What happens when Money dies?

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Forums › Finance and wealth management › What happens when Money dies?

Brendan

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#111615 8-Nov-2012 23:41

What happens when money, as a concept, dies?

Money is useful only in an environment of scarcity - be it natural (as in ancient times), or artificial (as is the case today). It can be used to manage and allocate resources, or control populations.

But what happens when this breaks down? What happens when technology provides individuals with the means to produce any practical item they may need in their lifetime? Food, medicine, shelter, entertainment - all provided for through nanotechnology.

It is a question I have been pondering for many years, and i would like to hear some intelligent opinion on it from others here.

Here is a short video from Michio Kaku (prominent physicist) that explains the question well.
Michio Kaku: Can Nanotechnology Create Utopia? - YouTube

What happens to society when working for a living is as irrelevant as going to church?

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#714449 8-Nov-2012 23:59

Apple would probably patent the idea so it couldn't be used and therefore the utopia wouldn't exist. But this would actually be good, because ...

Did you know that the first Matrix was designed to be a perfect human world, where none suffered, where everyone would be happy? It was a disaster. No one would accept the program, entire crops were lost. Some believed we lacked the programming language to describe your perfect world, but I believe that, as a species, human beings define their reality through misery and suffering. The perfect world was a dream that your primitive cerebrum kept trying to wake up from.

PS: Michio Kaku is always interesting to listen too.. he had a program on the discovery channel that I have not seen in a while.

Fraktul

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#714460 9-Nov-2012 01:57

I think you may be confusing the vast possible increases in production which nanotech manufacturing may bring with a world without scarcity. Increasing the means of production does not mean that scarcity is eliminated as inputs are still required.

At is most basic level energy, matter and a design are still required no matter how efficient the production or the elimination of human labour from the process.

Down and out in the magic kingdom by Cory Doctorow is a novel you may be interested in which describes a 'post scarcity' economy: http://craphound.com/down/?page_id=1625 This is slightly misleading as there is still scarcity of resources and whilst the concept of money in its traditional sense is no longer present there is still a concept of value.

Brendan

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#714461 9-Nov-2012 02:09

Fraktul: I think you may be confusing the vast possible increases in production which nanotech manufacturing may bring with a world without scarcity. Increasing the means of production does not mean that scarcity is eliminated as inputs are still required.

No, only guilty of simplification. I've found that going into lots of detail results in many people losing track or losing interest.

You are of course correct, but from our perspective here today, resources would be tantamount to unlimited - especially when considering the resources of the solar system or the galaxy. Of course, I do not expect all that to be available for some time, but in principal...

But also consider that there will be not wastage: with a nanotech based technology, 'rubbish' simply becomes resource to be reprocessed for as long as we can extract energy from the environment.

At is most basic level energy, matter and a design are still required no matter how efficient the production or the elimination of human labour from the process.

True; but when you consider simply re-using the existing matter over and over again, it comes down to energy.

Energy my not be infinite either, but there are vast amounts of it.

But the far extremes of physics was not my objective here:

Down and out in the magic kingdom by Cory Doctorow is a novel you may be interested in which describes a 'post scarcity' economy: http://craphound.com/down/?page_id=1625 This is slightly misleading as there is still scarcity of resources and whilst the concept of money in its traditional sense is no longer present there is still a concept of value.

I have read it. I think, some time ago.

While interesting, I did not think it went far enough. I guess it's difficult to write a book like that, let alone get a publisher or reader interested in it.

How do you govern a populace that needs government for virtually nothing? How does commerce work in a post scarcity society?

And what does that say about todays world?

eracode

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#714469 9-Nov-2012 05:19

I'm trying to get my head around this interesting thread by going back to basics. At the risk of stating the obvious, I thought back to first principles.

Economics is all about the allocation of scarce resources. Ec 101 says price is determined where suppliers' and demanders' volumes are in equilibrium. Money is both a medium of exchange (and can be used to settle a transaction at the equilibrium price) and is a means of storing of value.

If supply of everything (or many things) becomes unlimited (or vast) what happens to prices? I guess they become very low or nil. Money is not needed if things are free. Then money loses its own scarcity value and people who have lots of it are no richer than anyone else. I guess all this happens if everything is free - but so long as there are still at least some scarce resources money may still have some value. The few remaining scarce resources then become extremely valuable and holders of those materials remain wealthy.

This sounds like the role gold can play as medium of exchange and a store of value. However maybe nano-tech can produce gold in huge quantities, so we are back where we started.

What thing could always remain scarce? I'm thinking of that movie 'In Time', where time was the medium of exchange and the means of storing value. Poor people had only days left before they would die and wealthy people had decades or centuries.

But then if future-tech could produce a time machine, all this goes out the window.

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BlinkyBill

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#714477 9-Nov-2012 06:46

Money is simply a proxy for value; it's representational. So as long as there's value, and until such time as value is traded for like (as in bartering), there will always be money.

Will money always be represented by currency? I'd say we are 5-10 years away from no longer needing currency, but as a standard unit of value, we'll always have money.

So the better question is "what happens when we have infinite resources that have no value"? We don't need money, because by definition money represents value.

Wll we ever get to the situation where we have infinite resources without value? It's hard to image, even universally, since people seem to increase population to the level where resources are scarce and hence have value.

I can't see technology coming to the rescue here - a much more fundamental change to human nature would be required.

