What Could the Future of Money Look Like?
We’ve been having a robust discussion around the idea of social capital over the past few days, and as the thread now contains over 100 great, thorough comments, I just want to create the opportunity to keep the thoughts flowing. For anyone just jumping in, if you’d like to get the background context, grab a coffee and read through Social Capital is not the same as Whuffie. If you’re short on time, here’s a brief summary:
Social capital is a term to describe the embedded value within a network. Some can be misled to assume it has a direct exchange-value because of our current association with what “capital” means. In fact, it cannot be the property of a single individual, but rather the property of a network, a commons, or a community – however you’d like to think of it. So what is it? Think of it as the foundation upon which a healthy, collaborative society is built. It’s comprised of trust, connectedness, interdependence, reciprocity, and social norms. (For instance, If you think of the current lack of trust society has in our financial institutions, you’ll see the correlation with the stability of our economic system.) Individuals contribute to the strength and depth of a society’s social capital through their actions and behaviors, but cannot individually possess it.
So if we hit the reset button, wipe away our assumptions, and think about a truly new economy – what is the mechanism for us to exchange value?
Some food for thought: Here is a recent clip of Douglas Rushkoff speaking at the Web 2.0 Expo, where he gives a brief history of currency and explains why we need a new system:
Essentially, he says that the operating system for money is obsolete in a hyperconnected world, and we need alternative models for directly exchanging value with each other. (peer-to-peer exchange) He says cash is artificially scarce, and has lost its utility value as it’s been ‘sucked out into investment capital and into the speculative marketplace.’ What we need now are new modes of currency based in abundance rather than scarcity. He gives a few examples of alternative currencies currently in experimental phases, which I’ll list here:
Time Banking – Creating Social Change by Weaving Community: This is an alternative currency system to be used in local communities. On their site, it’s described as follows:
At its most basic level, Time banking is simply about spending an hour doing something for somebody in your community. That hour goes into the Time Bank as a Time Dollar. Then you have a Time dollar to spend on having someone doing something for you. It’s a simple idea, but it has powerful ripple effects in building community connections.
ITEX Payment Systems – a small business community and barter network: This is intended to be a marketplace for cashless transactions between small business owners.
Superfluid: The Liquid Economy: This is another model experimenting with a virtual currency system, called ‘Quids’:
superfluid.biz is a b2b barter environment consisting of diverse business entities coming together to exchange services and products for fair value
Another site that was just brought to my attention via Twitter (thanks @matttrichards), The Metacurrency Project, is a great resource center for understanding the requirements of an Open Source Economy. Some great questions have been asked there so far, and I wonder how much more we can flesh out here.
This post is really just a primer for us to keep the ball rolling, so let’s discuss.
Update: Resources from the Twittersphere: