A Balancing Act

Legislators in Ohio are considering a bill that would require businesses to accept cash for payments up to $500. The sponsor of the bill stated, “I hear from residents who may not trust virtual payment options or just prefer to use physical cash. This bill balances the needs of government and business to be efficient with the ability to still rely on physical currency.”

Sponsors of bills such as this frequently attempt to justify their meddling by claiming that they are balancing the needs of different groups. In truth, economic interventions always benefit some at the expense of others. Forcing businesses to accept cash payments is one example.

If a business believes that accepting cash payments is in its best interest, it will accept cash payments. Government edicts will not be necessary. However, if a business believes cash payments do not serve its interests, but it is forced to accept them anyway, the business’s needs are not being “balanced.” The needs and desires of some consumers take precedence over the business’s needs and desires.

 When force is involved, no “balance” between disparate needs is possible. The wielder of force compels others to satisfy his needs. This would be obvious if a consumer demanded that a business owner accept cash, and the consumer used a gun to enforce his demand. The principle does not change if the government acts as the consumer’s proxy.

A “balance” between the needs of a business and consumers is only possible when each party is free to engage with the other on terms that each voluntarily accepts. When coercion is absent, consumers and businesses are free to negotiate terms that each finds acceptable.

Property rights mean the freedom to produce, trade, and use values as one chooses. The rights of business owners protect their freedom to sell products and services on terms that they choose. The rights of consumers protect their freedom to trade with the businesses they choose. If a business refuses to accept cash payments, it is exercising its property rights. If a consumer refuses to patronize a business that does not accept cash payments, he is exercising his property rights.

The proper purpose of government is the protection of individual rights, including property rights. When government protects rights, businesses and consumers can “balance” their needs through voluntary trade. When legislators compel businesses to trade on terms the government dictates, any claims of “balance” are nothing more than pretension.