India Just Flew Past Us In the Race To E-Cash (backchannel.com) 216
New submitter mirandakatz writes: Since India's prime minister banned 86 percent of the rupee notes in circulation last month, citizens have been waiting in hours-long lines for ATMs. But these circumstances have also created an unexpected progression: a burgeoning cashless economy. At Backchannel, Lauren Razavi explores how India is now beating many Western countries in adopting mobile payments, and how demonetization has triggered a radical shift toward reimagining India's enormous informal economy as a data-driven digital marketplace. From the report: "Before last month, Paytm, a mobile app that allows users to pay for everything from pizza to utility bills, saw steady business -- it was processing between 2.5 and 3 million transactions a day. Now, usage of the app has close to doubled. 6 million transactions a day is common; 5 million is considered a bad day. Rather than being forced to idle away time in excruciatingly long lines, 'people are proactively exploring other ways to settle payments besides cash,' says Deepak Abbot, senior vice president at Paytm. 'Now people are realizing they don't need to really line up, because merchants are starting to accept other forms of payment.' All of this has created a newfound system that practically incentives mobile payment. With so many people queuing up at banks every day -- and a lot of Indian bureaucracy to wade through in order to open a traditional bank account or line of credit -- the appeal of more convenient digital alternatives is easy to understand. According to a report in the Hindu Business Line, as many as 233 million unbanked people in India are skipping plastic and moving straight to digital transactions. 'Cash has lost its credibility and payments are no longer perceived in the same way,' says Upasana Taku, the cofounder of Indian mobile wallet company MobiKwik, which reported a 40 percent increase in downloads and a 7,000 percent increase in bank transfers since demonetization. 'There's chaos at the moment but also relief that India will now be an improved economy,' she says."
it's a race for Gold (Score:2)
What's the rush? (Score:5, Insightful)
That's a race I don't want to win.
Re:What's the rush? (Score:5, Insightful)
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Yeah, drugs need to be legal before I can be down with that...
Different reasoning (Score:3, Insightful)
If you don't believe that you are tracked on other purchases you are not doing any homework. Donate to the wrong event or charity and suffer the consequences. Legally you can donate to the Political Party of your choosing, but is that action truly protected. How about donating to the wrong author, artist, public speaker, etc..? Ever see how Professors in Universities get treated when it's revealed that they are Republicans? They may not be fired directly, but you bet your ass that they are censured and
Re:What's the rush? (Score:5, Insightful)
Exactly, I enjoy having and spending cash.
It is largely anonymous, and I find that if I take out my spending money and see myself spending cash and the amount dwindling away off my money clip...it means more to me.
Credit cards and the like, abstract money like chips in a casino do...and I don't find myself fretting over spending nearly as much when money is abstracted in this manner.
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That is the best thing about cash - it runs out. That means if you use cash you don't find yourself accidentally spending too much money. When the cash runs out at the casino it means it's time to go back to your room. When the cash runs at at the grocery store it means it's time to go on a diet. You don't find the vans coming to repossess your furniture if you stop spending money when the cash in your wallet runs out. Cashless means it's easy to spend more money than you should, and easy to spend more
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Exactly, I enjoy having and spending cash.
It is largely anonymous, and I find that if I take out my spending money and see myself spending cash and the amount dwindling away off my money clip...it means more to me.
Credit cards and the like, abstract money like chips in a casino do...and I don't find myself fretting over spending nearly as much when money is abstracted in this manner.
Credit cards are less abstract to me when I use a budget. Start with the amount I can spend for the week, subtract from that each time I use the card and if it goes negative, the next week starts with a smaller number. Admittedly I have a head for numbers (they have a size or weight in my head, rather than just a squiggle representing a value) so this probably works better for me than for some people.
Re: Frugal millionaires (Score:5, Insightful)
This idea that you can't buy something without the government knowing about it leads to the inevitable you can't buy something without the government approving of it. This fear of not being able to trade freely has been around for a long time. The bible had the mark of the beast.
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It is not being smug, it is being free.
