Well that didn’t take long. My article warning about the emergence of nannying controls on private money (any money that is not cash) is less than two weeks old, but the Telegraph is already reporting that NatWest has turned on a feature in its app that nags you about your CO2 emissions. Santander is all-in on this too, awarding the company behind these cyber bullies, CoGo, winner of its X Environment Challenge, Be Sustainable category. TSB gave it a whirl too but according to the Telegraph ditched it over the summer.
Not that any reader of the Daily Sceptic should care, but it doesn’t even calculate your CO2 emissions from your purchases, because it cannot. As I have pointed out previously, payment systems do not know what you have purchased, only whom you are purchasing from. That applies both to private money and to public money. So, apps like these fall back to making a guess based on the merchant, or just the merchant category. As the Telegraph article says: “The estimated footprint of purchases is calculated from the overall value of a transaction, as opposed to the individual contents of a shop.”
For these banks, facts and accuracy are just collateral damage in their ideological war.
Other than righteous indignance, what are we to make of this? Although these apps are touted as opt-in, the data they hold are not. From the Farage debanking scandal we know the likes of NatWest Group are not averse to using whatever data they can get their hands on to build a case against an enemy, or ‘customer’ as they sometimes call them. The same goes for other operators in the private money space such as PayPal, as the Free Speech Union discovered to its cost last year.
But complaining about these nag-apps is missing the bigger point. The problem is that banks necessarily deal with our data but cannot be trusted with them. I know what you are thinking, we have the Information Commissioner’s Office, doughty defender of our data. You can read its utterly supine response to the Farage scandal here. It amounts to the Information Commissioner, John Edwards, writing a letter to the banks to remind them of their responsibilities to the public, that they should not be using information in a way that is “unduly unexpected”. There is no action, no bite from the watchdog. We can surmise that the banks and PayPals will continue their woke trajectory. It is going to get worse before it gets better.
Judging from the comments on my previous article, many sceptics’ solution to all this is just to revert to using cash. Okay for now, for small one-off purchases, but forget moving house or buying a car. However, it is pure fantasy to think that any organisation or company of even modest size could close its bank accounts and survive entirely on cash. It might work for your window cleaner, but it won’t work for a telco, estate agent or import-export business, to pick three at random. Nor for that matter for any organisation, commentator or creator making an income off Substack, BuyMeACoffee or social media. And why should they be marginalised? Why can we all not have the convenience and economic advantages of modern fintech but without the woke wrapper if we choose?
The question then is why the market is not serving this need? Part of the problem is that the bar to entering the banking market, getting a banking licence, is very high. The funding requirements mean that you need to look good in the eyes of other banks or venture capitalists, most of whom have by now got a nasty dose of the woke mind virus. What we need to address is this double whammy of the woke narrative and the dysfunctional state of the market. We need a positive counternarrative and the conditions to act on it. I do not think that positive narrative has to be novel, just remembering the successes of free markets and enterprise. The conditions to act on it are more controversial.
In my view, private enterprise has shown that it alone cannot fix the money system. We have Bitcoin and its ilk, but its value varies wildly, it has fundamental problems with reversibility and identity (ask any ransomware victim) and it is not on a path to joining the mainstream anything like soon enough. We need a public good, serving the public interest both as a public money and as a public infrastructure. That thing is something like a CBDC.
As I have explained previously, CBDCs are by no means easy to get right. The design choices will need the wisdom of Solomon, and then there are the legislative, engineering and political hurdles. For a deeper dive on those problems I recommend the excellent report from the Institute for Money, Technology and Inclusion at University of California at Irvine. One of the motivations to persevere, get the designs right and to solve the other problems is that it allows for a much more diverse set of participants in the market. For example, proposals for the U.K. CBDC have so-called Payment Interface Providers (PIPs) with API access to the core ledger to provide wallet services, allowing retail users (the public and businesses) to make payments. PIPs do not have to be banks. That would allow something like the Free Speech Union to offer a wallet (put that on your To Do list Toby) which facilitates individuals and businesses interacting directly, completely cutting out the banks. Banks could still offer their services, covered in green gunge if you so wish, but the rest of us could have all the benefits of modern fintech without having to take the knee. Now that’s a narrative I can get behind.