Batman

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#714488 9-Nov-2012 08:21

i propose that if nanotechnology can control everything, and money is, irelevant then one single dictator will rise and use the nano to enslave the entire population for his pleasure and ambition and he'll just control your emotions with the nano, control whom and how and when you have your offspring, and just kill you off when you become redundant ...

why not?

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NonprayingMantis

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#714498 9-Nov-2012 08:54

there will always be scarcity. If nothing else people will create artificial scarcity to ensure they can keep making money.

One only hads to witness how e-books, music, and movies work in a digital world where there is no scarcity i.e. you could create unlimite copies of the same book if you want.

this article is a must read:
http://www.cracked.com/article_18817_5-reasons-future-will-be-ruled-by-b.s..html

Fraktul

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#714550 9-Nov-2012 10:12

Brendan:
True; but when you consider simply re-using the existing matter over and over again, it comes down to energy.

Energy my not be infinite either, but there are vast amounts of it.

To be honest I think this is a bit over simplified, the pursuit of cheaper energy is one of the overriding issues of all societies, from pre-historic to current day - consider food is ultimately energy for people, and I probably don't have to even mention the word oil.

If you had unlimited manufacturing capacity you could just build lots of solar cells of course, however these will be "somewhere" - who's land, what does the owner get from the placement of solar cells on their land? How is it distributed, how is the distribution network maintained, who decides where the distribution network goes?

More exotic energy sources than solar? Ok, but then you may in fact be using scarer elements then silicon (the crust has enough silicon for us to easily cover the entire surface of the earth with solar cells if we wanted to), who decides who gets these scare elements, how is this managed?

There will always be some degree of scarcity, the universe is not infinite to our knowledge and entropy is not just a good idea, its one of the laws of thermodynamics.

bazzer

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#714559 9-Nov-2012 10:52

A species set on endless growth is unsustainable...

crackrdbycracku

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#714584 9-Nov-2012 11:42

So, technology reaches to the point where our 'needs' are able to be met faster than we can come up with new 'needs' eliminating what we call 'scarcity' today. At present technology lags behind what we think we need, remember when nobody had smartphones? But now we 'need' these things.

I think society would divide into people who would four groups.

First, would be people who would create artificial scarcity and find a medium with which to trade as a means to satisfy a psychological need to live in a stratified society. It would probably grow out of what we today call the 'art world'.

Second, would be people who would use the extra time/resources to explore what the Greeks once called the 'contemplative life'. This would grow out of religions and philosophy departments.

Third, would be those who use the extra time/resources to try and push the limits of human experience externally. Felix Baumgartner is an example of what some people might do with more time and resources. This would eventually lead to something like Star Trek, space would be the only place to go to get new experiences and now we could.

Four, some people would just watch more TV on a bigger screen.

Good question.

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jonherries

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#714589 9-Nov-2012 11:57

Great topic.

Neal Stephenson wrote a book called the Diamond Age, where nanotech could create what was needed.

From reading that and the Cory Doctorow piece mentioned above I have some thoughts:

If you no longer die ie. nano technology creates a replica with the correct neural connections to restore "you" from a backup, the capacity of the earth to support an infinitely larger population is questionable. Diamond age appears not to consider this, the Doctorow book does.

In Diamond Age some people eschew nanotech for whatever reason and money is used to buy "handmade" items as luxury goods.

If you do still die, time becomes valuable ala the movie with JT "In Time" and becomes a proxy for money (ie. stored value/tradable).

I wonder if the result of developing nanotech results in some "accidents" which leaves part of the world uninhabibable (presumably though nanotech could make it habitable)?

Land/property rights would create scarcity I guess, unless you could "make more land", that would provide a need for money concept.

Also presumably unless the computers are sentient someone will have to spend time creating these, how would you value their time?

Jon

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crackrdbycracku

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#714590 9-Nov-2012 12:03

The Charles Stross novel Singularity Sky has some good ideas on this.

In a way so does Star Trek as replicators meant that most, but not all, needs could be met very cheaply. To boldly go sounds like a plan to me.

I am taking it as an assumption that technology at the level we are talking about means reasonably advanced space flight is also possible.

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gzt

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#714624 9-Nov-2012 12:59

Nuclear energy was once viewed the same way as Kaku and others talk about replicator technology.

My guess is replicator technology will give us as just as many challenges as we have with nuclear technology.

BTR

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#714648 9-Nov-2012 13:12

Now you have done it, I can see someone thinking about this way to hard, their head exploding which will then create a black hole....

BlueShift

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#714680 9-Nov-2012 13:51

Ian M Banks' Culture series of novels are set in a post-singularity society. Pretty much anything one could want is available, so there's no reason to accumulate stuff. People are free to do largely whatever they are interested in, and have very long lifespans to do so. The birth-rate is low, but children are valued. Social standing is important, "don't be a dick' is a golden rule.

In actuality you ask a big question, there would be huge ramifications if scarcity ceased overnight - society crumbling, revolution and ruin as the old-guard claw desperately to hold onto their power (c.f. RIAA). But its more likely to slowly fade, and become less relevant, as other frameworks take its place.
In the short term, you'd end up with the crew of the spaceship in Wall-E - unmotivated fat couch potatoes. In the longer term, society would evolve ways of encouraging people to get out of bed in the mornings and do something.

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