You keep telling us that. History though is a better judge than you are. And history is chock full of reasons why such information is dangerous to have.
Re:What's the rush? (Score:5, Insightful)
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Elimination of cash means that VISA and MASTERCARD know everything you're doing, and take 2% off the top of every transaction.
Cashless transactions in India became widespread when a rice distribution scheme was replaced by direct payments to debit cards issued to the poor. Under the old system, about 80% of the rice was stolen before it reached the final recipients. Compared to that, 2% is nothing.
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Cashless transactions in India became widespread when a rice distribution scheme was replaced by direct payments to debit cards issued to the poor. Under the old system, about 80% of the rice was stolen before it reached the final recipients. Compared to that, 2% is nothing.
What utter nonsense!!! I am from India, and I follow what's happening in the country.
You are talking about PDS - Public Distribution System, a version of the food stamp program in US. Yes, there are inadequacies and some level of pilferage, but not like what you describe. PDS is not only rice, its wheat, sugar, pulses, and kerosene.
Less than 60% of the populace of the country has a bank account, that too most of the accounts are dormant. Forget about credit/debit cards.
The current demonetization is
Re:What's the rush? (Score:5, Informative)
The problem is that there are a ton of freeloaders in India that aren't paying their taxes. This is a clear-cut way to track down that money.
It isn't working out that way. If you have over about $10,000 in rupees you need to have an explanation of where they came from. But plenty of services have popped up that, for a small cut, will spread your cash out over many smaller transactions, each under the threshold. Competition has driven the price of these laundering services down so far, that many people with legitimate cash are using them just to avoid standing in line at the bank for hours.
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It isn't working out that way. If you have over about $10,000 in rupees you need to have an explanation of where they came from. But plenty of services have popped up that, for a small cut, will spread your cash out over many smaller transactions, each under the threshold. Competition has driven the price of these laundering services down so far, that many people with legitimate cash are using them just to avoid standing in line at the bank for hours.
The rationale is to uncover the really large amounts of horded cash which would be hard to launder even through such services. A Tax amnesty program that ended earlier this year had people declaring $9.5bn and that is thought to be only a fraction of what the 700,000 suspected tax evaders contacted in the scheme are actually holding. Of course the most significant portion of hidden assets is held in offshore bank accounts followed by property and commodities. It is unlikely that a a significant amount is he
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Completely agreed. Elimination of cash means the government knows everything you are doing.
Possibly. Right now the only one that knows what you are doing is Go..ogle. Might save time?
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... Go..ogle ...
The sexy version of the ancient Chinese board game that's exciting to watch.
Re:What's the rush? (Score:4, Interesting)
It's not even that they know what you're doing. It's that no cash means they can "turn off" all your money. Even now they can turn off *most* of my money, but at least with cash I can buy a sandwich and get some gas until I figure out what's going on.
Just a couple weeks ago I was getting lunch and their card reader was down. Down. Think about that. The place would have done no lunch business, but they take cash. They didn't have the old-fashioned impact reader for credit cards. A lot of places don't. Yeah, they could all get those; but a lot of the cashless people are advocating things for which, AFAIK, such legacy non-electronic alternatives don't exist.
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Sometimes I think we think too narrowly about these things.
What is the government? Anyone who thinks they can, and in practice are able, to impose their will on you. I think we have to worry just as much about the private sector becoming a shadow government, one that knows about and controls more aspects of our lives than any totalitarian state ever did.
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Re:What's the rush? (Score:4, Insightful)
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> Any cashless payment platform leaves an audit trail
Look at any game economy. The population will agree on a stable desirable set of proxy currency and use that for alternate transactions and audit avoidance. We don't even use cash for everything...ever. I don't see what's so scary about an underground economy in some other currency (like Yen or whatever).
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Japanese Pasmo type cards have no audit trail. You can charge them with credit anywhere and they are like a tap and go system but the cards are unregistered to you.
Re: What's the rush? (Score:3)
In the US you'll have to give up something for reloadable cards. Terrorisum.
