Digital Cash Will Starve the Homeless
My neighborhood is a focal point for homeless-services organizations, which means that on any fine day, there will be homeless people sitting on the grassy areas. None of them are panhandlers. But yesterday, as I passed a group of homeless people, I realized that I wouldn't be able to give them money even if they asked for it, because I didn't have any cash. I almost never have any cash anymore. It used to be necessary for food trucks and taxis and so forth, but now they all take credit cards. Now we mostly just need cash to tip the occasional delivery person, and I leave that cash at home, in my husband's wallet.
Which makes me wonder what Square Inc., and the rise of similar digital-payment systems, means for panhandling and busking. In some ways, digital payments have made it easier to help people in need -- my Facebook feed is filled with appeals to bring meals to new mothers and people with illness in the family, donate to people who have fallen on financial difficulties, and fund various sorts of projects, and often I do help. But panhandlers rely on casual charity. Sure, there are people who organize what they give: McDonald's gift certificates, or a certain amount to each person. There are also those who don't give anything, instead donating to groups such as So Others Might Eat.
But most of us, whether we give to homeless-oriented charities or not, are not so organized. We sometimes give whatever small bills or change we happen to have in our pockets; if we don't have money, we don't give.
More and more people are like me, however: They don't have it in their pockets in the first place. In theory, they might transfer the money they aren't giving out to a charity instead, but I doubt it. Most people probably have the money they give to panhandlers in a completely different mental basket from their tax-deductible charitable donations; they won't amp up the one just because they've stopped the other entirely.
I won't go into the arguments about whether you should give to panhandlers or not; having worked for a homeless-advocacy group long ago, I'm familiar with all of the arguments, but I'm not sure they actually matter much in practice. Most people are not so constituted as to either always give or never give. But whether you think giving to panhandlers is good or bad -- whether you think it results in immiseration of marginal people or encourages them to get help -- one thing is certain: A cashless society will cause a marked change in the streetscape of cities. Panhandling has been around as long as we've had cities, and neither law nor custom has ever been able to fully eradicate it. But technology just might.
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(Megan McArdle writes about economics, business and public policy for Bloomberg View. Follow her on Twitter at @asymmetricinfo.)
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