Negative Interest Rates and the War Against Cash

  • Brendan Brown


This chapter advances a strong critique of negative interest rates as a non-conventional monetary tool. Even at the just moderately sub-zero levels of recent years (in Japan and Europe), they have fuelled asset inflation whilst making still more remote the prospect of sound money. Some advocates of 2% recommend driving interest rates further into negative territory; this journey would require an intensification of the war against cash. The opposite view is advanced here. First, governments abuse negative rates as a means of camouflaged inflation taxation. Second, the war against cash is full of danger—most particularly it depends on an unholy alliance between Big Tech, Big Banks, and Big Government. Third, it displaces monetary base even further from the pivot of the monetary system, meaning that interest rate manipulation is re-enforced.


  1. Bossone, B. (2013). Confessions of a Supply-Side Liberal, Mises July 29,2013: Silvio Gesell’s Plan for Negative Nominal Interest Rates.Google Scholar
  2. Brown, B. (2015). A Global Monetary Plague. London: Palgrave.CrossRefGoogle Scholar
  3. Daniel, J., Josh, W., Ben, P., & Den, H. (2016, August 1). This Is Your Life, Brought to You by Private Equity. New York Times.Google Scholar
  4. Hunt, B. (2003). Anti-trust Issues in Payment Networks. Philadelphia Federal Reserve Quarterly, Q2.Google Scholar
  5. Mankiw, G. (2009, April 22). Observations on Negative Interest Rates. Greg Mankiw’s Blog.Google Scholar
  6. Mitchell, D. J. (2016, March 1). The War Against Cash, Part 3. Cato Institute.Google Scholar
  7. Pethokoukis, J. (2016, September 6). On Praise for the Fed’s Quantitative Easing Program. AEI Ideas.Google Scholar
  8. Reinhart, C. M., & Rogoff, K. S. (2011). This Time Is Different. Princeton: Princeton University Press.Google Scholar
  9. Rogoff, K. S. (2016). The Curse of Cash. Princeton: Princeton University Press.CrossRefGoogle Scholar
  10. Rothbard, M. (2005). A History of Money and Banking in the United States. Auburn: Ludwig von Mises Institute.Google Scholar
  11. Taylor, J. B. (2013, October 1). Causes of the Financial Crisis and the Slow Recovery: A 10-year perspective. Paper Presented at the Joint Conference of the Brookings Institution and the Hoover Institution on “The US Financial System – Five Years after the Crisis” at the Panel “Causes and Effects of the Financial Crisis”.Google Scholar

Copyright information

© The Author(s) 2018

Authors and Affiliations

  • Brendan Brown
    • 1
  1. 1.Economic ResearchMUFGLondonUK

Personalised recommendations