A brief history of money is as follows: before money most people lived in communal tribes where everything was shared and most labour was general and simple (i.e. hunter or gatherer), then came barter which allowed more specialization (i.e. farmer, rancher) but was incredibly ponderous as it fell on the people who had the surplus resource to find someone else who wanted that surplus resource but also had what you wanted. Then came the development of money that allowed for easy exchange and allowed for more specialization in labour (engineer, scientist, teacher, fashion designer).
Money is a step in a social financial evolution that has not yet culminated. Money is not the last step. Sharing, barter, money are each steps that have laid the ground work that has advanced our knowledge socially and technologically. However, money has runs it’s course and the next step in this on-going evolution is on the horizon, the abolishment of money replaced with access to the necessities for all the world’s people.
Money works best in an environment of scarcity and economic growth (expanding into new markets). There was nothing more efficient at allocating scarce resources than use of the price mechanism. The only problem is that the two key environmental factors that allow for the optimum use of money are no longer true, the factor of scarcity and the factor of economic growth.
Scarcity has been defeated through technological advances and globalization has allowed businesses to reach the saturation point of new markets. There are no more new horizons, economically speaking, that will allow for the growth that we’ve experienced perpetually for the past few centuries. Of course you may be thinking that how can I say we’ve defeated scarcity when some 3 billion people are underemployed and of those 2 billion people world-wide are underfed and of those 1 billion people are actually starving. So don’t we have scarcity? Yes we do. So what am I talking about? I am talking about the fact that we could solve this problem today if we wanted to. It is not that we don’t have the resources, we do. It is also not that we don’t have the labour; we have that in spades, 3 billion people’s worth. But do we have enough money? No we don’t.
Money is our bottleneck.
Money was the solution to allocating scarce resources because the system was designed to assume that all resources are scarce. Notice that resources that are not scarce have no price attached, like air, and until recently water. Money’s strength has now turned into a weakness by restraining productivity and causing inefficiency to maintain profit.
Profit is directly tied to scarcity and inefficiency. The more abundant something is and the more efficient it is at its function the less profit exists. In an economic system that has as its incentive profit will produce an inefficient system that thrives on scarcity. Solutions that offer anything contrary will be ignored, bought out, or suppressed.
How is that you say? Look at all the advancements we’ve gained through our current capitalistic system, cars, computers, NASA, cell phones. Granted in a system based on competition in growing markets, innovation and efficiency can gain you market share at the expense of your competitors. In the environment we see ourselves in today we have the corporate trans-nationals, cartels and monopolies that through lobbying local governments to prevent entry of new players into the markets through excessive regulation and are themselves not curtailed or limited by any one government, do not have to innovate their products anymore, generally speaking. What the transnational are doing, since new markets are becoming less common with globalization, is they are using any means necessary to cut costs to enhance their earnings per share and the primary way they do that is through technological automation which leads to a phenomenon called technological unemployment, the replacement of human labour with machine. Productivity as delivered by machine is constantly rising while human labour is falling off as rapidly. A good video that describes this is called Awakenings available on-line for free. Money ultimately means nothing, resources mean everything. We live in a unique time in which we can pull off that which would have been considered impossible just 20 years ago. Some still think it is impossible. I think that it is a failure in their imagination.
Money ultimately means nothing, resources mean everything. We live in a unique time in which we can pull off that which would have been considered impossible just 20 years ago. Some still think it is impossible. I think that it is a failure in their imagination.