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Yes in the end they would be able to track it back to the card that charged it. But it would be possible to use them as a cash analogue. ie. Here are 4 x $50 pasmos.
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The point is not an argument against the convenience. The point is the trail it creates.
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So, I can buy a unique Pasmo card but I have to use a credit card to charge it? So sure - my name is NOT registered to the Pasmo card, but it IS registered to the card used to charge it, and thus I am once again trackable. Unless I use barter or cash to charge it. Oh wait...
No, you can charge them with cash at any train station.
Using a credit card is optional.
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I assume he was referring to a post cash economy so even charging them with cash was impossible.
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There is no comparable cashless payment platform that leaves no audit trail. Sorry.
Monero is an example of one.
Unlike Bitcoin, a Monero output transaction is crypographically unrelated to its input transaction.
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Such as associate any personally identifiable information, like a home shipping address, with a wallet ID? Yes, that would be truly odd.
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Well duh.... the person is not even trying to say anonymous in that case.
Fortunately you don't want pay your amazon goodies anonymously and don't add an deliver address.
Step back a bit and make sure what you are saying makes sense.
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You might not care if your amazon purchase of a t-shirt is anonymous, but it might matter for other things (e.g., a donation to an activist organization like the NRA or Planned Parenthood). Once you have tied identifying information to your wallet ID once, you have to assume that association has been shared with everyone.
Contrast that with cash. I can buy groceries with a few $20 bills in my wallet and a saver card that has my name and address and not worry that the other $20 bills in my pocket will carry
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The fact you have to parse 100 gig of blockchain per transaction makes BTC unwieldy.
Fortunate you don't have to do that then isn't it? You only need to check the coinbase (not the company).
That, and there is no real way to anonymize coins. Yes, tumbling sites exist, but there is a good chance you may not get back your coins at all.
Yeah, pseudo anonymous as I said. To add to that if you are paying your power bill they generally know who you are anyway.
However, there are a lot of things that you can do (or just not do) that gives your anonymity away but it is not in a blanket sense, you cant go to any individual transaction or amount on the blockchain and say for sure who it belongs to.
The segwit firestorm isn't helping either, with a good number of clients will soon be unable to parse things.
Can't argue with that. I have no idea why bu
Re:What's the rush? (Score:5, Insightful)
Ah, youngsters.., they forget that an ounce of gold was cash, for example, classic US "double eagle" coins prior to 1933.
Hint: cash is any material object commonly used to exchange value, as distinguished from use for barter between individuals seeking specific items.
"Cashless" is any electronically-based payment system relying upon an exchange of information -- rather than material obects -- and requiring three parties, such as a buyer, a seller, and a payment system. Bitcoin's third party is those maintaining the blockchain.
That three party system invevitably extends to include the government [arstechnica.com], which will demand things like "complete user security settings and history (including confirmed devices and account activity)." Presuming that the information is not public to begin with, as in the bitcoin blockchain.
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Given the dismal state of computer security, why on Earth would anyone with half a brain think that a fully cashless economy is a desirable goal? Depending on digital cash seems to me entirely too much like renting a residence at the base of an elderly dam with water seeping from visible cracks.
Wa On Cash (Score:5, Informative)
That's a race I don't want to win.
Agreed.
There seems to be a general war on cash.
Australia is talking about getting rid of the $100 note.
Europe is limiting cash transactions.
I think there are a few reasons for this.
1- Negative Interest Rates. ie It is better to hoard cash than have it in a bank earning -ve interest.
2- Govts need more tax revenue
3- Long term globalist agenda to have a cashless society so all men can be controlled as predicted 2000 years ago in Revelations 13
16And the second beast required all people small and great, rich and poor, free and slave, to receive a mark on their right hand or on their forehead, 17so that no one could buy or sell unless he had the mark — the name of the beast or the number of its name.
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And let's be honest. We have given up on our privacy a long time ago.
So because we have allowed irresponsible and self-destructive practices to become pervasive, we should just give up entirely and open the floodgates?
