Why would money or any other means of exchange need to exist if AI, robots, automation and nanotechnology produce all goods and services?

Question

Let's say almost everyone is now jobless but almost all goods and services are made by machines including nanobot swarms and 3D printing. Even the government and the justice system in this futuristic world is run by Artificial Intelligence. Why would the concept of money/currency/ means of exchange still need to exist if the population cannot have any job, and Unconditional Basic Income is just a temporary solution?

OBS: I have been reading about post scarcity and resource based economies and from what I understood money would not need to exist by then because technological developments would provide abundance.

Answer 1

You would need some sort of mechanism to stem greed. People taking more than their share.

In the situation you are talking about, all energy would likely come from the sun; or indirectly from the sun via wind power; or perhaps from lunar gravitational disparities via tidal power generators.

In any case, the amount of energy is finite, the work that the robots can do is finite, and you need some way to regulate how it is "spent" so that everybody gets their fair share.

One way of doing that, in an entirely fair way, is to issue every person periodic "coupons" for their fair share of energy, and then let them "spend" those in whatever way they wish. Including donating any of their spare energy budget to others, or saving them up to build a house, or take a ski trip, or gamble with them to try and grow them, etc.

The energy coupons would then be the equivalent of money.

Without them, the demand for services might easily outstrip the capacity of the robots to provide, and indeed outstrip the capacity of the energy producing system to provide.

Nothing is infinite, but the closest we have is human "want". I want a bigger house. I want a newer car. I want a bigger yard to play in. I want to eat in the best restaurants in the world. I want to travel and stay in luxury hotels.

We simply cannot accommodate everything that everybody wants, there must be some system of rationing it fairly -- and that would be the role of Money, even if we used it to split up the total energy supply with perfect equality.

Answer 2

Here's a fairly simple illustrative example of why using numbers to express a uniform measure of value (money) is just so amazingly useful that we're not going to give it up....

Imagine you're going to the center of a large city. You have three ways to get there. You can drive your car and park at a parking meter (\$1 for fuel, plus \$3 for the meter). You can buy a ticket and ride the bus (\$2). Or you can puff your way there on your bicycle (Free). Which one do you choose?

• It's a classic trick question from Freshman microeconomics: For most folks, those costs are insignificant. If the cost seems insignificant, then most folks will use a different criteria (like convenience or enjoyment) instead of cost. People make lots of convenience-instead-of-cost decisions every day already. The money is still there, but it's so small that people don't pay much attention to it.

Let's say there's a popular concert going on, so the city has raised the parking meter rates from \$3 to \$300 (just for today) in that neighborhood order to prevent gridlock. The bus and bike costs are unchanged.

• The cost of one method is now significant, so most folks are likely to substitute a different mode of travel. Some folks will be willing to pay that sky-high meter rate for close parking.

The upshot is that Money provides a way to people to evaluate and prioritize their purchase options. Even small purchases. And recall the parking meter rate change: Money provides a way to balance supply and demand. And, of course, money also provides a way to save or lend value.

So the answer to the question is 'Yes, money will still be needed.'

Note that "everyone is now jobless" and "almost all goods and services are made by machines" are not relevant to the question of whether money would still be needed. Those inputs would determine incomes and prices...which would still need to be denominated in money to be understandable.

A post-scarcity economy could be described as prices for most of those machine-provided common goods and services (rent, food, clothing, education, health care, etc.) are simply so low that they are not worth fretting much about (like a normal parking meter). Even at the income level of all those jobless folks...who might just be "employed" part-time after all. Humans are social -- we generally like interacting with other real, live humans. Somebody needs to give tours at Chateau Picard winery and be waiters at Sisko's Creole Kitchen restaurant. They just don't need to do it all day everyday to make the rent anymore.

Answer 3

Many things in today’s world are not expensive because they are hard to manufacture.

Take houses: Here in Austria a significant part of the cost in buying a house is the price of land. A house in the center of Vienna doesn’t cost millions of Euros because of the price of timber and bricks. It costs that much because other people would like to live there too.

Take movie actors: Famous movie actors don’t make millions because their acting is that good.

Take stock prices: WhatsApp sold for 19 billion US dollars. Much much more than programming the app and setting up a few servers would cost.

Take art: With a good printer you can make an almost perfect replica of the Mona Lisa. And yet the original is still worth millions and people come to see the original.

Humans always find a way to want more and spend more.

The majority of people here in Austria basically live in a post-scarcity world. They can afford more food than they could ever eat. They occupy homes with more rooms than people living in them. They have a basically limitless supply of clean water. And yet they still want more. I know people who’d only have to work 5h/week to afford all of the above. Yet they still insist on working >40h weeks because they think they need an even bigger home, A/C, a second or third car and so on.

Nothing in the Universe is infinite, at some point we’d even run out of stars if we sold them.

Answer 4

Because, unless there are no human people left there are going to be goods and/or services that fall outside the realms of machine preparation and delivery and people are going to have to find an equitable way to recompense each other for these. Money already exists so it is likely to endure as that means of recompense. What kind of goods and services am I thinking about?

• Food prepared by human hands with that X factor that we never managed to imbue into a cooking bot, possibly because we never tried/actively prevented the transfer.

