the criminal underground who might otherwise be leading productive even if furtive lives.
For small transactions, we would clearly still require some kind of "coin of the realm." This would be of greater worth in the underground than as the pocket change of the regulated and socialized class. This dichotomy would create the opportunity for lawful citizens, that is, those with accounts in order, to get more for their pocket money by trading with outlaws, who might thus be encouraged to steal things. It would also create an incentive for the otherwise peaceful outlaw to rob the accounted citizen of her coffee money.
Barter media would be spontaneously created, and like the stock market, would be faddish. Lots of things would quickly become media, perhaps like Beanie Babies, baseball cards, or CD's. Among the hippies, beadwork, embroidery, hash-pipes, and the like often took the place of FRN dollars that required somebody get straight employment. At one time many cocaine dealers were using Indian jewelry as a kind of medium to avoid having to carry cash.
Highly desired illegal drugs become a kind of medium of themselves, even though consumable. This is one of the principal factors in their successful distribution even under Federal persecution. Guns and ammunition are better than gold, because the underground will constantly be persecuted by law enforcement, by virtue of being hated and feared by the successfully-lawful class, and violent confrontations are likely to be common.
Another group of outlaws would be those among the accounted who chose to trade in something prohibited by the legislators, regulators, policy makers, executives, boards, committees, parliaments, and consultants with the authority to input the FedCard program. It would be a very large group, from gutterscum to Trustee. The vices have always thrived, and it has always been in the interest of some who proclaim them vices to see that they do. Even in prison, there is a thriving market for most of the common drugs. What fifty million Americans want, someone will find a way to sell to them.
As we are seeing in Russia today, those who are experienced in dealing forbidden products, that is, the criminals, may know best how to operate in a free market, which happens (only?) when the structure collapses. Those who are experts in the protectionist rules of a regulated market may be disadvantaged when their system of regulation fails, just as those who have all their lives enjoyed the services of the pharmacist may be disadvantaged when the drug kingpins ...I mean, the pharmaceutical manufacturers... fail, and folks are left to cope with whatever personal immune system they have developed growing up dependent on the state's patent medicine. A widening schism would be created between business/government/police folks, for whom the system would be the fulfillment of their dreams, and the millions at the bottom of the pyramid who already struggle pragmatically with the reality of living outside the law in order to survive, for whom the FedCard system creates a police state.
The advantage in that survivalist underground economy would be with one who understood the marijuana market, and had succeeded in operating a multi-level product distribution system. His motivation would have to be altruistic, the distribution of needed and desired products, and the result would be market communities like secret clubs, adept at sleight of hand. However, the need for someone in the underground to interface with the accounted economy through illicit accounts at FedCard, that is, to launder the money, would give the advantage at the top of the pyramid to the most self-serving and deceitful.
The notion that totalitarian accounting of everyone's transactions and properties, and control thereof by regulation may fairly be called "free enterprise" is like saying even in prison there is freedom to obey the rules. It "levels the field" by prostrating all. If government, at the point of an officer's gun, can declare what you may possess, which assets you may trade, what the price must be, and how much you must pay in tax for the privilege of trading (as it does today), then the only free enterprise is the underground. Only there can two private citizens agree upon the relative worth of their assets and contract to exchange them freely, without a government agent standing in the middle dictating the terms of the deal for a fee.
The way into The Empire Bank opens with the big sign that says TAX. If the system is used to collect the tax, then the government may legislate how the FedCard software treats its account holders. If taxation were to continue to be item-specific and regional-specific, then every possible product or service would require an identifier code, a location code, and a tax rate. The resulting World Blue Book would be the equivalent of a global price-fixing tool. It would necessarily have to be very fluid, with perhaps thousands of authorized terminals constantly updating the values of some category or other, or the consequences of some new legislation, or the recalculation of some index. Even with cross-tracked mirror sites as a safeguard, somebody must be able to enter "legitimate" changes to the database. The right or ability to access the database for selective marketing purposes would be more valuable than blood, and black-market FedCard data might itself become a medium of illicit exchange at a certain level of society. The power to input that program is to drink from the Holy Grail while wearing the Ring of the Niebelung, wrapped in Superman's cape. People will kill for that power to bankrupt competitors and topple governments. The opportunity to trade an important oil evaluation fix for a crop of cocaine to distribute for the swing vote of a demographic group might make a kingpin of Colombia's elected and trusted delegate to the Board of Trustees, and a President of its Chairman, and not leave a track for the bean-counter robots to follow.
The door slams shut with the big sign that says ILLEGAL. Once the system is in place for taxation, its potential for use by enforced authority makes the word totalitarian seem pale. Gum is illegal in Singapore, raw eggs in California. The gun you bought at Sears last year is illegal now and must be surrendered. That book has been declared obscene by City Ordinance, and the cash registers in this town won't sell it. It is not forbidden to publish it, but it is impossible to buy it. Everything in the WBB (and every imaginable illegal thing) would require a legal category identifier, and every person's legal category would be checked with every purchase. Felon? Can't buy a gun. DWI? Can't buy beer. Driver's license expired? Can't buy gasoline. Business license expired? The Master Control Program will not permit deposits to your account.
Today's Internet market is evolving many systems to do something like virtual money, but without eliminating national bearer-paper specie, based on those usurious wonders of the 20th century, credit card accounts. Science fiction paranoia aside, it is clear we will use it more and more in this century. I think also that we will all soon have a telephone with a global-locator and bank-card we carry like a driver's license (or wear like glasses), and its built-in skin-resistivity meter will tell the ATM, or the ATF, how we feel about the questions it asks us... and you can't lie to it. That'll stop crime for sure, and then we can enjoy a little peace and free trade around here.