Economists to me: abolition of money

[PRC]

An economy of abundance.  Check out Iain Banks Culture novels.

[The Minsky Moment]

I was writing an small essay on the abolition of money for a SF group. What would be the probable consequences of abolishing money?

In an fictive setting?  Whatever you want it to be.

[Josquius]

Ships and robots will need to be built, and have ships have finite transport capacities.  Someone will need to decide how many to build, how and where.

The robots will build them. There'll be more than enough

At any rate, what good is giving everyone the resources of a million planets when there are only a small handful of worlds that can actually be reached and exploited?

Obviously this wouldn't be the case.

Space is big, but I want a nice seaside villa on a certain beach on Earth. Let's say a million more people want exactly that villa. It becomes a scarce good. I don't care that I could have a much bigger villa with a much nicer beach that happens to be a gazillion lightyears away on some strange planet.

One offs like that and for instance original works of art are the only things where there wouldn't be 'infinite resources'. But then even today for the very rich this holds true. No matter how much he wants it a billionare isn't going to be putting up the mona lisa in his living room

[Neil]

Ships and robots will need to be built, and have ships have finite transport capacities.  Someone will need to decide how many to build, how and where.

The robots will build them. There'll be more than enough

At any rate, what good is giving everyone the resources of a million planets when there are only a small handful of worlds that can actually be reached and exploited?

Obviously this wouldn't be the case.

It'd never happen.

[Josquius]

It'd never happen.

That however is a question of whether we'll ever get out into space or not.
The initial question here seems to be built upon the assumption that this has passed by default (talk of big/small spaceships).

[Alatriste]

@Yi

Ah, but I'd like to hear how a cashless, technologically advanced society could work without money and without state/communal ownership of production. Any idea?

You'd end up with cash eventually.  Start with barter, then you start using some commodity as the common denominator (how many bushels of wheat will you give me for this house?), then you replace the physical bushels of wheat with book entries or paper scripts.  Voila, money.

Actually I agree with you wholeheartedly.

That's the reason I think a society without money would necessarily be collectivist, and probably undemocratic. If it were democratic, then the average citizen would have to be so radically egalitarian that his ideas would seem incredibly exotic and alien to us. The Future is a foreign country, they say, but...

Money is so useful that keeping it abolished would demand a constant official effort... and very probably an strong law enforcement effort too. And such a system would collapse swiftly unless some collective entity provided for the basic needs of the citizens.

An economy of abundance.  Check out Iain Banks Culture novels.

I have never read Banks. I will check them, PRC.

A hell of a lot of allocation of resources is about social status rather than need. The simple provision of vast numbers of consumer goods does not meet this need for status.

Richard, that's exactly the kind of consequence I'm interested in. Society could be egalitarian in economic means, but status seems a basic human aspiration... how would people acquire and display publicly a higher social status in an egalitarian environment? Perhaps smart uniforms and medals would be popular, for example... 'Look, the neighbor has got the Teaching Knight's Cross with Oak Leaves' 

[Richard Hakluyt]

I'm sure you have heard of them but this is a good place to remind you of sumptuary laws.

http://en.wikipedia.org/wiki/Sumptuary_law

It's possible to imagine a society where consumption of various types was cashfree but "earned" by one's social rank. The rank being determined by one's perceived contribution to society.

That would still be inefficient compared to cash though. eg for services renedered they might give me an upmarket car (not interested) whereas with cash I could stay at more upmarket hotels (increasingly interested as I get older).

[grumbler]

Alariste, I tho=ink that you could have a society without currency, but not one without money.  There will always be some good (or basket of goods) that is fairly imperishable and whose supply is less than demand.  This good will become the means of storing value and of reducing transaction costs.  If the government abolishes currency, this might be tulip bulbs, slivers of the True Cross, rare metals, or something else, but you can be sure that it will arise, because even in an economy of plenty, people will want to store value "just in case."

What you would see in the economy of plenty is that the "price" of many goods (and some services) would be zero, much like the price of air is for our economy.

[Malthus]

It would I suppose be possible to have an economy based on personal influence and celebrity. The "scarce resource" could be, for example, being seated at a good restaurant; only available if the guy at the door recognizes who you are; and he's working the door, in turn, because that would be his claim to fame ...

In such a society, fame would be of course all-important. If it's a utopia, fame would be achieved through great accoplishments in the arts and sciences. more realisticly, there would be a race to the bottom and society would be dominated by people who make Paris Hilton look like an exemplar of good taste. 

[CountDeMoney]

Abolition of money?  Just keep voting Republican, they'll make sure Wall Street makes as much of it disappear as possible.

[Martinus]

Alariste, I tho=ink that you could have a society without currency, but not one without money.  There will always be some good (or basket of goods) that is fairly imperishable and whose supply is less than demand.  This good will become the means of storing value and of reducing transaction costs.  If the government abolishes currency, this might be tulip bulbs, slivers of the True Cross, rare metals, or something else, but you can be sure that it will arise, because even in an economy of plenty, people will want to store value "just in case."

What you would see in the economy of plenty is that the "price" of many goods (and some services) would be zero, much like the price of air is for our economy.

The part about services is pretty much crucial, imo. While it is possible to imagine an economy where most goods would be so plentiful, they would be pretty much worthless (and free), it would be a different story with services. Unless a service can be performed by a robot or some other entity that is also not an actor in the economy (an animal, a slave, a specially bred creature that does not think economically etc.), then anyone performing the service would obviously demand something for it, since otherwise they would have no incentive to perform it (since "free time" is a commodity with inelastic supply).

[Zanza]

An economy of abundance.  Check out Iain Banks Culture novels.

The Culture only works because the humans in it are not free. They are ruled by extremely powerful AIs.

[Faeelin]

It would I suppose be possible to have an economy based on personal influence and celebrity. The "scarce resource" could be, for example, being seated at a good restaurant; only available if the guy at the door recognizes who you are; and he's working the door, in turn, because that would be his claim to fame ...

In such a society, fame would be of course all-important. If it's a utopia, fame would be achieved through great accoplishments in the arts and sciences. more realisticly, there would be a race to the bottom and society would be dominated by people who make Paris Hilton look like an exemplar of good taste. 

See, but then you get into the issue of valuing fame and trading it around.

@Zanza: They're as free as you and I are.

[Malthus]

It would I suppose be possible to have an economy based on personal influence and celebrity. The "scarce resource" could be, for example, being seated at a good restaurant; only available if the guy at the door recognizes who you are; and he's working the door, in turn, because that would be his claim to fame ...

In such a society, fame would be of course all-important. If it's a utopia, fame would be achieved through great accoplishments in the arts and sciences. more realisticly, there would be a race to the bottom and society would be dominated by people who make Paris Hilton look like an exemplar of good taste. 

See, but then you get into the issue of valuing fame and trading it around.

@Zanza: They're as free as you and I are.

In many cases, it will simply be a matter of comparison: I have a scarce opportunity or commodity, so who shall it go to - A, B or C? The higher status person getting it.

The assumption being that this society is so wealthy that all possible "needs" of a routine and subsistance level are as free as air.

[Martinus]

The more I think about it, the more I think that a society with everything being plentiful would simply be impossible. That's because human progress and human needs are not finite.

I mean, from a perspective of a 17th century human, a modern society like say Sweden, would be pretty much providing for all human needs for free - I bet you could live from welfare and socialized medicine at a level that is at least as good if not better as that of a 17th century person. But since then we have developed new goods and services that need to be paid for. There is no way to assume that even if our society reaches a level when all our modern needs are satisfied for free, we won't have to spend money to, say, glide on the rings of Saturn or prolong our life to live 500 years, and so on.