Why We Will Always Need Money

WHY WE WILL ALWAYS NEED MONEY

(Image from wikimedia commons)
(Author’s note, these thoughts are based on an ongoing discussion I have been having on an Internet forum, based on the suggestion that when robots take over our jobs, costs will be reduced so much that money will no longer be necessary)

Suppose, just suppose that everything was free. What would that mean? It would mean that everything is of equal value; that nothing is better than anything else.

This is clearly deeply problematic for evolution because it depends on....well, what? What is the one thing that must exist for evolution to get started and perpetuate? Replication? No. Fires produce offspring, at least in some sense. A spark from a 'parent' fire might ignite a new fire. But fires don't evolve. What is needed is heredity. For anything to evolve it must be possible to inherit something that is worth inheriting.

Now, there's a telling word: Worth. Evolution is a process that determines (unconsciously, of course) that some things are worth more than other things. This process can manifest itself in more than one way. It might consist of agents with purchasing power determining what is worth spending their wages on in a changing market of goods and services; it might consist of different phenotypes in environments with nature calculating the survival 'worth' of the genes that code for them; it might consist on something else but whatever it is there must be something worth inheriting.

THE WORK REQUIRED TO EFFICIENTLY SEARCH THE THEORETICAL SPACE OF ALL POSSIBLE INVENTIONS

In 1972, William Ogburn observed how "the more there is to invent with, the greater will be the number of inventions".

Why should that be the case? Well, Ogburn's claim is based on something called 'combinatorial explosion'. Which W. Brian Arthur illustrated in the following way. Suppose the sum total of all technologies was A, B, C, D and E.

Arthur says "New workable combinations might include these building blocks in different architectures (think of these as combinations AED and ADE, for example). And they may include them more than once: there might be redundancies (ADDE, ADEEE, for example). But let us be conservative and found possibilities only if they include or do not include building blocks. No different architectures, that is, and no redundancies. This would give us possibilities of double combinations such as AB, AE, BD; or triple ones like CDE, ABE; or quadruple ones, BCDE, ACDE, and so on.

How many combinations of these types can there be? Well, in a given new combination, each technology A, B, C, D or E may be present or not present. This gives us A or B or C or D or E present or absent- two possibilities for A (present or not), then these two times two for B, present or not. Counting from A to E this makes two times two times times two times two, which gives us 2^5 or 32 as the number of possibilities. We need to subtract the single technologies where only A, or B or C is present (these are not combinations), and also the null technology where no building blocks are present. Counting this way, we have 32 minus the original five, minus the null technology: 26 possibilities. In general, for N possible base elements, we get 2^N-N-1 possible technologies. For 10 building block elements this gives us 1013 combination possibilities, for 20 it gives 1,048,555...for 40 it gives 1,099,511,627,735....The possible combinations scale exponentially (as 2 to the power of N). For any particular number of building blocks the possible combinations are finite and for small numbers they do not look large. But go beyond these small numbers and they quickly become enormous.

Of course, not all combinations make engineering sense. Many workable possibilities might include processing chips with GPS technology; fewer would include jet engines with hen houses. But even if the chances are one in a million that something useful as a building block can be made out of a given set of building blocks, the possibilities still scale as (2^N- N-1) 1,0000,0000 or approximately 2^N-20. They still scale exponentially....

Even these crude combinatorics demonstrate that if new technologies lead to further new technologies, then once the numbers of elements pass some rough threshold, the possibilities of combination begin to explode".

So, the technium (Kevin Kelly's term for the sum total of all current technologies and related knowledge) is an evolutionary process, albeit one concerned with the relative success of different combinations of existing building blocks (the successful going on to be potential building blocks in further rounds of invention). All evolutionary processes require economic calculations to determine the relative success of any unit compared to any other unit. The idea that anything could usefully navigate the possibility space of technological innovation without doing any calculations of relative value, is preposterous. It would be like evolution occurring without cumulative selection.

WASTEFUL ROBOTS

To further illustrate the problem of assuming everything is free, suppose I decide I want a Big Mac so I head down to the local McDonalds, which these days is staffed and managed by robots. I imagine that these robots will be great workers, quickly and efficiently preparing the meals, keeping the restaurant clean and tidy, and other useful things relevant to running a fast-food store.

