The Digital Revolution Was A Great Mistake
Paul Craig Roberts

Even the big banks that welcomed the revolution are finding that the cost of managing security could rise out of control and exceed the labor cost of the analogue system. Wells Fargo warns: “In today’s digital world scammers are using advanced tools like AI to make impersonation scams harder to detect. Caller ID can be spoofed, emails can be faked, voices can be cloned, and images can be altered.” This makes Wells Fargo’s current security measures vulnerable. For example, the bank uses recognition of a customer’s voice as a security check for providing access to customer service concerning a depositor’s account.

Scammers are just one problem. Hackers are another. Your identity can be stolen. Your account can be stolen. Your pension can be stolen. Your home can be stolen. Your credit card and your debit card can be hijacked. Checks you have written can be intercepted and altered. Entire systems, corporations, and government agencies can be held ransom.

And then there is “customer service.” The time-consuming struggle with an AI voice, the frustration of dealing with English language-handicapped foreign “customer service representatives” with no authority, the wait to be transferred to a supervisor, the need to go to a branch office because a previous security update erased account connections, and so on. What used to be an easily fixed problem over the telephone answered by the third ring can go on for days before being resolved.

It is going to get worse. The Internet cannot be made secure because it is an open system. Security firms tell financial firms, for example, that the best they can do is to train the company’s employees not to make mistakes that make it easy for hackers. I wonder how long before banks and financial institutions require their account holders to participate in online security courses in order for the banks to guarantee their accounts.

The big banks and the Federal Reserve might soon offer and then impose digital currency. Digital currency replaces physical means of payment such as cash and checks. The handling and managing of physical transactions is more expensive as it requires people rather than a program to manage transactions.  As the five big banks control 90% of all deposits–essentially a monopoly– their adoption of digital currency would impose it on all banks.

A digital currency means your money is no longer in your hands. It can be denied you intentionally or accidentally. You no longer will have a cash hoard as a backup. Possibly, if they are permitted to exist, you could collect anonymous debit cards preloaded with specific amounts, but if digital money is to be used for control, their existence is unlikely. Moreover, hackers are as likely to be successful diverting digital money as everything else.

The main destructive element of digital systems is that they remove humans from human contact. Scammers have eliminated the usefulness of a telephone as a device for speaking to another person. Instead, people text. But if caller ID and emails can be compromised, so can texting.

What the digital revolution has given us is total insecurity, isolation, and enormous frustration. Why do we put up with it?

Hon. Paul Craig Roberts is the John M. Olin Fellow at the Institute for Political Economy, Senior Research Fellow at the Hoover Institution, Stanford University, and Research Fellow at the Independent Institute. A former editor and columnist for The Wall Street Journal and columnist for Business Week and the Scripps Howard News Service, he is a nationally syndicated columnist for Creators Syndicate in Los Angeles and a columnist for Investor's Business Daily. In 1992 he received the Warren Brookes Award for Excellence in Journalism. In 1993 the Forbes Media Guide ranked him as one of the top seven journalists.

He was Distinguished Fellow at the Cato Institute from 1993 to 1996. From 1982 through 1993, he held the William E. Simon Chair in Political Economy at the Center for Strategic and International Studies. During 1981-82 he served as Assistant Secretary of the Treasury for Economic Policy. President Reagan and Treasury Secretary Regan credited him with a major role in the Economic Recovery Tax Act of 1981, and he was awarded the Treasury Department's Meritorious Service Award for "his outstanding contributions to the formulation of United States economic policy." From 1975 to 1978, Dr. Roberts served on the congressional staff where he drafted the Kemp-Roth bill and played a leading role in developing bipartisan support for a supply-side economic policy.

In 1987 the French government recognized him as "the artisan of a renewal in economic science and policy after half a century of state interventionism" and inducted him into the Legion of Honor.

Dr. Roberts' latest books are The Tyranny of Good Intentions, co-authored with IPE Fellow Lawrence Stratton, and published by Prima Publishing in May 2000, and Chile: Two Visions - The Allende-Pinochet Era, co-authored with IPE Fellow Karen Araujo, and published in Spanish by Universidad Nacional Andres Bello in Santiago, Chile, in November 2000. The Capitalist Revolution in Latin America, co-authored with IPE Fellow Karen LaFollette Araujo, was published by Oxford University Press in 1997. A Spanish language edition was published by Oxford in 1999. The New Colorline: How Quotas and Privilege Destroy Democracy, co-authored with Lawrence Stratton, was published by Regnery in 1995. A paperback edition was published in 1997. Meltdown: Inside the Soviet Economy, co-authored with Karen LaFollette, was published by the Cato Institute in 1990. Harvard University Press published his book, The Supply-Side Revolution, in 1984. Widely reviewed and favorably received, the book was praised by Forbes as "a timely masterpiece that will have real impact on economic thinking in the years ahead." Dr. Roberts is the author of Alienation and the Soviet Economy, published in 1971 and republished in 1990. He is the author of Marx's Theory of Exchange, Alienation and Crisis, published in 1973 and republished in 1983. A Spanish language edition was published in 1974.

Dr. Roberts has held numerous academic appointments. He has contributed chapters to numerous books and has published many articles in journals of scholarship, including the Journal of Political Economy, Oxford Economic Papers, Journal of Law and Economics, Studies in Banking and Finance, Journal of Monetary Economics, Public Finance Quarterly, Public Choice, Classica et Mediaevalia, Ethics, Slavic Review, Soviet Studies, Rivista de Political Economica, and Zeitschrift fur Wirtschafspolitik. He has entries in the McGraw-Hill Encyclopedia of Economics and the New Palgrave Dictionary of Money and Finance. He has contributed to Commentary, The Public Interest, The National Interest, Harper's, the New York Times, The Washington Post, The Los Angeles Times, Fortune, London Times, The Financial Times, TLS, The Spectator, Il Sole 24 Ore, Le Figaro, Liberation, and the Nihon Keizai Shimbun. He has testified before committees of Congress on 30 occasions.

Dr. Roberts was educated at the Georgia Institute of Technology (B.S.), the University of Virginia (Ph.D.), the University of California at Berkeley and Oxford University where he was a member of Merton College.

He is listed in Who's Who in America, Who's Who in the World, The Dictionary of International Biography, Outstanding People of the Twentieth Century, and 1000 Leaders of World Influence. His latest book, HOW THE ECONOMY WAS LOST, has just been published by CounterPunch/AK Press. He can be reached at: [email protected]

 

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