by Roger Bourke White Jr., copyright July 2014
Over the next few decades money is going to change its meaning and function. We are seeing the start of this with all the interest in Bitcoin. The change is going to become more dramatic because the world we humans live in is going to change dramatically.
In a world where most manufacturing and service jobs are automated, "jobs" as we think of them today are going to be scarce. This means that in twenty years getting paid for a job will not be something everyone routinely experiences, and yelling "get a job" at someone to indicate they need to stop being a loser is going to have a different meaning.
In addition to all of the above, the function of money will change. That is the topic of this essay.
Since people are going to find other ways to show their value to the community besides jobs, they are going to get paid for something they do that isn't a job in the classic sense. Example from today: volunteer work -- the pay is feeling good and getting some perks. In the future most people will be doing things such as what is volunteer work today, and they will get compensated in some new fashion, it will be a new kind of money. Think of Bitcoin and other virtual currencies today, only with even more variety and more specificity on what they can purchase.
As the basic necessities of life become rights rather than something that has to be earned, these will drift out of the world that conventional money pays for. These "rights items" will be paid for with other payment systems. Think of food stamps today. In the future there will become more different kinds of moneys -- two among them will be "rights" moneys that buy necessities, and "covet stuff" moneys that buy luxuries we want but don't have to have.
Money in its classic sense will continue to serve to pay for things which people covet. These are things that people want, but aren't given to them as part of any right. A contemporary example of this is high school kids who want outrageously expensive footwear. They will have a right to shoes, and use some sort of coupon/money to get those. But if they want high-priced Nikes they are going to have to use "real money" to get those. That kind of money will come from a different source.
This change in what money means is going to be part of the wrenching change in what work means. This loss of "a job" as an indicator of solid social standing and income generation is going to be a harsh dislocation from our present-day values. Work and money are both going to be affected in surprising and sometimes painful ways.
Investing will change too. The concepts of saving to make money in the future and investing in business are going to become more and more exotic to average humans. With so much rights money floating around, saving will not be essential to a comfortable future. It will become just another style of luxury spending. Likewise, as manufacturing and service providing become more automated, the companies that do these will become more and more remote from human investors. This means picking good investments based on understanding business fundamentals becomes really hard to do. Even more than today, investing will either become automated and handled by investing programs, or become hard to distinguish from gambling.
Conversely, hand-to-mouth spending will grow. This style of dealing with money is instinct fueled -- even today many people learn how to spend this way quickly and comfortably. But how hand-to-mouth spending is handled will change. Borrowing and loaning hand-to-mouth money will be difficult because there will be even more safeguards in the future to keep people out of the "deeper in debt" cycle.
Gambling is instinct-fueled entertainment. It can be partly compensated for with video-games. For many people gambling is sitting for hours in front of a machine and pulling a lever. Video games can handle this ritual quite easily. The question becomes what kind of "money" will be at stake? "Freemium"-style video games of today offer insight into what the future will be like. What will be at stake is in-game money, not rights money or covet stuff money.
This 6 Mar 16 WSJ article, Get Ready to Be Told: You Don’t Know Money Financial Literacy Month is almost here. Is it a marketing gimmick? by Matthew Kassel, talks about the current state of financial awareness in the US and the world. It makes clear this topic is something with lots of emotion swirling around it.
From the article, "But apparently financial literacy is harder to encourage than May flowers. Recent surveys show that investors still aren’t adept at balancing their checkbooks. Only 57% of Americans passed a basic financial-literacy test, according to one recent global survey; in another survey, teens in the U.S. ranked between those of Russia and Latvia. Around the world, meanwhile, just one-third of adults are considered to be financially literate.
Perennially poor results have led experts to question not only the efficacy of Financial Literacy Month, but its stated aim: to improve the financial health and habits of Americans. Critics have suggested the month is a marketing gimmick for banks, while others claim that the whole notion of financial literacy is misguided."
As our lifestyle changes with increasing automation taking over manufacturing and service jobs, our money styles will change as well. We are going to have more kinds of moneys and they will serve to differentiate what we can buy. What we are entitled to we will buy with rights money, and when we want to buy luxuries we will use covet money. These will be just two of many styles of money we will be experiencing twenty years from now.