Economics Without Material Scarcity

[RadCap]

I don't follow this suggestion. And what is the connection between the computational system and the values created (or destroyed) by men? How would an individual decide what job to take or reject based on this system? Why would the amount of computing power help you determine what value would achieve better productive ends vs another value?

Put simply, you've lost me here.

[AndrewSternberg]

I assume there would be an unlimited number of nanomachines too. If not would it make sense to use THEM as a currency, since they are the link to everyone's material survival.

If they are unlimited, I can't really think of anything better than your 'reputation' system. But it still seems like an awkward system to understand for anyone not living in a 'non-contradictory city' .

[RadCap]

Well, obviously there would not be an infinite number of them. But, in the established nanotech society, they would be ubiquitous and as readily available or reproducable as any other matter made by nanites. So they would be essentially unlimited.

As to Reputation being an awkward system to understand if you don't live in AisA City, that is perhaps true. Like any new idea, it would definitely need some form of explanation. But, like most fictional universes (take Star Trek for instance), detailed explanations are not really required to get people to understand and accept the general principle. And this explanation does not have to occur in the very first story. It can unfold over many of them (though it would have to be grasped by the time I got to Verecundium).

What I like about this idea, besides it being the only intellectual, as opposed to physical based, 'currency' I could conceive (at least the only one which was directly connected to one's actions and ideas) - is that it concretizes another aspect of rational behavior - the judgement of others, (based upon their actions and ideas) so that the rational person can decide to act or refrain from acting in association with them or acting or refraining from acting towards certain goals. This would be a similar concretization as I am doing with the fallacies themselves. As such, the Reputation as currency concept definitely lends itself to numerous conceptual, constrasting and plot.

My purpose in posting was to see if anyone either had better ideas/ideas I had not considered as to what would qualify as a currency under such a civilization, or if there might be obvious (or not so obvious) problems with a Reputation currency. So far, there seem to be few objections.

[AndrewSternberg]

Your reference to how the 'Reputation' currency works in the blog world definately helped me understand the concept. As long as you can demonstrate the 'reputation' system concretly within the context of your fictional society, people will accept it.

Believe it or not, my anticipation of your series is ranked up there with Star Wars and Return of the King (extended version). Any guesses on when the project will disperse into the public, or does it depend too much on the decisions of people outside of your control (like publishers and whatnot)? Although they arn't really out of your control if you consider that the quality of your project is your means of controlling *them*.

[RadCap]

Many of the elements are 'beyond my control' at the moment - both directly related to the project, as well as in my life in general (health and whatnot). These make estimating a production timeline problematic. I forget what information I last gave on the project, so I'll provide a brief summary of where I am at the moment:

I have written out in some detail the overall story arc for the entire Logic Chronicles series. As it currently stands, I project 14 individual books, devoted to the fundamental concepts/fallacies of Logic. This includes creating the plot idea/theme of each, conceptualizing each individual fallacy, how they will be combated, the 'gimmick' of each story, etc.. In addition, I have also woven characters and situations which will allow a connection to additional Rational Man series (Origins - which deals with Metaphysics and Epistemology; and the League of Virtues - which deals with the virtues of rational men, and their corresponding vices). Its never too early to plan ahead.

Once that was complete, I began the story breakdown and design for the first 'episode' - the first book - adventure: "Contradiction". As this work has progressed, the AisA universe has come into sharper and sharper focus. I now have essentially established the scene/ideas/conflicts that run through each act in "Contradiction" and am now just working out some of the specific plot points/gimmicks/technology involved to make the plot turns 'work'. As such, I am doing alot of brainstorming and nanotech research and previsualisation (ie conceptual design work for characters, locations, craft, etc). And of course there is no way to put a time frame on all that (especially the brainstorming part).

Once that is fully completed, I will begin the final work on the script and then the design breakdown for each page of the book. At that point, I will be able to start finalizing the storyboards and complete the artwork.

While that doesn't give you any exact timeframes, it certainly gives you an idea of the work I, as one person, have to do - and thus an inkling of the time it might take.

It is gratifying to hear about your enthusiasm for the project though. It is encouraging that others anticipate it as much as I do. And based on the current work Ive done so far, I don't think you are going to be disappointed.

[AndrewSternberg]

You gave me more than what I asked. I now have a good picutre of where you are at and how much more still needs to be done. Thank you very much for the update.

