Some prominent economists are now advocating getting rid of most cash payments. Kiss $100, $50 and $20 bills goodbye if they get their way. The most visible proponent is Kenneth Rogoff, former chief economist at the International Monetary Fund and currently a chaired professor at Harvard. In his just published book, “The Curse of Cash” (Princeton University Press), he argues that the U.S. economy would benefit if the government withdrew larger denomination bills from circulation, further restricted cash withdrawals and deposits, and limited the size of cash payments in retail trade.
Launching a war on cash, however, would further empower government, violate private property rights and undermine individual freedom. Expropriating cash regardless of whether it was obtained legitimately or not smacks of socialism. There is an implicit assumption made by Rogoff that it is only criminals that want higher denomination notes.



Although Rogoff recognizes the privacy issues surrounding his proposal, he argues that there would be net benefits from strictly limiting cash transactions — including shrinking the underground economy, increasing government revenue and increasing the effectiveness of monetary policy. Reducing crime and corruption, and filling government coffers, presumably would trump any loss of freedom. As Rogoff argues, “The tax and crime angle is reason enough to shred the world’s mountains of paper currency.”