The end of money

There are changes happening now that I believe spell the end of money. Some will welcome it, some won't. But it has already begun.

Value in our society is mostly assigned by scarcity. This is why money is historically based upon gold, because there is only so much of it and it can't be duplicated. To see how true this is, consider what happened when Germany tried to fix it's money problems around 1923 by simply printing more of it. It didn't work because the very scarcity of money is what gives it its value. This sent the country spiralling into terrible inflation. As another example, consider why the value of an artist's work increases after their death. This little absurdity results from the sudden scarcity of their creations. Their intrinsic worth hasn't changed; just their availability: there will be no more of them. But the scarce nature of money doesn't just cause economic woes and produce silly values. It can work in our favor too. Mass production has been great for our society because it propagated previously scarce and expensive items to everybody cheaply. The lowered prices are generally ascribed to reduced production costs, but that isn't so. If the companies had been able to maintain high prices and a wider profit margin then they certainly would have, but money works by assigning value to scarcity. It has been a very useful system. Unfortunately it is also riddled with absurdities and has made possible great evil, allowing some to control bottlenecks and restrict the flow of goods and knowledge, and enslave others.

We live at a pivotal time in history. This scarcity-based system is changing. There are two main reasons for this: data is easily shared, and people love to share.

The information age allows pictures, music, books, and other electronically codable data to be easily duplicated at virtually no cost. Completely independent of money, the world can easily be swamped in humanity's greatest art and our most useful knowledge and insights. This has begun in a big way with efforts like Project Gutenberg, sharing vast numbers of books. And corporations are finding it difficult to plug the leaks of outdated material-based laws as peer-to-peer filesharing flourishes.

People love to help each other. The open source movement has shown that simple cooperation of people on a grand scale, where money plays no real part, can produce results superior to those made by the richest and most powerful corporations. Increasingly we are finding some of the best software products are free. But even beyond the computer world the not-for-profit sector (charities, non-government organisations, clubs, etc.) has become one of the largest and most effective parts of society, growing under our noses with hardly anybody realising it. The non-profit sector is now the world's eighth largest economy!

And a third aspect will come of age soon. A new technology, just now beginning to grow, will take these first baby-steps to a gallop. It is the 3d printer. Currently it is expensive and only small numbers of them exist. At the moment they are often called 3d prototyping machines. A person or a company wants to see if their design for something is correct, so they send the 3d computer files to the 3d prototypers to create the object for real. NASA uses this technology for manufacturing a lot of parts because they often need just one of each; off-the-shelf items don't exist and conventional production would just be too expensive. Some companies are starting to consider using 3d printing in their production lines because it can save them a lot of money while enhancing their flexibility in no longer needing to retool for different products. Some researchers have shown how to use conductive plastics to incorporate electronics directly into such 3d printed objects. Not long ago the idea that everybody would soon be able to have a cheap printer to produce high quality documents sounded absurd. In light of that it easy to imagine that we will all soon own small, cheap 3d printers. But this won't be just another in a long stream of useless consumer items because a 3d printer will be able to create other consumer items from data! And data is a fundamentally different thing. It doesn't obey the standard economic rules.

The next big step will occur when somebody circulates a design that uses a 3d printer to create another 3d printer. The machines should spread like wildfire.

For a while people will need to buy the material (most likely polymer powders) to feed the 3d printers, but in time it will be realised that it can be constructed from the elements in air (hydrogen, carbon, oxygen, and perhaps chlorine or fluorine). Plants have been making polymers from air for hundreds of millions of years. Perhaps 3d printers might harness bacteria or some other nanotechnology to do the trick. When this happens I think they will begin to be called replicators. They will make things, quite literally, out of thin air.

Of course there will still be, for a long time, many things that can't be replicated by these machines, for instance the chips that power our computers, items that depend upon special materials for their capabilities, and hand crafted wares. But I think ways around these will be found. Massive parallelism can allow large, slow elements like the neurons in our brains to be incredibly powerful computers. New work on nanoparticles is finding that their chemistry and physical properties can differ remarkably from what you'd expect of their parent materials.

Scarcity will no longer assign much monetary value to most hardware. Similar changes will occur with energy, human services, transport, food, and land.

energy

Due to better design, equipment is becoming more energy efficient. My little PalmVx computer can run for the best part of a month on the trickle of power from its rechargeable battery if I hardly use it. If I use it lots then it will still last a few days before it needs recharging. This cute little machine has capabilities far greater than those of computers that used to occupy entire floors of buildings and required kilowatts of power. There is a lot that can be done to bring us more energy efficient housing -- just look at the Rocky Mountain Institute, where they can grow banana trees and tropical iguanas above the Colorado snowline using simply sensible house design.

