A World (Online) Without Money | Hacker News Reader

A World (Online) Without Money

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I'm not sure he realizes what money is. Listia credits are money. It is actually the same system we use today. Dollars have no inherent use, but people value them because you can trade them for physical items that do have use. This is exactly what the Listia credits are. The only difference is that there has been no exchange rate set up between that and other forms of money, but I am willing to bet that this will come to.

Money is a mode of trade. When you sell somebody a computer, and use that money to buy a hamburger (a really expensive gourmet one) you are in essence trading that computer for a hamburger. (Ok, it is a little more complicated, but not much.)

Money is a good thing. To quote a certain author (who I won't name because it will cause more debate than it really deserves.) "Money is the material shape of the principle that men who wish to deal with one another must deal by trade and give value for value."

This so called "Age of abundance" is a dream that can not exist. And even if it could, I am not sure I would want to live in it. To live in a world in which everything is provided for me, with no work and no effort, is to live in a world with no purpose. It sounds more like hell to me.

There were other issues, but I don't have time right now to deal with them.

> To live in a world in which everything is provided for me, with no work and no effort, is to live in a world with no purpose.

Feeding and housing and clothing myself are not my "purpose", and many things which I find enjoyable would not be provided for me in an "age of abundance"; in fact, they are inherently things that no one else can provide for me.

I wish Yzupnick had left that part out, because the rest is true. Money falls out of a few simple assumptions, which just spewing them out in a simple HN comment (i.e. "please don't hammer me too much on the mathematical details") is something like: 1. For any given thing, different people have varying personal valuations of that thing. 2. As people have more of a thing, they value gaining yet more of that thing less per unit. 3. People can engage in the trade of goods.

From there it's a short step to bartering things for things I value highly with things I have too much of (or can make too much of) and therefore value less than my trading partner does, and from there only a slightly longer step before an economy develops in which there is a measure of fundamental market value, because the actors in the market conduct arbitrage until there are no more arbitrage opportunities, which mathematically implies the existence of a sort of standardized value measure.

I call money the most real abstract concept in the world. You can't actually have any of this "value", you can only have dollars or Euros or 1000 pounds of cabbage or something else real, but it underlies and informs every economic thing you do. You just barely can't touch it, it's just as real as it can be without quite being real. And money will exist until at least one of those three things is no longer true. (And even post-scarcity there will still be the little matter of time, and the trades thereof.)

(If this interested you, I really recommend at least the first few chapters of http://www.daviddfriedman.com/Academic/Price_Theory/PThy_ToC... .)

People value their time, but they don't value it like an economically-scarce commodity. For example, you may consider your significant other to have an "infinite line of credit" on your time, while you may actually spend more time actively avoiding people you don't want to spend time with, than the amount of time you'd end up spending with them (i.e. people can actually have a negative return on time—whereas the worst you can do with N dollars is to turn it into 0 dollars.) People are willing to give others as much of their time as they ask for, if they see some sort of benefit coming from it (e.g. monks living in a monastery their entire lives), while there is only a finite amount of money they'd be willing to spend in the same situation.

This is all because people do not rationally value their time vis. their finite lifespan, but unless you're expecting that to change somehow, you can just take that as a given.

Thus, since time is psychologically considered abundant, then assuming a world that is otherwise abundant, perhaps money would indeed be outmoded by something that captures the psychological value, rather than economic value, of time spent? I think Cory Doctorow's "whuffie" is a good start on that. Rather than whuffie changing as you give or take people's time (i.e. time-debt), it's actually a measure of willingness-to-lend-time, sort of like a credit score. If you borrow someone's bike and win a race with it, and they think that's cool, your time-credit-score goes up; if you wreck it or just disappear, and they don't like that, your time-credit-score goes down. The important bit here is that the credit score isn't actually tracking any sort of real debt, because, for the most part, people don't track time debt; they just write it off and re-evaluate how much time they'll be willing to lend you in the future.

"perhaps money would indeed be outmoded by something that captures the psychological value, rather than economic value, of time spent?"

That "something" would be a form of money. That was my point. If dollars were still around, there would be an exchange rate between dollars and whuffies, and as long as they could indeed be freely exchanged the eventual elimination of arbitrage opportunities (by virtue of exploiting them) would make them merely two more currencies. If dollars were not around but there were whuffies and huffies, both time-debt-backed currencies, there would be an exchange rate and the exploitation of arbitrage opportunities would make them look just like two currencies do today.

It does not take much for money to show up, and you would find that if such a new currency does arise and you insist that it's something new and "not moneyish" and you try to follow that up by your actions that you will be taken to the cleaners by people who know better. (In fact it's quite amusing to watch the desperate attempts by MMORPGs to avoid getting their currencies straight-up tied to dollars, and the only way to do that is to make every effort to ensure that there is no liquidity between the two currencies such that the balancing effects of the market can take effect, because otherwise they would end up freely convertible virtually overnight. I think the only reason they try to avoid this outcome so hard is the legal nightmare it would generate; the IRS is happy to tax anything that looks remotely like currency, by which I mean, this is not speculation, this is actual fact. You today can not dodge the IRS by making up your own currency.)

