Cash Out

Could using less cash drive down crime?

Last September, Melvin Jesse Blain tried to rob a South Carolina bank. When the teller told Blain she had no cash, he thanked her and left. The previous July, two men tried to rob a pizza delivery woman in Troy, N.Y. When they discovered she had no cash, they took the pizza instead. On Nov. 1, police in Beaufort, S.C., arrested a man who had tried to hold up a Smoker’s Express and an IHOP but left with nary a dollar.

Crime still pays, just not in cash. As credit and debit cards replace greenbacks, the odds of a petty thief leaving a job empty-handed are higher than ever. The prospect of a cashless economy—which some predict could arrive within the next decade—could drive street crime to all-time lows.

Crime has been trending downward since the early ‘90s. It plateaued in the early 2000s but then dropped even further for three years starting in 2007. Violent crime declinedyet again during the first half of 2010, according to a December report from the Federal Bureau of Investigation.

Criminologists explain the long downward slope by pointing to a host of factors, from the calming of drug markets (the crack epidemic tapered off) to high incarceration rates (the criminals stay locked up) to better policing (law enforcement now focuses on the most crime-ridden areas) to pure demographics (there are proportionally fewer young, poor men now than there were in the 1980s). These factors seem to be so strong that not even the Great Recession of the last two years—bad economic times have traditionally been associated with spikes in crime, although the link is tenuous—has brought crime rates back up. In fact, national crime rates have continued to drop during the recession, even with unemployment still hovering around 10 percent.

The declining availability of cash is rarely cited as a cause of diminishing street crime, but it could play a role, says Richard Wright, a criminology professor at the University of Missouri-St. Louis. “There is reason to suspect that [street crime] will decline as the use of cash increasingly is replaced by credit and debit cards or other forms of electronic monetary transfer,” Wright argues in a chapter of the forthcoming Oxford Handbook of Criminological Theory. Welfare payments, which used to be handed out in cash, are now transmitted electronically. Convenience stores carry little cash behind the counter. Some businesses don’t accept cash at all. (Yes, that’s legal.)

Most violent crime is the result of one person trying to take another person’s cash, whether it’s an addict robbing a convenience store or one dealer robbing another, says Wright. If cash isn’t available to steal, the opportunities to commit crimes dwindle. At the same time, the drug trade, which relies on cash at the ground level and drives a large portion of violent crime, withers. Sure, drug dealers can still transfer funds electronically, but only at high levels. Street dealers are unlikely to use credit card swipe machines anytime soon.

Terrorism and organized crime would be hurt, too. As Jonathan Lipow argued in a Dec. 17 op-ed in the New York Times, “In a cashless economy, insurgents’ and terrorists’ electronic payments would generate audit trails that could be screened by data mining software; every payment and transfer would yield a treasure trove of information about their agents, their locations and their intentions.” Laundering money would be hell, argues no less an authority than Scott Adams, author of the comic strip Dilbert, on his blog: “Imagine setting up a fake dry cleaner. … The government could easily determine whether that business is buying the type and quantity of dry cleaning supplies typically needed, and whether the profit margins are at industry norms. All of that information would be available through the tax records.” Without cash, underground economies risk detection.

There are reasons to be skeptical. Not all criminals use cash, says Scott Dickson, a crime analyst for the Killeen, Texas, police department who writes the Crime Analyst’s Blog: “Some drug dealers will take stolen property as payment for drugs. Prostitutes will often take drugs as payment for services rendered.” Criminals are likely to adapt to a cashless economy, whether by eluding electronic detection or by creating their own currency. “People were committing crimes long before cash was created,” says Dickson.

There’s no question, though, that shifting away from a cash economy would increase the burden on street criminals. At the same time, it would shift the opportunities for malfeasance toward more sophisticated electronic crime, like hacking and e-mail scams. Some high-tech muggers can already steal your money with an ATM keypad that detects your PIN number, a card skimmer, or an entire fake ATM. And the folks designing these high-tech scams won’t be former street dealers. They’ll be people with more education and higher income. Indeed, as street crime has dropped over the last two decades, white collar and online crime has gone way up, according to the National White Collar Crime Center. In a cashless world, the crime gap will be even wider. “Essentially, the rich will have stolen crime from the poor,” says Wright.

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