Three Kinds of Money

by Roger Bourke White Jr., copyright March 2017


One of the big changes the 2050's will bring is how money is acquired and spent. First off, this will become a cashless world -- transactions will be conducted using biometrics and electronic accounts not paper, plastic or coin. This is just the beginning of the changes.

I envision three kinds of money emerging: Necessity Money, Luxury Money and Investing Money. These forms will be used for purchasing different styles of goods and services and will be difficult to interchange. (if they are easy to interchange, then there is de facto only one kind of money)

First off... Why have money?

The root purpose of money is to make it easier for people to cooperate with each other. When people can cooperate more easily all sorts of benefits accrue to the people cooperating and to the communities around them. Money is all about cooperating. This is why we have money and why its forms change over space and time.

The earliest form of money is oath trading. "I promise I'll do this for you if you promise you'll do that for me." It is simple, but the range of tasks and conditions a promise can handle is limited and the details of what are being promised can be confusing and become a source of disagreement. Money is a way of getting beyond oaths' limitations. It supports many more styles of cooperation.

Who gets involved?

Because money is all about facilitating cooperation lots of people get involved with it. Money is a tangible form of cooperation. It is easy to measure and easy to trade. Another benefit is that it allows cooperation from the past and future to be traded. A person's savings are past cooperation, and mortgages are about future cooperation.

Advancing cooperation

As money gets more sophisticated, trading gets easier, and new kinds of cooperation can be supported. In the case of house building, add in a mortgage and the cooperation gets more convenient and what can be constructed gets more complex. Investing in a company is much easier when there is a stock market. This means that the variety of companies that can be successfully created grows as well. A successful steel company requires a lot more cooperation than a successful Main Street grocer.

And betrayal

We have money so we can cooperate, but it also supports betrayal. And, like cooperation, the more kinds of money we have the more forms of betrayal get supported. Oath breaking is the oldest style. "Your money or your life!" gets supported when tangible money gets common. Ponzi schemes are an example of a 20th century betrayal style.

Emotions are involved too. Being greedy is seen as betrayal in the eyes of those seeing the greed. It is seen as duly earned reward in the eyes of those who don't see the greed.

Just as there are many ways to cooperate there are many ways to betray.

More coming: Blockchain

Creating new styles of money is still going on. Paying with smartphones is one example and another is blockchain technology, of which Bitcoin is an early example. It is going to be interesting to see how these change how we cooperate over the next couple decades.

In sum...

Money makes the world go round by making many more forms of cooperation practical. And the more forms of money we have the more forms of cooperation are supported. As new kinds of monies are developed the world goes round in a much flashier fashion.

In the 2050's we will have even more new styles of money and that is what gets covered next.


Necessity Money

Necessity money will be the medium of exchange used to acquire goods and services offered by the Total Entitlement State (TES) system. TES will be providing basic food, housing, health care and dignity to everyone in the community. Everyone in the community gets an allotment of necessity money, but this doesn't mean everyone has to be purchasing the same stuff or in the same quantities -- people will still be able to make choices. Necessity money will be an evolution from the 2010's SNAP, food stamp and welfare systems. The money will be handed out on a regular basis.

There will be lots of monitoring going on in this necessity money environment. Many of the community will be paycheck-to-paycheck lifestylers and the system will be watching to make sure what they are purchasing is not going to cause a run out of money crisis. There will also be lots of suggestions coming from the monitoring system. Ideally, the suggestions will decline as the person accumulates a surplus of unspent money -- their "rainy day" fund is large.

Want more? Wait for it

One way of balancing between the desire for goods and the money allocated to a person is to have the person wait longer to get things when their money supply is low. A person goes into a restaurant and orders lunch. If they have lots of money in their necessity money account the meal comes out quickly. If they are scraping the bottom of their barrel the food will take two... five... ten minutes to arrive depending on how close to the bottom they are. This won't be as inconvenient as this sounds because waiting is something that will be part of the TES necessity lifestyle environment. Think of waiting in line for rides at Disneyland. Instead of an inconvenience this will become a signaling device for many people to indicate the status of their money supply.

Windfall money

People in Stone Age societies experience both good times and bad. This means that part of our instinctive thinking is experiencing windfalls. If necessity money includes some surprising windfalls it will fit instinctive thinking more comfortably. This means that necessity money can include some random flow, as in, some equivalents to winning lotteries. This randomness can be a mix of some totally random windfalls and some form of letting people invest in lottery tickets. Surprise winnings are definitely something people enjoy at the instinctive level.