[Soulsurfer]

My last comment in this thread was both poorly expressed and really hanging in the air, so I'll have to try again.

The question is: In a hypothetical scenario where any material goods or structures can be manufactured at virtually no cost, assuming the existence of advanced nanotech machines and an abundance of energy resources, what would be a proper medium of exchange?

Now obviously that medium of exchange couldn't be material itself, since all material could be reproduced and copied. If we rule out energy and time as units for exchange, I can only see one more (non-material) possible option: A system based on, and taking advantage of, the mathematical concept of infinity.

I can't really say how such a system would be designed, implemented or applied in the sphere of intelligent life and values. The difficulty is that you couldn't create the future equvivalent of credit cards, and use them as keys in a central cryptosystem (since they are material and thus could be copied). The "credit card" would have to be loaded with a digital key that just worked once (in a transaction) and then was erased and replaced by another digital key.

My first premise here is that the computations for all codes, keys and personal data in the system would, for a private hacker to access, require the equivalent of the original generator's computational power. And that's not just possible, since the original system would always have more power than any private computer (at least when that system is a distributed network of millions of quantum computers or whatever advanced machinery imagined).

My second premise is that it is possible to regard the "lock" and "key" in very advanced computations as units. There is only one objective lock-key combination. Thus a continuum may emerge, ranging from easy-to-crack combinations to virtually-impossible-to-crack combinations within the system (the latter having a higher value in a bank-note system).

My conclusion is that this system would enable "virtual dollars" to exist. The virtually-impossible-to-crack codes would be the equvivalent of today's not-easy-to-get gold-bars. The dollars would still be based on a scarcity in a non-material world, i.e. the limited supply of lock-key combinations within a closed system (closed in the sense of being limited to the total computational power available). When the total computational power increases, the system follows and updates the "dollars" so that a fortune is always anchored in the most recent virtually-impossible-to-crack combinations.

Money, in order to be money, can be accumulated and stored for later use. It must be static. Basically, my objection to your idea of using "Reputation" as a unit for the equvivalent of money (or currency or stock or whatever value-storage devices) is that reputation is NOT possible to store for later use in the same sense as money. It is not static, but rather dynamic. It derives from a constant process of actions and interactions over time and ever-changing contexts. You can't store a reputation in a bank, retire for 50 years, and then apply your reputation to a new context and expect it to have the same "reputational value" as before.

[Soulsurfer]

As such, I am doing alot of brainstorming and nanotech research and previsualisation (ie conceptual design work for characters, locations, craft, etc).  And of course there is no way to put a time frame on all that (especially the brainstorming part). 

Your project sounds very interesting. I'd like to share two of my thoughts in regard to the issue of nanotech (assuming you'll use nanotech in the conceptual background).

First of all, I think it is important not to separate the nanotech from the physical augmentation of man's body. If all material can be duplicated and reproduced in a future nanotech scenario, then it follows quite naturally that also most of man's body parts are reproduced and further developed. Things like memory chips, a wider range of sensations, layered visual fields, telepresence etcetera -- one may speculate that these technologies might lift off in the light of nanotech progress.

Secondly, I think it is unrealistic to expect the science of nanotech just to deal with physical reality. Hand in hand with nanotech is an equivalent development in computation and/or simulation systems. People will need cheaper simulations of chemical processes in the realm of nanotech, performed on computers rather than in physical reality. The "map" of material structures (how atoms and molecules are arranged) can also be reproduced, bit by bit (atom by atom), in computer systems. That opens up the door for designing virtual realities that serve as substitutes for real physical environments (such as a museum).

[A.West]

RadCap,

I'm not challenging your starting point, but I would challenge your subsequent conclusions. Nanotech or fantasy technology wouldn't change the economy as much as you think, fundamentally, it would just make everyone massively more productive and wealthy. One thing I've stated for a while is that the economy has ALWAYS been a knowledge economy, even during the supposed industrial age, it was primarily a knowledge economy. Carl Menger, the first Austrian economist, doesn't get enough credit for identifying this.

So how would an economy change due to fantastic technology?

Time horizons would lengthen, time preference would drop, along with interest rates.

In a way, reputation would become more obviously important.

