The Future of Money

Watch as Dave Birch argues that the financial crisis and technological innovation means it is time to rethink our approach to money.

Listen to the full event: http://www.thersa.org/events/audio-and-past-events/2011/the-future-of-money

Category:

Education

Tags:

• the rsa
• rsa
• royal society of arts
• rsa events
• 21st century enlightenment
• talk
• debate
• discussion
• Dave Birch
• money
• economics
• finance
• Diane Coyle
• technology
• Royal Society Of Arts

[InvertedFox]

I thought he was going to talk about the ongoing process of technological unemployment rendering a large percentage of the population permanently jobless therefore making labor for wages obsolete as the basis of our economy... money as a concept, as an abstraction, is preventing us from consciously interacting with our precious finite resources in a sustainable way. Making all money digital etc. doesn't help anything! He could at least mention BitCoin if he is serious about that route...

[jcd302]

I guess he hasn't heard of BitCoin... yet he mentions World of Warcraft currency. I smell a gnome mage lurking about.

[makethelaughs]

This is an amazing interview, not because I agree with him but because he doesnt bring up really important and real issues such as how does money which concept based on infinite growth collide with a finite planet. Also the understanding of interest and how that works moment. And he never really focuses on this word but VALUE changes everything. Whatever currency there is it holds a value. Also technological unemployment?

[PokemonFriday]

The idea of a money revolution is a very backwards-thinking idea. Having multiple digital moneys is actually very similar to a bartering system, which leaves many who keep savings at a risk of unpredictable devaluation

[callous21]

What if inflation was pegged to population. Say 20 thousand per head.

Or what if people were paid using a percentage of the money supply.

[maceoremy]

He is discussing a transaction method of money which I agree with. However he has no answer about the creation of the digital money. How that money is created determines whether population is subject to continued devaluation of their savings.

[l0wfLoW]

Bullshit!

[TamaraOtello]

A Resource Based Economy would be my choice for a post-industrial world!

[kekeke01]

Haha he takes up world of warcraft gold as a good example? WoW has a notoriously dysfunctional economy with out of control inflation that can only be fought by destroying currency (for example raising repair costs, travel costs, and having huge prices for essential items that can only be obtained by NPCs). That destroyed money is never put back into circulation, and since anyone can farm money by killing respawning enemies, everyone can create a fortune and accelerate the inflation.

[StuLuminos]

Absolute shite. The future of money has got to be based on resources, not the abstract concept that it has become.

[InvertedFox]

@kmeadows100 Interesting points, and good job dealing with the 500 char limit. I essentially agree that this is a step in the right direction, and your examples of how currency decentralization may benefit society are insightful. The problem is, as far off as biosphere consciousness and direct, scientific resource management may be, our short term planetary situation is looking increasingly bleak. Eco-systems/life-systems in decline, the oil economy set to collapse etc.

[kmeadows100]

@InvertedFox Basically, I'm thinking that there could be multiple forms of exchange rather than just ONE for your geographic region. There could be a bit of democratization of exchange and the nation's GDP would not be the holy grail that it is now. People could choose to exchange in those things that they believed to be valuable and not be forced to use one specific currency. I suppose the idea of decentralization and multiple forms of exchange is what interests me the most.

[kmeadows100]

@InvertedFox It's hard to elaborate with 500 characters but... You have good points but I think the zeitgeist dream is still a ways off. Currently, governments have a monopoly on the method of exchange. However, if I could create an "account" of gold, for example, and make an electronic transfer from my phone to another I would "quasi-barter" for goods. People could begin to choose what method of exchange THEY prefer and not simply what is dictated by their particular geographic location.

[InvertedFox]

@kmeadows100 "I think a digital money system could have the surprising effect of relinking money or exchange with real commodities" - I don't see how this would be the case, perhaps you can elaborate more? As I understand it, the mechanism of money is an intrinsically disconnecting phenomena. Our connection to the planet, tangible resources and commodities is distorted by our obsession with money cycles - GDP, CPI etc. Rather than core life cycles reliant on sustainability, efficiency etc.

[kmeadows100]

A future without tangible money sounds scary, however, our paper money's value is based on something virtual already. I think a digital money system could actually have the surprising effect of relinking money or exchange with real commodities. It would be very easy to have accounts in different currencies or in gold, oil, heads of cattle etc. Paying with commodities would simply be pushing a different button your phone. No more "cash or credit?" but "dollars, euros, Bitcoins, gold, silver or.."

[stephentsang2000]

@InvertedFox The big conspiracy behind this electronic money scam is that those big banks don't need you to open a savings account or pay you any interest in the future cuz you have to rely on them to store your money anyway. If cash is cancelled, you can't even take a bus without the banks controlling your money by giving you a debit card or mobile phone transaction acct.

[InvertedFox]

@dgwbirch How would these "Microsoft Dollars" be created and put into circulation? Also, the banks channeling these new currencies and providing a payment function, would they offer "Microsoft Dollars" loans etc? If so, would these loans be based upon the 10% reserve loan system we currently use? I share your view that decentralized currencies is a step in the right direction, however I don't see this as a finality in social progression. Just as interested I am sure, but different motives!

[kd1s]

I have a swipe reader for my Android phone. Works very nicely.

[quietlike]

Can you do a RSAnimate to this?

[EagleScoutBSA100]

We need to go back to the gold standard. People say there isn't enough gold, that is just plain stupid. If there is not a lot of gold the value goes up to compensate. What happens when money that has nothing backing it is over printed? The value of the individual dollars go down, same thing happens if there are less dollars, the value goes up. Gold backed currency is the answer to out of control government printing of money leading to outrageous inflation. And that's the truth.

[cbrusharmy]

Cash has the benefit of encouraging frugality. Each frivolous purchase hurts more when you physically hand over the dough. Also, one's wallet can't be hacked, and it doesn't rely on batteries to operate.

[Ranger4564]

@dgwbirch links are not allowed, which sucks.

[Ranger4564]

@InvertedFox Exactly what I thought Inverted. Amazing that he took 18 minutes to say nothing, or worse, to say something completely misguided. How these people have the balls to actually get up there and misdirect entire civilizations, I'll never understand. Money is no longer a viable metric of anything for a significant portion of our population, and the technologies available today make it obsolete for all parts of our civilization, as you rightly stated.

[Tangerine597]

I wanted to share this video and YouTube gave me a message I've sent enough - HUH!!?? I will never use Youtube again if I don't have to if they can really do tha to us! Can someone confirm....

[dgwbirch]

@InvertedFox you are mixing up currency and payments. Microsoft might invent a new currency "Microsoft Dollars" but you might still use them on a Visa card or in a Barclays bank account. Personally, I suspect more decentralised currencies will come to replace more centralised currencies.

As for our client base, the multinational banking/telecommunications companies that we work for are just as interested as I am (and you are) in trying to figure out where this is all going.

[dgwbirch]

I don't understand how this comment system works - it keeps saying "error, try again" if include anything with slashes in at all!

Anyway, yes, go to the Tomorrow's Transactions blog and then put "bitcoin" into the search box. Look for the entry "a bit of a show".

[InvertedFox]

@dgwbirch In the proposed system how will new money be created? How exactly is this process going to decentralize currency control? I gather from a few of your blog posts that the banks will maintain control/regulation of currency but channel it digitally through mobile phone companies. Also, considering your client base is largely multinational banking/telecommunications institutions, do you not have somewhat a vested interest in pushing this direction?