But when I get there, I find the robots all standing on one leg while saying "wibble" over and over again. Minutes turn to hours, and still they stand on one leg repeating that same nonsense word. Then, suddenly, for no rhyme or reason that I can figure, a few of them stop and instead start smearing ketchup all over the walls and pressing French fries into the sticky mess. The robots all become silent, staring at one corner of the restaurant for a million years before tearing up the seats and using them as clubs, bashing one another over the head until all the robots suffer catastrophic malfunction.

To me, these actions seem like a total waste of time but if the robots do not care about costs then they have no way of knowing what actions are worth doing or for how long. To them, cooking French fries, curing cancer, constructing quantum computers, piling up dog poo and walking around it, none of these activities are more or less valuable, a better or worse use of their time, because to them the question of value has no meaning. There are no costs.

What I am trying to get at here is that if artificial intelligences are to take over the job of running the economy and doing useful work, they will have to have some notion of value. Just like we have to, they will have to calculate the cost of doing X rather than Y, how long should be spent on Y, how much of Y is needed, and which method of producing Y is the best course of action. The only possible difference is that, unlike we who for reasons of practicality had to externalise those calculations into physical objects like coins and slips of paper or symbols like £ or $ that we can physically shuffle around or keep track of on paper or on computers, the robots may internalise (if that is the right word) all such calculations within a network that their minds all connect to. In some sense, then, we would never see them handle money, but they would still be using money, just money stripped of all its physical representation and evolved into pure calculations of relative costs.

WHAT IS MONEY, REALLY?

Whenever we talk about 'worth' we are talking about relative costs, relative value. Whenever there is relative value an evolutionary process must calculate it. This brings us to what money really is. Money is not a physical thing. Money is not gold, not dollar bills, not even symbols like $s and £s. It only seems like it is those things to us because, long long ago, humanity found it convenient to externalise and symbolise money as $s or gold coins or Steem dollars or what have you. Money is better thought of as being like a measurement, only it does not measure distance or weight or voltage etc, it measures relative value.

To say we will not need money is to saying we won't need to measure relative value or costs. This is as absurd as saying, 'in the future, kilometres will not exist'. Even if we got rid of all rulers, all tape measures, even if we went as far as wiping the word 'kilometres' from every storage medium and mind in the world that would not rid the world of kilometres because those things ARE NOT kilometres, just representations of kilometres. Kilometres would only disappear when the universe collapses back into its singularity.

Forgetting that money is, ultimately a measurement or calculation leads to some seemingly common-sense but actually absurd conclusions, such as the idea that it is possible to run out of money. An allegorical tale concerns builders who turn up to a construction site one day, only to find the foreman looking flustered.

"Lads, lads, we cannot get the job completed".

"Why not, boss?".

"We have run out of inches".

The builders look around. They see they have the materials, the tools, and the knowledge needed to get the job done. They point this fact out to their foreman.

"Doesn't matter", he says "Fact is we have been using too many inches, and now we have run out of them. So that's that".

The idea that inches are something you can run out of seems obviously absurd because an inch is merely an abstraction, representing a particular unit of measurement. But money, too, is ultimately nothing but a unit of measurement. It measures differences in cost and other economic things. You can't really run out of money, you can just have poor management of time, energy and materials.

THE MYTH OF MONEY

Why do we readily subscribe to the belief that money can run out? I think it may have something to do with what I call the ‘origin myth of money’.

There is a popular belief that before money existed, people relied on systems of barter. Such systems would have fallen foul of the ‘double coincidence of wants’: For a barter transaction to take place, I must want what you have, and you must want what I have. Some commodities were more likely to be accepted, and people began using these as intermediaries. The word ‘salary’ is derived from ‘salt’, so presumably people were once content to be paid in salt because they could be reasonably sure of it being exchanged for something more useful. Over time, we converged on a commodity that was used pretty much exclusively as a medium of exchange; something like coins. Money was born.

Because we think of money as a commodity, we imagine it is in finite supply and therefore exhaustible.