My guess is that people would use shares in productive enterprises as a medium of exchange. Productive enterprises (corporations) connect knowledge assets into the provision of useful goods and services. With everyone rich, people would be more focused on reinvesting their savings in further productive endeavors. One of the most valuable assets a company has is its reputation for knowing how to produce value, deliver results to shareholders and clients, etc. Because companies are valued based on infinite time horizons of expected economic value added, that looks much like "reputation".

Even now, the best way to maintain and enhance your wealth is to own enterprises that are and will produce economic value added.

So my conclusion is that under your premises, people would use shares of enterprises as their medium of exchange. Furthermore, financial markets could plausibly be so advanced that even tiny organizations were able to "go public", their values would be constantly tracked on a network such that every grocery store (or equivalent) or vending machine would be able to handle your transaction, regardless of what company or companies you sell to buy something else.

BTW, under these premises, Intellectual Property, copyrights, Int. Property protection and theft, or Int.Prop. secrecy would be crucially important to all enterprises, and thus the value of their shares.

How's that for an off-the-cuff hypothesis?

[Soulsurfer]

So my conclusion is that under your premises, people would use shares of enterprises as their medium of exchange.

But shares/reputations are not static and durable commodites over time. Of course, if we're just discussing a medium of exchange within a limited context, shares will do the trick. But shares are not gold, if you follow me.

[DavidV]

Soulsurfer, your idea of using a computation-based currency is useful for all sorts of transactions where currency is not viable – for example, Bill Gates recently proposed using (prime-number based) computational payments for email as a means of combating spam. Other variations that require human intelligence – such as CAPTCHA tests, are already used on the majority of community-based websites, including this very forum.

RadCap, the idea of an economy without the need for material values sounds impossible to me, but I won’t get into that since it wasn’t your point. There may be specific applications where there is a real need for a fiat (non-material) currency, but for various reasons, this is unlikely to ever be necessary in the real world. When such cases do arise, a currency based on relatively difficult computations is sufficient for any scenario I can imagine. Even if by some miracle all difficult computations could be easily solved, a 100% fiat currency would be viable as long as the issuer could be trusted. (Unlike say, the Federal Reserve.)

Regarding reputation as currency, I’d say it has a flaw – it’s not a stable store of value because man can be such an unpredictable creature.

[DavidV]

FYI, an economic fallacy I noticed some posters making:

Currency has value as currency – not only as the material value it can be exchanged for. While a free economy posits a trend towards a commonly valued commodity currency (gold or diamonds), even a currency without any other valuable use (such as a useless but rare substance or fiat paper money) will have value as a means of exchange when there is a lack of superior alternatives.

[y_feldblum]

Yay! A. West takes my side: securities as commodity money go all the way!

A. West, do you think securities would individually be used as money, or would some small standardized set, such as certain low-risk market-indexed funds be commonly tendered and accepted as currency?

I endorse a system of payments for using email; it would be a great thing. Naturally, you would not demand payment from people you want to email you, such as family, friends, coworkers, business partners, etc. But you could legally demand and extract $100 compensation for every spam message you receive from its sender.

Fiat currency is a very bad idea. Currency has no value as currency, only as commodity. The commodity of fiat money is that you are allowed to keep your life and remain out of jail.

[Betsy]

"You would be trading for a claim on someone else's time. It might be a "You help me plow my field and I'll help you put up your barn" kind of bartering for labor that has been used when people are mostly self-sufficient and there isn't much of a circulating medium of exchange."

Ah - I was trying to avoid a barter system, for numerous reasons, including some I identified in previous posts.

What I had in mind was a labor barter system which had evolved into a money economy just as a goods barter system has with all the complex relationships expressed in a common monetary unit like the "dollar."

By the assumptions in your question, the unit could not be reduced to a physical commodity, but as long as the contractual relationships were specified and recorded and the "money" (like our current fiat money which is unbacked by gold) could not be debased by inflation or counterfeiting, the monetary value of any given person's time and effort would express the integration of the complex sum of all such voluntary relationships.

Of course, so does the stock market, and I really like Andrew West's proposal.

[A.West]

I thought about it further, and what I would expect is that the largest financial institution would create something like a low-risk index fund. This would essentially represent a diversified stake in the productive capacity of most or all enterprises. The financial institution could design the product in a way such that the value of these units remained stable (perhaps by breaking the fund into 2 units like income and growth, with the income tranche becoming the standardized currency unit, and the growth unit trading as the residual claim). The key concept is that the unit is private, it's issued by one or more financial enterprises (an index fund is reproducable, after all) and it essentially represents a claim on value produced by productive enterprises.

