Cryptolawyer, decentralizing the things.


Your Secret Right to Cash

94714785-8083-4176-bdd7-86baada5150a (1)

Secret rights are like the law of gravity. We’ve never had to have a law that ensures that people don’t end up floating up into space against their will. Why? Because gravity has been working all this time, and no one has made defying gravity so easy that it starts happening accidentally or to people who didn’t willingly step on a plane or a rocket. And if that day came, where suddenly gravity wasn’t working well, I’d hope we’d have an open debate about it. Maybe we would decide that things are OK (float on fellow humans!), or maybe we’d decide that it’s government’s business to make sure that, as much as it’s possible, gravity or a gravity replacement continues to operate as it once did for the good of the people. But at the very least we’d have a debate. For now though, just because there’s no constitutional amendment describing a right to not float off into space doesn’t mean we might not have that secret right.   

And I think cash is one of those secret rights. Cash transactions are basically impossible to prevent ex ante, you can criminalize them ex post (that transaction was money laundering, this transaction was financing terrorism—now you’re going to court and then, maybe, to jail) but it’d be extremely difficult—nigh impossible—to stop or censor every one of those “illegal” transactions before they happen, because you can’t bind every person’s hands and glue every person’s wallet shut on command. Cash, by virtue of its technology (paper bills or gold coins) provides a secret right to not have your transactions censored. Cash makes prior restraint physically difficult to achieve (constitutional protections against prior restraint aside).  Cash is also pretty good for privacy because there’s no camera that can capture every movement of a dollar bill every time it moves; it just wouldn’t work.

And before the widespread adoption of electronic transactions in the 1970s and 1980s (not so long ago when you think about it), there was never a way to organize a modern economy or society without cash. It had to exist and did exist. A law prohibiting cash would have been like a law prohibiting breathing; how will we have trade, how will we support causes and organizations we believe in, how will we save for our children’s future?

But then we got electronic transactions, which (cryptocurrencies aside) always go through a bank, company, or other Reliable & Trusted Third Party™ and suddenly you could have a vibrant economy without cash, but the thing is… all of those electronic systems can and do censor transactions and they do reveal tons of private information—potentially private information about innocent citizens—to government and big corporations, ripe for bulk collection and sweeping analysis… (Bitcoin and other cryptocurrencies excluded) they just do; that’s how they work.

So now we have this ability to get rid of an older technology we never thought we’d be able to do without, and some people argue aggressively in favor of that modernization, as if it’s just about progress and common sense. But that transition wouldn’t just be about efficiency and innovation, it also would mean giving up censorship resistance and privacy, trade-offs that look more like issues of human dignity than mere matters of the market.

And while usually we have a vibrant literature about the merits and liabilities inherent in choosing to give up or protect an individual right, there’s basically no literature about these secret rights. Show me the law review articles about the right to uncensorable and private financial transactions. Show me the constitutional amendment or the EU declaration of human dignity as it relates to not having your every financial transaction surveilled by the state or big corporations.  I don’t think that literature is missing because those rights obviously don’t or shouldn’t exist. I think they are simply secret rights we never had any reason to discuss or to protect because they were always guaranteed and protected by the physical nature of the world. They were inevitable (not just inalienable); that is until technology changed the world and altered the presumed balance of power between individuals and society.

Also, as an important note, I don’t believe in natural rights (I don’t think natural rights theorists are silly, it’s just my personal position on that philosophical debate). I do believe that throughout history we’ve found various healthy equilibria when it comes to the rights of individuals versus society, and I believe that some of those outcomes have been good for human flourishing. So maybe I’m what you’d call a consequentialist, we need to identify and protect personal rights in order  to ensure that there are good outcomes for people when it comes to their well-being. BUT! I also believe that we never really know or fully understand the key nature of those consequential equilibria (we’re not smart enough individually or collectively—even via democracy or other enlightened modes of social choice), and that means we never fully understand the nature of the rights of individuals that truly matter in keeping a balance and fostering to good outcomes for society. Perhaps we never fully understand that balance until one of those secret rights disappears without warning, because no one even knew it mattered until it was gone.  

So I think we need a much more vibrant discussion before we go on celebrating the death of cash, or the need for fully identified financial transactions and systems; we may appreciate the advantages of that transition, but do we really know the costs?  And, more importantly, are we actually sacrificing something that is bigger than an articulable and quantifiable economic cost? Are we destroying a secret right?