The story about the origins of money that I just retold, by the way, is fictional. Anthropologists have been searching for the fabled land of barter, a land in which people act just like today only with money removed, and found no evidence that it ever actually existed. That is not to say that nobody ever bartered. Rather, the evidence points to no actual commonly-used system of the form ‘I will swap my four eggs for your beef steak”. If you read economic textbooks, you may note how they all use imaginary examples of a barter-based economy. True, they may be based on real-world communities (‘imagine a tribal village…’, ‘imagine a small-town community…’) but they are never examples drawn from historical fact.

Quite simply, this tale that goes ‘in the beginning there was barter, and it was darned inconvenient so money was invented’ is capitalism’s creation myth. Most economists retell it, and it is a lie. Why perpetuate such a fantasy? David Graeber has argued that it is necessary to believe this is how money came into being, because it justifies arguing that economics is “itself a field of human inquiry with its own principles and laws- that is, as distinct from, say, ethics or politics”. Once you accept that, it follows that property, money, and markets existed prior to political institutions and that there ought to be a separation between the State and the economy, with the former limited to protecting private property rights and guaranteeing the soundness of the currency (some go further and say the government should be limited to protecting property rights only). In actual fact the emergence of markets and money has always depended on the existence of the State (whether markets and money will continue to depend on the state, regardless of technological development, is another matter.)

So, now we know that the commonly-told tale of money that goes 'first we bartered, than we used commonly-accepted commodities as intermediaries, then we developed coinage and finally we ended up with credit and debit cards' is false, what about the true origins of money?

THE TRUE ORIGINS OF MONEY

In the beginning, rather than engaging in barter trades, people would freely provide goods and services with the understanding that the favour would be returned at some point in the future. In other words, in some vague sense, credit came first. We might even say that credit is older than the human race. Studies of vampire bats have shown they will share blood with other bats that have not had a successful hunt, and that they remember which bats do not reciprocate the favour, not being charitable toward these selfish types.

The first step towards creating money came when people started to keep more precise track of obligations. This caused obligations to evolve into debts, because a debt is simply a quantified obligation. David Graeber explained, "the first step toward creating money comes when we start calculating much more specific debts to society, systems of fines, fees and penalties, or even debts we owe to specific individuals who we have wronged in some way...even the English word 'to pay' is originally derived from a word for 'to pacify, appease'- as in, to give something precious, for instance, to express just how badly you feel about having just killed his brother in a drunken brawl".

The authors of 'modernising money' suggest that 'ratios between various commodities were thus established to measure whether a gift or grievance had been adequately compensated, and over time, gifts and counter-gifts became quantifiable as credits and debts. In a sense this created money as a unit of account (although it did not exist in physical form)".

Graeber points out that money in the form of coinage emerged during times of war, and this was the primary reason why there was a shift away from credit and debt relationships to the use of precious metals. Graeber said "on the one hand, soldiers tend to have access to a great deal of loot, much of which consists of gold and silver...on the other, a heavily-armed itinerant soldier is the very definition of a poor credit risk.....while credit systems tend to dominate in periods of relative social peace, or across networks of trust (whether created by states, or, in most periods, transnational institutions like merchant guilds or communities of faith) in periods characterised by war and plunder, they tend to be replaced by precious metal".

As societies grew from tribal villages to nation states, with periods of peace and war, the need to quantify credit and debt so as to keep precise track of who owed what to whom, when the debt was repaid in full, and appropriate punishments for welching on a deal, lead in time to insurance, banking and financial systems, while precious metals evolved into coins with specific sizes, shapes, weight, and purity of gold/silver. In some sense, gold or silver coins have objective value. If somebody were to require the finest camel in return for payment of debt, there may be much disagreement over which camel fits that criteria. But a coin either weighs a certain amount or it does not, contains a certain purity of gold, or not. Being such a precise token of quantified debt, it is not surprising coinage became the dominant form of money.

A RETURN TO CREDIT

We can imagine a future in which people no longer have to hoard and spend cash in order to function in society. Indeed, we have been moving increasingly toward a 'cashless' society, using paper receipts backed by (not enough) gold; then we moved to credit and debit cards linked to bank accounts that were nothing but digits on a computer, not backed by anything other than faith in the creditworthiness of the State, and now we are seeing the blockchain emerging.