As equipment becomes more efficient the sun and ambient energy will become more attractive. There is low-level energy all around us; we just have to work out how to tap into it. We have had self-winding watches powered by casual arm movement for decades and now have watches that use the body heat of the wearer as their power source. Recently a researcher built a nanotech machine that was powered by brownian motion. We are bathed in sound, especially during the day. If that was to be 'rectified' (in the electronic sense of a diode rectifying alternating current into direct current) then that would produce a constant trickle of usable energy, similar to how a crystal radio is powered by feeble radio waves. There are even some physicists trying to work out how to tap the tiny fluctuations in zero-point energy. I'll believe that when it happens, but you never know...

One of the biggest problems with energy has always been storage. If we capitalise on plants' and microbes' trick of converting light or other ambient energy into chemical energy then that may allow us to stockpile it in concentrated form. On the other hand if we become very good at tapping ambient energy then storing it won't be so important.

This will reduce the requirement for money to just human services, transport, food, and land.

human services

Two things will remove human services from the money equation. The first is the development of artificial intelligence and robots (fuelled by the computer revolution and soon, replicators). The second is the increasing tendency of people these days to give things away. For the first time in history large numbers of people are so well off that they can afford to do things simply because they want to. In times past only the very wealthy had the leisure time to help with humanitarian causes. The massive growth of the not-for-profit sector is testament to the human desire to do great things without regard to financial reward.

transport

I expect money will remain important to the transport industries for a long time. The cost of the large amounts of energy required to move people around inside a ton or more of metal and glass will initially restrict personal transport as fuel prices rise. But at the same time the growth of the creative classes that Richard Florida has written about means that people will have less need to travel as the internet will enable more people to communicate and work from home (especially when Virtual Reality hits its stride). These two effects should offset each other to some extent. At some point, lightweight, energy-efficient vehicles will be built by companies having the sense to cash in on the change, and later by people themselves using their replicators. The cost of transport will eventually fall to zero when we eventually learn how to efficiently tap and store ambient sources of energy.

 

I don't like to talk much about these next two as people generally think they are so 'way-out' that they dismiss them out of hand. But they are no more unlikely than being able use a DVD to hold 5,000 books in your hand.

food

Eventually I expect replicators will utilise nanotechnology and cell-growing techniques to become sophisticated enough to make food. At that point the awful burden we put on the world's ecologies will be relieved. The oceans can begin to regenerate their devastated fish-stocks and vast tracts of land under cultivation will be released back to the other living things we share this planet with. If done carefully it would take just 25 years to re-forest much of the damaged land. Salvaging ecologies may never really be possible, but complex, stable webs of life might be established in just the span of a single human lifetime. This means that if we work out how to create food within the next 30 years then we could live to see the greening of the Earth and our children could see it healed.

land

That just leaves land as the only necessity that requires money. But as people's standard of living rises then population growth drops -- a well-documented effect. When we are all living well I expect there will be enough land for all. And with great areas of good land no longer needed for cultivation there will be much more land available.

There is also the fact that virtual reality (VR) lets us build limitless numbers of infinite universes to explore... but I shall leave that discussion to another time.

 

I think we can expect that scarcity will soon cease to function as a model for an economy. How long will this take? Who knows? It is notoriously difficult to predict the future. Some of this has already begun with the data economy, the open source movement, the non-profit sector, and increases in energy efficiency. Some of it seems just poised to happen (3d printers now are similar in price to what DVD writers were several years ago). Whatever the timescale for these changes you can expect them to accelerate, with each step facilitating the next.

Thank heavens large (unofficial) parts of society are making preparations so that we will probably be able to take this in our stride. We can't depend upon the politicians to light the way; widespread corruption and abject worship of money mean they will be at worst an obstacle to progress, or at best irrelevant.

Afterword: I had previously assumed that money -- the very essence of scarcity -- would fall away as a butterfly sheds its ugly pupal shell. But I have recently been wondering... might it just adapt? Money could become simply an indicator of an object's true worth as judged by each person. Anyone might create as much much money as they wished and send it to someone whose work they admire. It would be an indicator of worth in the eyes of others. You couldn't buy anything with it, at least not in the normal sense, but there wouldn't be any need to buy things anymore. I know it sounds strange, but it is easier to understand if you replace the word "money" with the word "credit", in the sense of giving someone credit for a job well done.


Miriam English 2004