Instead of saying I own $1000 of the S&P500, one could say I own 1/1,000,000,000th (?) of the S&P500 companies, or one unit of "Westrands" or whatever the bank wanted to call the units.

[RadCap]

Besty

What I had in mind was a labor barter system which had evolved into a money economy just as a goods barter system has with all the complex relationships expressed in a common monetary unit like the "dollar."

The only problem with this comparison (goods barter to goods monetary/labor barter to labor monetary) is that a goods monetary system established one good as the intermediate exchange which everyone was willing to trade for (gold) so that they could then buy ultimately what they wanted. Unless you are suggesting that everyone is willing to accept one person's labor as the intermediate labor so he can then buy ultimately what they want, then you don't have a medium of exchange at all. You have direct (albeit elaborate) barter system still. And such a system is still open to some of the problems I have already names (including no control over whom you will work for - thus you have the prospect of a Galt having to work for a Stadler, with all that implies).

--

Soul

I was very specific in my questioning, because I did not want to spoil any other aspects of the stories. Rest assured, the ideas you have presented (along with many many more of the implications of nanotech) have already been taken into account. Beyond that I can say nothing more.

As to your computational explanation, I didn't see the answer to some of the questions I asked, including (most importantly) how this money is related to the actual productivity (or lack thereof) of any given individual.

You also say:

Money, in order to be money, can be accumulated and stored for later use. It must be static.

In a goods exchange, this is quite true. Stability helps greatly, because the primary and end goods fluctuate in value, and so a steady priced intermediate good makes economic calculation muuch easier. Of course, if we were on a true gold standard, if you look at the price of gold, it has fluctuated greatly over the decades. So the concept of stability here is a general one. There is no physical commodity - especially if it is used as a store of value - which will remain at a constant (or even consistant gradual growth in) value. However, compared to most products gold does retain more stability than most.

Basically, my objection to your idea of using "Reputation" as a unit for the equvivalent of money (or currency or stock or whatever value-storage devices) is that reputation is NOT possible to store for later use in the same sense as money. It is not static, but rather dynamic.

Reputation is something you ALWAYS have. And it's value is NOT static, as you say. But that is because what it represents is not static either. Reputation indicates the value another person could provide you at a given moment in a given context. As such it is a representation of a value which does fluctuate. So you do NOT WANT a static 'store' of it.

Now, why is this important? Because you are not buying goods from people anymore. You are buying their ability to conceive of new, better, and/or productive ideas. And that is NOT a static ability. Nor is it universal. A man who is a genius at zoological design may be a disaster at transportation design, etc. And an RQ would provide an insight into that fact. It would tell otherss what he has been successful at and what he has not, so that they may then decide if he is a great risk or a great asset to the production team. So RQ is a measure of value - and it is a measure of value of the thing being traded - you. Remember - it is not goods which are really being traded any more. It is your ability which is being traded now. And as such, there needs to be some measure of that. Reputation is the only cumulative meaasure I can think of in that respect.

You can't store a reputation in a bank, retire for 50 years, and then apply your reputation to a new context and expect it to have the same "reputational value" as before.

But this is a GOOD thing. Lets make your example more concrete. Take a Bill Gates of the future. He creates software for nanotech production which is valued by an enormous number of people. This collective 'vote' on his productivity is translated into an enormous boost in his reputation.

Now, as per your example, lets saay this Bill Gates ressts on his laurels for 50 years, and then decides to pursue some new endeavor in a different context. His reputation, while perhaps greater than some, will have diminished significantly from 50 yrs ago. As such, people may not be ass interested in using his ability over someone else's ability. The reason? It represents an increased risk. Why? BECAUSE 50 yrss have passed with nothing else to show for it - no additional value added to the pre-existing value. No further productivity, and thus no evidence that he WILL be a value today. Imagine today's Bill Gates. Now, imagine HE sits on his laurels and does nothing for 50 yrs. In the intervening 50 years, the computer industry will have advanced incredibly. But Bill Gates will have not. His knowledge and understanding of the industry will be far out of date. As such, his value to that industry will be QUITE reduced (in fact, it might be detrimental). And RQ would indicate that very clearly (because just as his value is reduced by that time, so is his reputation). In other words, the fact that reputation would diminish over time without additional productive activity, is a direct representation of reality. As such,it is a very GOOD thing - not a flaw in the system.