Maybe in the future nobody will pay for anything in the sense of having to produce coins, or a card to swipe or a phone to be scanned. Maybe people will just walk into stores, and walk out with whatever they want. But the machines that are doing all those jobs will still have to calculate the relative value of all possible work, all possible uses of resources. And that, remember, is what money really is, fundamentally. So money is still in operation, still providing its fundamental role in determining what needs to be done.

I think post-singularity, we will go back to networks of trust. The world will have become, as has often been said, a global village, and the robots will work to provide the individual with whatever he or she requests, provided that person is in credit. It could be that robots can harness energy and manipulate matter with such efficiency that doing favours for humans is so trivial one needs only to be not a totally, breathtakingly greedy and selfish swine in order for them to consider you 'in credit' and fulfil your wishes (assuming those wishes can be fulfilled given the current resources available to the robots and other obligations they are required to meet).

Just like we have to, they will have to calculate the cost of doing X rather than Y, how long should be spent on Y, how much of Y is needed, and which method of producing Y is the best course of action. The only possible difference is that, unlike we who for reasons of practicality had to externalise those calculations into physical objects like coins and slips of paper or symbols like £ or $ that we can physically shuffle around or keep track of on paper or on computers, the robots may internalise (if that is the right word) all such calculations within a network that their minds all connect to. In some sense, then, we would never see them handle money, but they would still be using money, just money stripped of all its physical representation; Pure money, just as chess-playing computers are not conscious of chess pieces and chess boards, just (in Hans Moravec’s words) “very efficient and compact representations of chess positions and moves” (pure chess).

Only when evolution comes to a complete end and no difference of any worth is going on in the universe will money cease to exist. Of course, a universe like that is dead. So, in a way, maybe it is right to say that one day you won't need to use money. You will be dead.

REFERENCES

The Ancestor’s Tale by Richard Dawkins
Debt The First 5,000 Years by David Graber
Technology: What It Is And How It Evolves by W. Brian Arthur
Modernising Money by Andrew Jackson and Ben Dyson
How Jobs Destroyed Work by Extropia DaSilva
Robot: Mere Machine To Transcendent Mind by Hans Moravec
WHY WE WILL ALWAYS NEED MONEY

(Image from wikimedia commons)
(Author’s note, these thoughts are based on an ongoing discussion I have been having on an Internet forum, based on the suggestion that when robots take over our jobs, costs will be reduced so much that money will no longer be necessary)

Suppose, just suppose that everything was free. What would that mean? It would mean that everything is of equal value; that nothing is better than anything else.

This is clearly deeply problematic for evolution because it depends on....well, what? What is the one thing that must exist for evolution to get started and perpetuate? Replication? No. Fires produce offspring, at least in some sense. A spark from a 'parent' fire might ignite a new fire. But fires don't evolve. What is needed is heredity. For anything to evolve it must be possible to inherit something that is worth inheriting.

Now, there's a telling word: Worth. Evolution is a process that determines (unconsciously, of course) that some things are worth more than other things. This process can manifest itself in more than one way. It might consist of agents with purchasing power determining what is worth spending their wages on in a changing market of goods and services; it might consist of different phenotypes in environments with nature calculating the survival 'worth' of the genes that code for them; it might consist on something else but whatever it is there must be something worth inheriting.

THE WORK REQUIRED TO EFFICIENTLY SEARCH THE THEORETICAL SPACE OF ALL POSSIBLE INVENTIONS

In 1972, William Ogburn observed how "the more there is to invent with, the greater will be the number of inventions".

Why should that be the case? Well, Ogburn's claim is based on something called 'combinatorial explosion'. Which W. Brian Arthur illustrated in the following way. Suppose the sum total of all technologies was A, B, C, D and E.

Arthur says "New workable combinations might include these building blocks in different architectures (think of these as combinations AED and ADE, for example). And they may include them more than once: there might be redundancies (ADDE, ADEEE, for example). But let us be conservative and found possibilities only if they include or do not include building blocks. No different architectures, that is, and no redundancies. This would give us possibilities of double combinations such as AB, AE, BD; or triple ones like CDE, ABE; or quadruple ones, BCDE, ACDE, and so on.