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Well beyond that though, there are many cases of legitimate business that have had their assets seized under little known laws that state that a bank must disclose to government any cash deposit greater than $10,000. Banks must also report consistent cash deposits approaching $10,000. Either is considered evidence of potential elicit activity.
The cases being brought to public e
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Agreed. There is nothing wrong with cash. Sometimes it's ok to be a luddite when the technological alternative is stupid.
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Republicans don't trust Democrat administrations, and Democrats don't trust Republican administrations.
And some don't trust either.
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Indian governments don't go after ordinary people as much as their political opponents. Also, the 2nd Amendment is something uniquely American: India has nothing like it. In fact, that's one aspect of US legal tradition that Indians have trouble grasping
Religious profiling particularly in the context of Jihad is something that they more easily do. The ACLU or even a Paul Ryan would have a panic attack if they were in India during a terrorist attack and saw how the Indian law enforcement retaliated. In
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In which case, the GP got his wish
Banning cash is bad news (Score:5, Insightful)
The summary makes it sound like losing access to cash is a good thing, as long as it can be replaced by a number on a server in all cases. It is not.
a post cash society (Score:2)
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Already the case with most of keynesian currencies, aka elastic supply. While not really "anyone" can "print" the IOUs, when borrowing money, reserve banking "prints" those out of thin air.
The only way to make it even more fair would be simply scrap the IOUs and print naked (which is what "negative interest rate"s pretty much boil down to) - but as a basic income.
This basic income/QE infinity hybrid will coincide with immense deflationary pr
"Us" (Score:5, Insightful)
Who's "Us"?
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If you have to ask that, then you must be against Us.
Fine with me, will keep it that way
Doubtful (Score:5, Interesting)
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Not sure how this is marked as interesting when it is completely devoid of any sort of actual fact.
First of all, the summary states 6 million transactions a day. That's over 2 billion transactions per year. Transactions and dollar amount are two completely different things. So how many is Apple Pay processing? The only number I could find for Apple Pay states was that in 2015 they processed almost $11billion
http://appleinsider.com/articles/16/06/01/apple-pay-transactions-totaled-109b-in-2015-suffers-gro
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6M a day is still peanuts (Score:2)
In a nation of over a BILLION population, 6M is a rounding error.
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Apple Pay itself eclipses all of those numbers. 3 million transactions a day is nothing.
Uh, not the same thing
Apple Pay notes down your credit card info, and only works if a scanner is set up to work w/ it. I've still seen it in very few places that I regularly shop: same for Android or Samsung pay.
The e-cash thing described here is different. People put money into their PayTM or other mobile wallet, and use that to pay other people. Like if Kunal wants to pay Manisha Rs490 for groceries, all he needs is his phone, and when he's done w/ his payment, she sees it in her phone as well. An
And it was a complete and utter disaster (Score:2, Funny)
You cashless society morons are staring at the wreckage of India's economy and thinking "boy, this sure sounds like a great idea, I can't wait to try it!"
This was a good thing? (Score:2, Insightful)
Sounds like a horrible thing.
Queue BitZtream bichting about BeauHD post in... (Score:2)
Fuck them. (Score:2)
I use bitcoin.
This probably won't end well (Score:5, Insightful)
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Yeah, what could possibly go wrong?
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Because computer security and how it seems to universally suck.
Now announcing Yahoo Cash! Trust Us(TM)!
What? (Score:4, Insightful)
Who the fuck is "racing to e-cash"?
"Cash has lost its credibility"
To whom? Bureaucrats? Banks? The NSA?
This sounds very much like that contrived "Internet of Things" we're supposed to all need.
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Most people who claim a certain item is obsolete are either trying to sell you the alternative or are trying to justify their own switch to the alternative.
The rest of the story (Score:5, Insightful)
India has devalued its largest denomination bills by surprise, in an attempt to get folks in the "black economy", and this even means professionals like doctors, to account for their cash and stop avoiding taxes. Everyone has a very short time to deposit the old bills in a bank, or lose their value.
The problem with this is that because it was a surprise, India did not print new bills first, and does not have the capacity to print them at anything near the number required.