Luxury Money

Luxury money will originate from doing ambitious class activities -- the 2050's version of "real job" activities. It can be used to purchase anything people or cyber choose to make -- anything that is not purchasable with necessity money, that is. The two systems will be distinct and independent. This will be so to keep the goods and services provided in the necessity environment stable.

Luxury money can buy dilettante-created goods and services. And this will be one of the pillars for engaging in dilettante activities. If someone wants gourmet style vegetables grown by a dilettante farmer, they will pay for them with luxury money. If they want to vacation in an exotic locale they will pay with luxury money. Conversely, if they want to go to a Disneyland equivalent (entertainment for everyone) that will take necessity money.

Investing Money

Investing money buys factories. Since cyber is doing the factory designing, building and buying in the 2050's, the money that does this will flow through cyber hands -- humans will rarely have contact with it. It will exist because it is a convenient way of handling prioritizing the projects that cyber will be engaging in to provide prosperity to humans.

Humans won't see it, but it will have a strong influence on the prosperity that humans experience.

This 21 May 17 WSJ article, The Quants Run Wall Street Now For decades, investors imagined a time when data-driven traders would dominate financial markets. That day has arrived. by Gregory Zuckerman and Bradley Hope, describes another step being taken in this evolution.

From the article, "Up and down Wall Street, algorithmic-driven trading and the quants who use sophisticated statistical models to find attractive trades are taking over the investment world.

On many trading floors, quants are gaining respect, clout and money as investment firms scramble to hire mathematicians and scientists. Traditional trading strategies, such as sifting through balance sheets and talking to companies’ customers, are falling down the pecking order."

How People Will Save Money?

Saving is part of human instinctive thinking. It is a recent part but, like exploring, it is something that some people in the community will want to engage in. It will make them feel good.

How to stroke this feeling is going to take some inventing. If you don't have physical money, how can you put it under a mattress? What will having a "fat bank account" mean in the 2050's? For necessity money this will be growing the rainy day fund, but there is a limit to what makes sense to have in this fund. Beyond that limit, growing it is just stroking some instinct in the person that is doing it. For this reason large savings accumulations will probably be a luxury money activity, but what it will be beyond that isn't clear.

Gambling and Investing

Gambling and investing are powered by similar emotions. Gambling will be a lot more popular, but both are going to be activities that people will want to engage in.

Gambling games are simple to organize. Casinos are likely to be around in the 2050's. The challenge is coming up with what can be gambled? A person who gambles money is going to run out of it at some point. One answer is providing gambling money as part of the necessity budget. A person can gamble until that runs out, then they must stop until the next paycheck comes along.

Another answer, one that exists in the 2010's, is computer gaming. Playing games is a form of gambling that doesn't require either necessity or luxury money.

Investing is not going to be as simple to organize. This will be done with luxury money, but the details of how to do this in the 2050's are not easy to forecast. It will likely center on dilettante activities, but how it will be organized will be different than 2010's investing is.

Additional Reading

This 18 Jun 17 WSJ Editorial, Zuckerberg’s Opiate for the Masses If we get ‘universal basic income,’ the millennials will never leave our basements. by Andy Kessler, talks about Mark Zuckerberg's vision of money and people's activities in the future. It is much like mine.

From the article, "At Harvard’s commencement last month, dropout Mark Zuckerberg told eager graduates to create a new social contract for their generation: “We should have a society that measures progress not just by economic metrics like GDP, but by how many of us have a role we find meaningful.” He then said to applause: “We should explore ideas like universal basic income to give everyone a cushion to try new things.” Who wouldn’t like three grand a month?"

This is describing what I call Necessity Money and Top Forty Jobs (dilettante jobs).


Money is something that will be transforming dramatically over the next few decades. It will divide into three general categories and each of those categories will be used to pay for activities that are distinct in the lifestyles of those living in the 2050's. Necessity money will buy the goods and services provided by TES. Luxury money will buy goods and services that are offered outside of the TES system. Investment money will be handled mostly by cyber and will buy the tools that cyber use to produce goods and services for humans.

All-in-all, handling money is going to be quite different than what we experience in the 2010's.



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