How many combinations of these types can there be? Well, in a given new combination, each technology A, B, C, D or E may be present or not present. This gives us A or B or C or D or E present or absent- two possibilities for A (present or not), then these two times two for B, present or not. Counting from A to E this makes two times two times times two times two, which gives us 2^5 or 32 as the number of possibilities. We need to subtract the single technologies where only A, or B or C is present (these are not combinations), and also the null technology where no building blocks are present. Counting this way, we have 32 minus the original five, minus the null technology: 26 possibilities. In general, for N possible base elements, we get 2^N-N-1 possible technologies. For 10 building block elements this gives us 1013 combination possibilities, for 20 it gives 1,048,555...for 40 it gives 1,099,511,627,735....The possible combinations scale exponentially (as 2 to the power of N). For any particular number of building blocks the possible combinations are finite and for small numbers they do not look large. But go beyond these small numbers and they quickly become enormous.

Of course, not all combinations make engineering sense. Many workable possibilities might include processing chips with GPS technology; fewer would include jet engines with hen houses. But even if the chances are one in a million that something useful as a building block can be made out of a given set of building blocks, the possibilities still scale as (2^N- N-1) 1,0000,0000 or approximately 2^N-20. They still scale exponentially....

Even these crude combinatorics demonstrate that if new technologies lead to further new technologies, then once the numbers of elements pass some rough threshold, the possibilities of combination begin to explode".

So, the technium (Kevin Kelly's term for the sum total of all current technologies and related knowledge) is an evolutionary process, albeit one concerned with the relative success of different combinations of existing building blocks (the successful going on to be potential building blocks in further rounds of invention). All evolutionary processes require economic calculations to determine the relative success of any unit compared to any other unit. The idea that anything could usefully navigate the possibility space of technological innovation without doing any calculations of relative value, is preposterous. It would be like evolution occurring without cumulative selection.

WASTEFUL ROBOTS

To further illustrate the problem of assuming everything is free, suppose I decide I want a Big Mac so I head down to the local McDonalds, which these days is staffed and managed by robots. I imagine that these robots will be great workers, quickly and efficiently preparing the meals, keeping the restaurant clean and tidy, and other useful things relevant to running a fast-food store.

But when I get there, I find the robots all standing on one leg while saying "wibble" over and over again. Minutes turn to hours, and still they stand on one leg repeating that same nonsense word. Then, suddenly, for no rhyme or reason that I can figure, a few of them stop and instead start smearing ketchup all over the walls and pressing French fries into the sticky mess. The robots all become silent, staring at one corner of the restaurant for a million years before tearing up the seats and using them as clubs, bashing one another over the head until all the robots suffer catastrophic malfunction.

To me, these actions seem like a total waste of time but if the robots do not care about costs then they have no way of knowing what actions are worth doing or for how long. To them, cooking French fries, curing cancer, constructing quantum computers, piling up dog poo and walking around it, none of these activities are more or less valuable, a better or worse use of their time, because to them the question of value has no meaning. There are no costs.

What I am trying to get at here is that if artificial intelligences are to take over the job of running the economy and doing useful work, they will have to have some notion of value. Just like we have to, they will have to calculate the cost of doing X rather than Y, how long should be spent on Y, how much of Y is needed, and which method of producing Y is the best course of action. The only possible difference is that, unlike we who for reasons of practicality had to externalise those calculations into physical objects like coins and slips of paper or symbols like £ or $ that we can physically shuffle around or keep track of on paper or on computers, the robots may internalise (if that is the right word) all such calculations within a network that their minds all connect to. In some sense, then, we would never see them handle money, but they would still be using money, just money stripped of all its physical representation and evolved into pure calculations of relative costs.

WHAT IS MONEY, REALLY?

Whenever we talk about 'worth' we are talking about relative costs, relative value. Whenever there is relative value an evolutionary process must calculate it. This brings us to what money really is. Money is not a physical thing. Money is not gold, not dollar bills, not even symbols like $s and £s. It only seems like it is those things to us because, long long ago, humanity found it convenient to externalise and symbolise money as $s or gold coins or Steem dollars or what have you. Money is better thought of as being like a measurement, only it does not measure distance or weight or voltage etc, it measures relative value.

