In theory, a cashless society is possible.

But the reality of it would be far from desirable. The fact that it would enable a totalitarianism and control over individual affairs that would eclipse anything seen in the 20th-century should ensure that it remained merely an academic exercise only.

I don't think you have thought through the logistics and consequences.
If dollars are kept in electronic accounts and are not actually printed, then aren't they really theoretical dollars?
What distinguishes these dollars from the theoretical dollar values of shares or other assets? Billions can get wiped off the market in a day, but this is because they have only theoretical value, something that is only tested when people actually try and buy or sell the asset.
The value of physical money is kept because of its supply is limited by the government and previously it used to be pegged to precious metals (eg.gold), because it is not easy to increase or decrease the amount of that particular commodity.
what's to stop the government from just pushing a button and immediately devaluing your savings? Who keeps the records?
Security would be a major issue.

And contrary to intentions, far from getting rid of the 'black money market' or 'shadow economy', you will only change the nature it, just as you changed the nature of the real economy.
The currency of economies only exist to enable trade, when they become inadequate to do so the real currency changes.

At the lower end I would forsee a barter economy re-emerging and/or a defacto currency being used, eg gold or silver could make a comeback as an untraceable defacto currency.

Lastly, what happens when the lights go out? That is to say, blackouts can be caused by any number of things, cyclones, terrorism, accidents, lack of maintenance etc. What happens to a local economy if the power stops?

I do hope you get my point about unintended consequences and how it's easy to hurt the very people you think you are helping but honestly, I don't think you've thought this through, and that's being kind.

If dollars are kept in electronic accounts and are not actually printed, then aren't they really theoretical dollars?

Well it's probably a stupid argument anyway but, money would still exist it would be kept in a vault rather than in circulation.

What distinguishes these dollars from the theoretical dollar values of shares or other assets? Billions can get wiped off the market in a day, but this is because they have only theoretical value, something that is only tested when people actually try and buy or sell the asset.

Fluctuating prices of meat, produce (bananas was an example) and fuel may not change the value of the dollar but it sure changes the value you get for your dollar. An outbreak of 'mad cow' would see billions wiped off the value of the local meat industry.

I see no difference in the value of money whether it be notes or plastic.

Lastly, what happens when the lights go out? Fair point, have no answer!

Finally, many small businesses get robed either by staff or break ins. Now if there were no cash, this would remove this billion dollar problem that occurs every day.

Anyway, as I say, it is probably a silly argument.

Australia really has a system of Government that has elements of both Capitalism and Socialism both.In 1961 I was working in sales for an American Company.The "pitch" included a rule that one never says the word "pay", always say "take care of".An American always had great trouble talking his German wife into buying something on credit.My technique was to explain that in America, cars and other things like household appliances were cheaper because people bought them before they had the money, thus allowing manufacturers to produce more items that a ready market could afford now!

The guy was on my side from then on!The girl wanted to wait till they had the money.
'That's what I've been trying to tell you Honey! the guy would say and sign at once on the dotted line.

That was long ago, but the mugs are paying the price now, and the money men should be told to "Take care of it themselves!"

rechtub,

I can see we are getting somewhere. The dollars in a vault are not theoretical dollars, they are merely dollars not in circulation. The supply of real money is controlled by the government via the mint. The amount of money the mint has printed is known and accounted for. These are real dollars and these real dollars can be kept in reserve by banks in their vaults while their electronic dollars (that is, credit) are out there getting shuffled around. Now, the number on your account statemnet is a promise to pay that amount in physical real dollars if you should ever want to cash out. In actual effect, your bank account does not contain real dollars, it contains a prommisory amount you have loaned to the bank so that they can use it to invest and loan out to others to make money. They only have a small percentage held as actual cash.

Now, what do you think would happen when the monetary system is backed by nothing? That is, if you wanted to "cash out" and not use the banking system, what could you use in the 'cashless society'? In actual fact everyone would be running on credit and the number of actual dollars in the system could probably be blown out of proportion if not kept in check by the government, and thus the government must know where every one of those dollars is so that they can always know what the total number of dollars in the system is. At the moment they don't have to because they know how much they printed and how much should be in the system. You can see where the totalitarianism comes in don't you?

I haven't even started on international exchange, but I don't think I'll worry about that.