So, right now many businesses are shut down because they can't pay their employees. It seems that it was the case that these employees were paid in cash and might not be able to get bank accounts.
Their economy is going to take a hit.
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Seems to turn out into a disaster according to this guy
https://www.project-syndicate.... [project-syndicate.org]
Interesting , these draconian measures. Standard question to ask is who are the power players and what was their position before the decision.
Re:The rest of the story (Score:5, Insightful)
It definitely will. But I'm not sure there was any other way around it.
India's corruption is legendary. You all but have to buy houses and other real estate on the black market, because the seller doesn't want to pay the taxes on a legitimate transaction. Which leads to a status quo of well-off families hoarding cash from illegal deals and essentially never paying taxes. There are other countries that are more corrupt, but these tend to be 3rd-world countries without a functioning government. Of any semi-developed country (or of nuclear powers, for that matter), India's economy is massively corrupt. Something had to be done.
Replacing bank notes in this fashion is undoubtedly the nuclear option. But the argument is (and I agree) that anything more gradual would have tipped off many people, who would have found ways to convert their cash to other forms in an effort to perpetuate the black economy. India will be in a lot of pain for the short term, but in the long term they will have a much stronger economy with proper funding for public services. They are never going to fully transition to a developed economy (and enjoy the benefits thereof) with that much corruption.
Greece (Score:2)
Not to mention the spectacular implosion of Greece in recent history. While corruption and not paying taxes wasn't the only story with Greece, when I think of another country that is developed, but had lots of the other two problems over a long period of time, finally coming back to bite them in the ass I think of Greece.
Perhaps India took a hard look at what happened in Greece and is trying some corrective measures before things get too out of hand. India doesn't have the rest of the EU or Germany to buy t
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It's a total disaster:
- Factories are closing or laying of large numbers of people since demand for anything non-vital has collapsed.
- Building sites are closing since there is no cash to pay workers.
- Farmers are unable to buy seeds and fertilizer for the new planting season. Planting food is not an optional luxury for India.
- Every single bank or ATM that is open has a 4-6 hour long queue.
- 2/3rd of all ATMs are closed.
- Banks have stopped opening new bank accounts.
- A quarter of all Indians is illiterate
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Good for India (Score:3)
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Well you have to admit "developing infrastructure" might be a bit difficult with only 1% of your citizens actually paying any taxes of any sort.
This could be a very formative moment in Indian history (provided the government, which from many reports is full of corruption and doesn't just funnel the money into gold toilets and the like)...
I just wish... (Score:2)
I just wish we could get people to stop writing checks at the supermarket!
A check transaction almost inevitably goes along the lines of, "Oh, you mean i have to pay!? Let me first find my checkbook and then spend forever filling out the check, almost all of which could have been done while waiting in line or while my groceries were being checked"
Not the end of the world of course but i do have better uses for my time than waiting in line.
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Never seen one that didnt around here. Most have a system setup that scans the check and then withdraws the money right that moment.
ten women to one man (Score:2)
Only with e-cash. Coming to a mineshaft gap [youtube.com] near you.
Oops (Score:3)
Here's an article from earlier today that would seem to disagree with a basic assumption of this story:
https://www.bloomberg.com/news... [bloomberg.com]
How are Credit & Debit cards not electronic? (Score:2)
How, exactly, are they discounting all of the debit, credit card, and ACH transfers in the US?
It's trivial to get your own card reader, there are various Apple and Android payment systems, PayPal, Google Wallet...
They're cherry-picking the hell out what it means to be an "electronic" payment.
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Lipstick on a pig (Score:2)
If you want an unbiased view on this, please don't ask just the mobile payment providers who have everything to gain by painting a rosy picture of a very bad situation in India. The markets across the country are crumbling following this idiotic decision with markets falling as much as 70% in some sectors (agriculture is an example) and 100s of 1000s of people losing their jobs as a direct result of this bone headed move by the government.