To say we will not need money is to saying we won't need to measure relative value or costs. This is as absurd as saying, 'in the future, kilometres will not exist'. Even if we got rid of all rulers, all tape measures, even if we went as far as wiping the word 'kilometres' from every storage medium and mind in the world that would not rid the world of kilometres because those things ARE NOT kilometres, just representations of kilometres. Kilometres would only disappear when the universe collapses back into its singularity.

Forgetting that money is, ultimately a measurement or calculation leads to some seemingly common-sense but actually absurd conclusions, such as the idea that it is possible to run out of money. An allegorical tale concerns builders who turn up to a construction site one day, only to find the foreman looking flustered.

"Lads, lads, we cannot get the job completed".

"Why not, boss?".

"We have run out of inches".

The builders look around. They see they have the materials, the tools, and the knowledge needed to get the job done. They point this fact out to their foreman.

"Doesn't matter", he says "Fact is we have been using too many inches, and now we have run out of them. So that's that".

The idea that inches are something you can run out of seems obviously absurd because an inch is merely an abstraction, representing a particular unit of measurement. But money, too, is ultimately nothing but a unit of measurement. It measures differences in cost and other economic things. You can't really run out of money, you can just have poor management of time, energy and materials.

THE MYTH OF MONEY

Why do we readily subscribe to the belief that money can run out? I think it may have something to do with what I call the ‘origin myth of money’.

There is a popular belief that before money existed, people relied on systems of barter. Such systems would have fallen foul of the ‘double coincidence of wants’: For a barter transaction to take place, I must want what you have, and you must want what I have. Some commodities were more likely to be accepted, and people began using these as intermediaries. The word ‘salary’ is derived from ‘salt’, so presumably people were once content to be paid in salt because they could be reasonably sure of it being exchanged for something more useful. Over time, we converged on a commodity that was used pretty much exclusively as a medium of exchange; something like coins. Money was born.

Because we think of money as a commodity, we imagine it is in finite supply and therefore exhaustible.

The story about the origins of money that I just retold, by the way, is fictional. Anthropologists have been searching for the fabled land of barter, a land in which people act just like today only with money removed, and found no evidence that it ever actually existed. That is not to say that nobody ever bartered. Rather, the evidence points to no actual commonly-used system of the form ‘I will swap my four eggs for your beef steak”. If you read economic textbooks, you may note how they all use imaginary examples of a barter-based economy. True, they may be based on real-world communities (‘imagine a tribal village…’, ‘imagine a small-town community…’) but they are never examples drawn from historical fact.

Quite simply, this tale that goes ‘in the beginning there was barter, and it was darned inconvenient so money was invented’ is capitalism’s creation myth. Most economists retell it, and it is a lie. Why perpetuate such a fantasy? David Graeber has argued that it is necessary to believe this is how money came into being, because it justifies arguing that economics is “itself a field of human inquiry with its own principles and laws- that is, as distinct from, say, ethics or politics”. Once you accept that, it follows that property, money, and markets existed prior to political institutions and that there ought to be a separation between the State and the economy, with the former limited to protecting private property rights and guaranteeing the soundness of the currency (some go further and say the government should be limited to protecting property rights only). In actual fact the emergence of markets and money has always depended on the existence of the State (whether markets and money will continue to depend on the state, regardless of technological development, is another matter.)

So, now we know that the commonly-told tale of money that goes 'first we bartered, than we used commonly-accepted commodities as intermediaries, then we developed coinage and finally we ended up with credit and debit cards' is false, what about the true origins of money?

THE TRUE ORIGINS OF MONEY

In the beginning, rather than engaging in barter trades, people would freely provide goods and services with the understanding that the favour would be returned at some point in the future. In other words, in some vague sense, credit came first. We might even say that credit is older than the human race. Studies of vampire bats have shown they will share blood with other bats that have not had a successful hunt, and that they remember which bats do not reciprocate the favour, not being charitable toward these selfish types.

The first step towards creating money came when people started to keep more precise track of obligations. This caused obligations to evolve into debts, because a debt is simply a quantified obligation. David Graeber explained, "the first step toward creating money comes when we start calculating much more specific debts to society, systems of fines, fees and penalties, or even debts we owe to specific individuals who we have wronged in some way...even the English word 'to pay' is originally derived from a word for 'to pacify, appease'- as in, to give something precious, for instance, to express just how badly you feel about having just killed his brother in a drunken brawl".