A

Your ideas are well explained. Thank you for your thoughts. They are interesting as well. I wonder if you would allow me to ask you some questions related to a few of the premises you appear to base your ideas upon.

In today's world, what are the primary reasons for forming a company? What of these reasons would stay the same in a nanotech world and what reasons would no longer apply? What effect would this have upon companies - short term and long term - in the nanotech world?

Along those lines - what are the reasons for the long term existance of a company in today's world. And, in a nanotech world, would any of these reasons apply? If so, which one's and why? Again, what effect would this have upon companies - short term and long term?

And finally, how do you measure the value of a company today (on a stock market)? What is the standard of measure which allows for comparative value to be established? Is it not the measuring value/standard a separate value from all the values being measured? In the nanotech future, such an independent value does not exist as a measure, as your suggesstion clearly acknowledges. As such, how does one determine the value of any company stock whatsoever? Without that standard, how does one determine which companies qualify for the index fund and which would not? In other words, to make your determination as to what you want to use as your standard of values (your index fund), don't you already have to have the very knowledge you are seeking TO establish?

Once you have the answers to these questions, consider once more your 'shares as money' suggestion. Would companies still exist in a form usable for your suggestion? And how would you determine the value of these companies in order to determine which of them you would use as your standard of values?

[A.West]

Reasons for forming a company (in random order)

Limited legal liability for owners.

Creating a legal entity of indefinite life, that exists independent of specific individuals.

Pooling resources in a formal way, including capital.

Can organize people and assets according to formal conceptual & contractual structures rather than those of a single person (though a single person can still control and singly own a corporation, and in theory one can have a one-man corp.)

I think these reasons would continue regardless of technological changes. Legal changes perhaps.

I don't want to get into your specific ideas of how nanotech would change the world, but I do think technological and productivity progress would make people more long-term oriented and thus more interested in indefinite-life corporate structures. Corporations would adapt to the needs of the economy as it exists, I guess be more intellectual-property focused, combining near-term tactics with long term strategic visions (which is already done).

One values securities by estimating the value of the spread between economic inputs and economic outputs now and into the future. Great value-creators create lots of value with the least amount of resources. Economic inputs include labor, capital, materials. Only materials would be dramatically affected by your nanotech scenario as I see it, capital and labor would be transformed somewhat but not fundamentally.

A large basket of productive enterprises would collectively produce most of what people wanted or wanted done for them. An individual company produces value at some ratio of total production. So there's a ratio amongst companies on that level. On a security valuation level, expectations of the future play an important role, such that a company that produces 10% of total economic wealth (approx. "earnings") but is expected to grow below average may only be valued by valuers at say 5% of the total market value of all securities. There is no universal law of valuation for all people at all times, expectations, reputations, and the decisions/perceptions of valuers play a role.

Think of it this way, we could say that the companies representing the total market create profit of $1 million. That represents the excess of produced value over consumed value. Each company contributes some portion of that, in a specific ratio to the total. Embedded in valuation expectations is all of the future profit values to be produced by the total market (e.g. $2 mn next year, $3 mn after that, etc.) and each company's contribution to that total. Looking at these present facts and future expectations people can decide a ratio of company vs company and also company vs total production, as well as company vs. specific things one wants. Given that these ratios are set, one can take a piece of this, divide it into units, and create a unit of exchange/standard of value that all participants could accept.

It does sound circular, but the economy is actually circular that way. Gold as money for example serves primarily as an intermediary between people doing and making things for one another. It's good protection against govt. intervention too. Private banks could conceivably take that intermediation process themselves. Among people who are well advanced economically, I think they would see a unitized claim on a pool of productive assets as a rational standard of value. They would not often try to use it just as traders rarely used gold. (Though it could be used in gaining control over other companies, etc.)

Who decides what goes into an index at the base of a monetary unit? The market created by valuers of securities, and the big financial institution or network of institutions that decide what they will use as an index. It could be every security, it could be a subset, it could be the lowest risk slice of a basket, little effected by say, changes in overall market valuation, like a commercial paper fund.

