Venmo makes every transaction public by default. The app features a social-network-like feed where you can see your friends sending each other varying sums of money, often accompanied with cute descriptions and emoji. The alleged dealer asked his customers to write a funny description for every transaction, and in doing so, turned his feed (and others’) into an open record of drug trafficking.
Nothing was really stopping the students from going to an ATM and withdrawing cash to use in the old-fashioned way. But that takes time and energy and meanwhile Venmo is sitting right in your pocket. The Ivy League’s best and brightest were Nudged into narcing on themselves.
In a cashless society, the cash has been converted into numbers, into signals, into electronic currents. In short: Information replaces cash.
Information is lightning-quick. It crosses cities, states, and national borders in the twinkle of an eye. It passes through many kinds of devices, flowing from phone to phone, and computer to computer, rather than being sealed away in those silent marble temples we used to call banks. Information never jangles uncomfortably in your pocket.
But wherever information gathers and flows, two predators follow closely behind it: censorship and surveillance. The case of digital money is no exception. Where money becomes a series of signals, it can be censored; where money becomes information, it will inform on you.
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In the spring of 2014, the Department of Justice began to come under fire for Operation Choke Point, an initiative aimed at discouraging or shutting down exploitative payday lenders. The ends were, on the face of it, benign, but the means were highly dubious.
At the time, the need for consumer protection was painfully obvious, but payday lending was and is still legal. So the DOJ got creative, and asked banks and payment processors to comply with government policies, and proactively police “high-risk” activity. Banks were asked to voluntarily shut down the kinds of merchant activities that government bureaucrats described as suspicious. The price of resistance was an active investigation by the Department of Justice. By December 2013, the DOJ had issued fifty subpoenas to banks and payment processors.
The most vociferous objections to Operation Choke Point came from gun-rights activists, as the firearms and ammunitions industry were labeled “high-risk.” But guns were only one industry among a bizarre miscellany that had been targeted. Tobacco sales, telemarketing, pornography, escort services, dating services, online gambling, coin dealers, cable-box descramblers, and “racist materials” were all explicitly listed on the Federal Deposit Insurance Corporation (FDIC) website as “merchant categories that have been associated with high-risk activity.”
Critics of Operation Choke Point saw the initiative as a policing of vice, rather than a consumer protection campaign. Many of the targeted industries—like pornography—could be seen as morally unsavory. And in many cases—as with guns—such moral judgments were highly politicized. One pundit wrote, “[W]hile abortion clinics and environmental groups are probably safe under the Obama administration, if this sort of thing stands, they will be vulnerable to the same tactics if a different administration adopts this same thuggish approach toward the businesses that it dislikes.”