You basically said what I was coming here to say.

Money is any mechanism to store value that can easily and quickly be exchanged. Anything with sufficient durability and value per weight can be monetized if people choose to accept it in payment.

"Why would you want to do away with money? As it turns out money is too powerful an incentive. When you throw money into the equation, it tends to drown out other motivations such altruism, social norms and reputation. Dan Ariely has a wonderful example of this in his book “Predictably Irrational” where he describes how a nursery school tried to use cash penalties to prevent parents from dropping off their kids late. With the cash penalty the number of late drop offs went up (!) because now parents felt like they were paying for a service. The money completely overwhelmed feeling bad for imposing upon the teachers. Amazingly, money was so powerful that even when the school dropped the cash penalties the late drop offs stayed above their initial level."

Is it just me or does anyone find something wrong with analysis of the underlying motivations for this para?

My read is: The introduction of money changed the dynamics of dropping their kids off late from a moral obligation to a business transaction. It being a business transaction, the penalty now becomes the loss of some money as compared to a hit to your moral standing. For busy parents, they may prefer the monetary loss as compared to feeling like a bad parent. Hence the number of people dropping their kids off late increased. If this could be true, then money may NOT be the that powerful an incentive. In this case, moral reputation/standing is a more powerful incentive. The school should be appealing to that rather than using money as a penalty.

I think the focus of his post, which is that there are very powerful social forces at play that guide human behavior outside of a monetary transaction, is spot-on -- but it always has been like that.

What I greatly disagree w/ though is whether this is anything new at all or that the world is fundamentally heading towards an "age of abundance".

Why StackOverflow is kicking ass is the same reason we love HN. It's the community. That's it. No flimsy game mechanics. No monetary rewards or points involved (though like any large social group, there are demarcations for roles and status, like the HN karma). It's the gravitational pull of a strong community with shared interests. This is all textbook Seth Godin, nothing new here.

Strong communities have been budding since the dawn of civilization... so it's weird to say that the online world is pioneering this in any way for the offline world. What it is doing though is accelerating the community because of the sheer global scale of the web, which is unprecedented.

Money will always be driving the world, but more community-building tipping points to come.

Money is not disappearing, but it is simply evolving.

We're now seeing an economy based on the idea of money secured by cryptography evolving in a tiny corner of the internet. Most hackers here are not aware that such an economy exists.

Please enlighten us. Are they on TOR hidden services? Links?

[edited to sound less snarky. genuinely curious]

I thought it was actually gold stored in some southeast-asian vault.

We called it bitcoins and it is a Neal Stephenson plot device.

What's the take-up like compared to the only other tor-based system I'm aware of, eCache?

(web interface: https://ffij33ewbnoeqnup.onion.meshmx.com/)

It's not a tor-based system at all, though it can be used within the tor network.

It does have an active forum community, exchange markets, and the like.

My project for a new form of money:

http://ripple-project.org/

Everyone issues their own personal currency, but you only accept the currency of people you trust to make good on their obligations to you personally. For those you don't trust, the system finds intermediaries to exchange the buyer's obligations for those acceptable to the seller.

Lots of work needs to be done to make this useful, but I've had a system operating for several years now at http://ripplepay.com. Comments always welcome.

Online (at least on the margin), the cost of resources is already sufficiently close to zero so as to not matter.

If that's the case, why does StackOverflow need venture funding? VCs investing money in such sites are surely looking for returns in money. So, what's the OP really trying to say?

I must be missing something. Can someone please explain?

I think it's more about the marginal cost of one extra question on StackOverflow rather than the entire site. Unlike a physical good where there is an additional fixed cost of every unit the fixed cost of one more StackOverflow question or user is close to zero.

Call me paranoid, but I'm wary of Listia. Who regulates the issuance of credits which are used to purchase actual goods? (answer: Listia) What legal repercussions are stopping them from issuing credits to whoever they want? (answer: none)

And that's very different from paypal freezing accounts and keeping money arbitrarily how?

Paypal has the incentive to keep your money of, well, your money. Listia the company has considerably less incentive to mess with the credits. They are the government issuing the currency. Mess with it too much and they wreck their economy.

It's different because Paypal can't issue money, but Listia can.

From a legal standpoint, I honestly don't know... but doing something like that sounds like a good way to quickly go out of business, which would be much worse than the possible legal repercussions imho :-)

I had a similar idea a while ago... I called it BarterCred. I was excited about it until I really began a deeper examination.

The only way I could see to generate actual revenue was to win auctions (by printing credits) and then re-selling the things for real money. I wonder if they came up with something different.

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