I favor a gold standard in our world, but you say that gold could be produced practically without cost.

From a certain perspective, the fiat U.S. dollar already represents a claim on the sum effort of productive Americans, it's just unfortunately the govt that is the intermediary in this process, which is value-destructive overall. A better society would do this in a value-additive way, which I think my proposal represents.

[RadCap]

I think our difference of opinion, and thus difference in premises for this scenario, comes about here:

I do think technological and productivity progress would make people more long-term oriented and thus more interested in indefinite-life corporate structures.

I believe men will not tie themselves to fixed productive associations for extended periods of time. Because man's ideas are what they are valued for primarily in the nanotech world, those whose talents and abilities best suit an individual project or even goal within a project, will be hired to achieve that end. Once the goal has been achieved, they will move on to the next project which requires their particular expertise (be it management, design, specific talent, specific knowledge, etc). They will not sit around hoping the same company which excelled at the one project in one field will excel at another project in the same or different field. They will be mostly free agents, going where their best judgements take them.

I used this example previously, but I think it bears repeating - motion picture production. A film crew is not sitting around in a company office waiting for a film to come along to create. One man (or a group of men) search for a script (an idea) to produce. Once found, they form a company specifically for the production of the project. Then they gather together the best people they can find for the specific project - from actors, to directors, to set designers, production manager, etc etc - who will BEST serve the PARTICULAR production. All these individuals come together - produce the film - and upon completion, move on to NEW production companies in order to produce a NEW project.

As such, the individual company life-span is relatively short-lived. It is born with, and dies after, the product is completed. And the reason for this is the LACK of a need to maintain a permanent physical infrastructure to facilitate this production. Cameras, film stock, locations, vehicles etc are all purchased solely for the production and then returned once the project is complete. In a nanotech world, these things would all simply be 'recycled' and new and better equipment would be 'grown' for a new project (and new people hired who know more about the new equipment/technology/whathaveyou). And each person would join this company (or decline) based on his evaluation of the merit and value of the project itself.

Given this model, I think you would see far fewer companies that exist beyond the length of time it takes to complete a project - though some may exist beyone just a single project - and some single projects may take long periods of time to complete.

Corporations would adapt to the needs of the economy as it exists

Given the context of the scenario, I believe it is individuals who will adapt to the needs of the economy, not fixed associations of people adapting to those needs. What is the benefit of keeping a fixed group and having to adapt them? Because, in a nanotech world, that is the only thing which would be fixed if a company existed beyond one project. Location would not be fixed. Equipment would not be fixed. Technology would not be fixed. Nothing would be the same then, except the people. And in such a dynamic society, keeping people - THE productive resource - fixed to one association across multiple pursuits, simply for the sake of fixing the association, would be the greatest waste of all.

--

Given this, I believe that basing a 'currency' on entities which will NOT have a long life in most cases, does not give you the stability of value I believe you are trying to achieve (thus your low risk index fund).

But that is not the only supposition I disagree with.

large basket of productive enterprises would collectively produce most of what people wanted or wanted done for them.

Actually, with more and more people free from material constraints of production, there would be fewer and fewer consentrations of enterprises supplying the wants and needs of people. There would be more diversity in production AND producers for any given product or service.

--

Now my biggest problem comes with this example:

Think of it this way, we could say that the companies representing the total market create profit of $1 million

Since we are positing a future in which $1 million (in any material value) will essentially be a meaningless phrase, my question was: HOW exactly do you DETERMINE this market worth or market 'profit' etc without ALREADY having a STANDARD of value? In order to create your standard of value, you seem to already be assuming that which you are trying to create. As I asked before, WITHOUT a pre-existing standard of value, HOW does one (no matter WHO they are) make an OBJECTIVE determination about comparative value of the companies you want to use AS your standard of values?

THAT is what I was saying was circular.

===

In all our contrasting viewpoints (not just A, but everyone), I don't really think any of us are wrong, because we are all proceeding from different premises and assumptions. And since this is a future radically different from one we are used to dealing with, I don't think any of us (including myself) can say with even close to certainty, that any of the assumptions is 'more right' than others.