The authors of 'modernising money' suggest that 'ratios between various commodities were thus established to measure whether a gift or grievance had been adequately compensated, and over time, gifts and counter-gifts became quantifiable as credits and debts. In a sense this created money as a unit of account (although it did not exist in physical form)".

Graeber points out that money in the form of coinage emerged during times of war, and this was the primary reason why there was a shift away from credit and debt relationships to the use of precious metals. Graeber said "on the one hand, soldiers tend to have access to a great deal of loot, much of which consists of gold and silver...on the other, a heavily-armed itinerant soldier is the very definition of a poor credit risk.....while credit systems tend to dominate in periods of relative social peace, or across networks of trust (whether created by states, or, in most periods, transnational institutions like merchant guilds or communities of faith) in periods characterised by war and plunder, they tend to be replaced by precious metal".

As societies grew from tribal villages to nation states, with periods of peace and war, the need to quantify credit and debt so as to keep precise track of who owed what to whom, when the debt was repaid in full, and appropriate punishments for welching on a deal, lead in time to insurance, banking and financial systems, while precious metals evolved into coins with specific sizes, shapes, weight, and purity of gold/silver. In some sense, gold or silver coins have objective value. If somebody were to require the finest camel in return for payment of debt, there may be much disagreement over which camel fits that criteria. But a coin either weighs a certain amount or it does not, contains a certain purity of gold, or not. Being such a precise token of quantified debt, it is not surprising coinage became the dominant form of money.

A RETURN TO CREDIT

We can imagine a future in which people no longer have to hoard and spend cash in order to function in society. Indeed, we have been moving increasingly toward a 'cashless' society, using paper receipts backed by (not enough) gold; then we moved to credit and debit cards linked to bank accounts that were nothing but digits on a computer, not backed by anything other than faith in the creditworthiness of the State, and now we are seeing the blockchain emerging.

Maybe in the future nobody will pay for anything in the sense of having to produce coins, or a card to swipe or a phone to be scanned. Maybe people will just walk into stores, and walk out with whatever they want. But the machines that are doing all those jobs will still have to calculate the relative value of all possible work, all possible uses of resources. And that, remember, is what money really is, fundamentally. So money is still in operation, still providing its fundamental role in determining what needs to be done.

I think post-singularity, we will go back to networks of trust. The world will have become, as has often been said, a global village, and the robots will work to provide the individual with whatever he or she requests, provided that person is in credit. It could be that robots can harness energy and manipulate matter with such efficiency that doing favours for humans is so trivial one needs only to be not a totally, breathtakingly greedy and selfish swine in order for them to consider you 'in credit' and fulfil your wishes (assuming those wishes can be fulfilled given the current resources available to the robots and other obligations they are required to meet).

Just like we have to, they will have to calculate the cost of doing X rather than Y, how long should be spent on Y, how much of Y is needed, and which method of producing Y is the best course of action. The only possible difference is that, unlike we who for reasons of practicality had to externalise those calculations into physical objects like coins and slips of paper or symbols like £ or $ that we can physically shuffle around or keep track of on paper or on computers, the robots may internalise (if that is the right word) all such calculations within a network that their minds all connect to. In some sense, then, we would never see them handle money, but they would still be using money, just money stripped of all its physical representation; Pure money, just as chess-playing computers are not conscious of chess pieces and chess boards, just (in Hans Moravec’s words) “very efficient and compact representations of chess positions and moves” (pure chess).

Only when evolution comes to a complete end and no difference of any worth is going on in the universe will money cease to exist. Of course, a universe like that is dead. So, in a way, maybe it is right to say that one day you won't need to use money. You will be dead.

REFERENCES

The Ancestor’s Tale by Richard Dawkins
Debt The First 5,000 Years by David Graber
Technology: What It Is And How It Evolves by W. Brian Arthur
Modernising Money by Andrew Jackson and Ben Dyson
How Jobs Destroyed Work by Extropia DaSilva
Robot: Mere Machine To Transcendent Mind by Hans Moravec