Washington Post: India just made a big mistake with its currency ban
h [washingtonpost.com]
Rubbish (Score:2)
Cash (Score:2)
Get me fucking cash, or better yet oil. Barrels of it. Will keep it in my bedroom. You see energy is the most inflation proof thing. If you have energy you can do anything.
And e-payment systems never fail? (Score:2)
I always carry a couple hundred in cash just in case, and it has come in handy. Over the summer I was waiting in line at the grocery store when their POS system decided to take a nap and stopped processing credit or debit transactions - cash only, said the cashier. This was a major Canadian grocery chain, not a mom and pop corner store. As far as I could see across several checkout lines, I was the only one with cash - everyone else had to queue up at the single ATM to withdraw money to pay for their pur
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A "race" we don't want to be in. (Score:2)
We, The little People do not want to be in the "race" to a cashless society! There are so many negative consequences that the whole idea scares the hell out of me.
The privacy implications are creepy enough, but that's only part of it. If the government eliminates cash from the economy, we will be totally reliant on banks. If the option to withdraw & hold physical money disappears, the banks will charge us just for holding our wealth. Think 0.5% interest on your savings account sucks? How about -0.5
Re:race FROM e-cash (Score:5, Insightful)
Note that the socialist utopias are moving to e-cash.
I'll keep my dollars, thanks. No need to bother the tax man every time I buy something from a local vendor.
As long as you didn't drive to said vendor on a government-funded road under government-funded street lights using gas that was purchased from a government-inspected pump (so as to make sure that you pay for a gallon and get a gallon) then sure. Don't bother paying the same sales taxes that the rest of us pay.
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The dose makes the poison.
Meanwhile in the real world, it's evil capitalism that gets things done. Before the government can steal something and give it to you, it first has to be invented by someone willing to take risk or built by someone that expects to get paid.
This includes the machines that paved the road, the street lights, the gas pump, and the gasoline.
Socialist snow plows are built by capitalists.
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Before the government can steal something and give it to you,
You mean like how the government paid for networking research that lead to the internet? Or how they fund basic science research with grants that private companies would never do? And then the same companies just take the research and make money off of it. Brilliant innovation. Socialize the losses, privatize the gains. Yay Capitalism !
Meanwhile in the real world, it's evil capitalism that gets things done.
Said the person commenting on a SOCIAL website where people congregate under a SOCIAL contract for a COMMON goal to SOCIALLY and FREEly exchange ideas. But perhaps you're the
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Before the government can steal something and give it to you,
You mean like how the government paid for networking research that lead to the internet?
Do you remember the Internet before it was commercialized? I do. The government certainly did NOT give us "The Internet". The internet the "government gave us" was highly restricted to educational institutions and people who had lots of money to pay for connections. "Us" did not get to play in the fancy new sandbox.
If you could get a UUCP connection from someone on the internet, (or, as I had to, paid for one from PSI) you got the fun of using things like BITFTP to get stuff from the net. But "The Internet
Re:race FROM e-cash (Score:4)
Such a blinkered, narrow view. Did Capitalism protect those inventors from having their inventions stolen by those with more resources, or was it the socialist patent office that helped them out? For that matter, did capitalist forces keep their countries safe from invasion so they could work without concern for marauders coming over the hills to kill them and take their resources?
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Meanwhile in the real world, it's evil capitalism that gets things done. Before the government can steal something and give it to you, it first has to be invented by someone willing to take risk or built by someone that expects to get paid.This includes the machines that paved the road, the street lights, the gas pump, and the gasoline.
Socialist snow plows are built by capitalists.
You seem to have a chicken or the egg problem. Without Capital you can't make "the machines that paved the road, the street lights, the gas pump"etc and without those you can't support the businesses that make Capital. The truth is that the Western nations build the infrastructure and wealth necessary to support Capitalism using truly evil Economic Systems like Colonization and Slavery
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And yet all of those things - roads, amenities, regulatory authorities and the tax system to pay for them - all of them predate e-commerce. All of them date back to a time when account ledgers were physical books (ledgers) and cash was king. Think about that.
Okay, I've thought about it. What do I do now?
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