As it stands, based on the assumptions I am making concerning a nanotech future (all of which I have not shared - and which I now realize would both take a lot of time - and would possibly spoil story ideas ), I feel comfortable (more so now that I have had these conversations) with a reputational system of valuations vs some form of representational system of valuations. So far, while some have presented ALTERNATIVE ideas, none have presented any substantive objections to a reputation based system. Thus I see no reason NOT to use such a system as opposed to these alternatives. And since there are a few story reasons to use such a system, I believe I will proceed down that road, vs the other options.

I want to thank everyone for their suggestions and ideas. I REALLY appreciate all the input you have provided. Please do not take my disagreement as evidence I consider them to be invalid. Consider it like someone asking for advice on different careers. While your advice may indeed be quite legitimate and valid, in the end, it IS optional. As such, the advice is quite valuable, even if the particular career is not pursued, for the advice does help one to see one's options when making a choice.

And for that assistance, I thank you all.

[neuromancer]

There are fundamental flaws to the so-called "reputation" theory. This system would be based on a totally subjective system, being that it is based on "how others percieve your reputation," not an objective one. Currency, as a medium of exchange between all goods and sevices that can be traded, needs to be, by defenition, objective. While an exchange between Wyatt and Rearden might enhance each other's "reputations" from our point of view, it would be degrading from the point of view of Wesley Mouch. But Wesley would consider a "transaction" between Mr. Thompson and Mr. Weatherby an enhancing transaction. My point is who sets the defenitions regarding how a transaction should enhance or degrade a person's reputation.

[ramKatori]

In school they fed me Malthus: population increases in geometric progression and resources increase in arithmetic progression and that is why China and the east is poor. In college it was Marxism.

The college library had von Mises and I read it because of Ayn Rand's suggestion. Hated his epistemology.

Menger made some sense. His theory of value was almost same as Objectivism. Still I could not see where I could go with his theory.

Reisman's book was a brain dump.

The only good book was by Henry Hazlitt.

I'm still waiting for a good economist.

[JMeganSnow]

For some good thoughts on the subject of nanotechnology as it relates to economics, I suggest you read The Diamond Age by Neil Stephenson.

Nanites are not metaphysical primaries; they do not come into existence without someone to design, build, implement, sell, distribute, support, and use them. They break down. They interfere with each other. The idea that nanotechnology would completely eliminate scarcity is foolish. Unless nanites are completely self-sufficient (unlikely; they'd have to be complicated little critters for that, and complex things are prone to malfunctions) and they can transmute one chemical element into another, there is still going to be scarcity.

The question is: WHAT will be scarce? I think the answer will remain what is has always been; human creativity.

[DavidV]

The college library had von Mises and I read it because of Ayn Rand's suggestion. Hated his epistemology.

Menger made some sense. His theory of value was almost same as Objectivism. Still I could not see where I could go with his theory.

Reisman's book was a brain dump.

The only good book was by Henry Hazlitt.

I'm still waiting for a good economist.

I just have to protest this. All these people were great thinkers and economists, and Mises is up there with Ayn Rand in his respective field. Whatever flaws they had in their philosophies do not detract from this.

[Bourgeois]

The benefits from trade arises because of scarcity; if there was no scarcity there would be no reason to trade, and therefore no need for money.

(The reason we trade is to gain material wealth, which implies that we want more than we already have, which implies that whatever we want is scarce)

When there is scarcity we can use the scarce goods (or a document proving property rights to those goods) as money.

[The Passion of the Koresh]

Here's my insane idea. In the absence of scarcity, things might be sort of inverted. I got this idea when I tried out Furcadia (a free online game where you look at virtual houses, play role playing games, solve puzzles, all the while dressed up as an animal), an experience I would not recommend to anyone save my worst enemy: Captain Planet. People there seemed to want others to see what they took the time to create, promising to take a look at the other party's work and "appreciate" it (make notes, criticize, be a sycophant, or whatever the terms are for "appreciation"). It's a similar situation in Furcadia as in the above scenario: objects created with clicks of a mouse, with negligible scarcity of material (memory).

So...perhaps people will pay others to acknowledge and experience their creations, art, and ingenuity. It's still a transaction between two or more self-interested persons, but in a different order than we're used to. If you accumulate wealth by "experiencing" other people (those people no doubt set the terms of what you should be looking for and how tactfully and genuinely you give your opinion), and then pay others to--well--verify your existence.

Edited April 24, 2005 by The Passion of the Koresh