• Personal service, professions like butler exist not because a butler does anything that their employer can't get done by someone temporarily brought in, or in fact by a machine, but because there is a certain cachet to hiring a person to perform those tasks.

• "Companionship", while it may become a rather niche market their will always be people who, due to personal preference or disposition don't want a relationship and yet are willing to pay for certain of the perks thereof.

• Couriers, not to deliver online shopping to your door but those who are trusted to specialise in transferring sensitive information between parties will still have a place.

• Process servers, court clerks, judges, and even lawyers may still have a niche because people demand it, that will depend on public opinion more than the other items on the list.

• Which brings us to nostalgists, and the grey market, there are goods that, while not illegal, are not readily available. Some of these are not longer in production, antiques and the like. Others are simply items with a market so niche that they are not commercially manufactured or sold, the realm of made-to-order spare parts etc... created by artisans.

Answer 5

It would not need to exist, the same way it does not need to exist now.

The original purpose of money is to give food to people who are not involved in food production, but instead perform some specialist function.

Initially, that was soldiers -- soldiers paid farmers with special coins, and later came back to collect a certain amount of these coins as taxes, so essentially that was just a protection racket.

Later, administrators were added as specialists who'd take over most of the work of collecting taxes, and much later, more complex state-building built on top of this.

The actual problem it solves isn't local exchange (that worked fine before), but transfer of value over large distances and between people who have no trust relationship, which is something early state-building projects needed.

Money ceases being useful as soon as you arrange supply chains around trust relationships, because money is a substitute for trust and cooperation.

Small societies today do this, and operate fine without money (which would be a significant administrative overhead), and a future society that no longer needs to organize supply chains over trust boundaries would probably reevaluate whether the effort is worth it.

Answer 6

My answer is very similar to this, but I have a different spin on it.

Using money to purchase goods creates a distributed system of prioritization.

Not everything can be "infinite", e.g. time, space and matter are finite. Even if you can transform matter by fusion or something (like from steel to gold), there is a finite amount of matter. Space is a good example too, where do you put all these factories? The further you put them from people, the more they have to wait for the goods to be transported. Which goods should be made closer to the people, so it takes less time for the people to receive them?

Demand should prioritize what the finite resources are used for and money "measures" demand. If you are willing to pay more for something then there is a greater demand, hence it's more important.

Money answers questions like "What should we make from our finite amount of steel?". (Even if the process of making is automated)

Answer 7

Robots know what to make from blueprints but someone must provide them with blueprints. Basic one can be free, but with copyright protection you can buy more exquisite designs or even completely custom ones designed not by a machine, but by a human.

Basically everyone gets UBI which is enough to survive (eat healthy, sleep, consume some culture), but to get more money they need to create something. There is no menial labor, some people focus on physical strength (Olympics), some people on culture (theater, movies, writing, computer games), some people are handcrafting unique non-replicable items. There are ZOO's or natural reservations, all with limited capacity for people.

You can survive without doing anything, but you can also focus on what you want to do to thrive in a new world. And money still plays big role in it.

Answer 8

Why wouldn't there be? The robots/nanobots might be ubiquitous, but they're still finite. Any given one can only be doing one thing at a time. Making things still requires materials. Making things work still requires energy. Neither are in unlimited supply, and nothing about AI or automation implies that they will be. In fact, in many ways, you can expect them to be scarcer than ever before, as the number of ways to utilize them explodes — you can theoretically make anything, but can you afford to? You will never have "post-scarcity" at anything short of a Dyson Sphere technology level, and probably not even then. As you increase the scope of things that people can do, they will always manage to invent luxuries that are out of reach of the majority, even as the average standard of living improves to a level that would have been considered luxury a few generations earlier.

Answer 9

Humans are competitive. Most of us want to be better than our neighbour. Not everybody are like that, of course, but as long as at least two people both want to be better than the other, the race will be on.

We need some way to see and to show that we are the best.

Money can be either a direct way to show that, or a way to get whatever status symbol is in fashion.

We have no way of knowing if that competitiveness is an necessary part of being human, or if we will grow out of it. A third option is that we stay competitive, but direct it towards areas which doesn't cost scarce resources., e.g. being the best at quiz shows.

Answer 10

Money isn't a "means of exchange" in the sense that you mean. And besides, are you talking about cash itself, which has largely ceased to exist in the year 2022? For that matter, most paper instruments have nearly become extinct. When's the last time someone wrote a check in front of you in line for the cashier?

So I'm guessing you probably mean the electronic money that just exists as a balance in your bank account. Why does that need to exist?

In our world it needs to exist because most goods (and even services) are scarce. There is only so much of it to go around, but many want those things. Money just happens to be the invention that keeps us from having to do 19 barters before we can get ahold of the good/service that we want for ourselves. Economists call it "fungible" meaning that it is equally exchangeable for anything at all, unlike a barrel of salted fish, or 3 tons of mid-grade iron ore. People also want those things too, but only some people, because anyone else would have trouble exchanging those for things they do want.

In a post-scarcity society like the one you hint at, why would money be needed? There is more than enough for everyone to have everything that they want. Or so you suspect. But what if that isn't the case?

What if what we want changes every time the amount of things change? What if you only want one/two/three cars when you have to ride the bus, but as soon as everyone has three cars (and the garage to store those in), you find you want seven, or ten? You'd have trouble believing that to be the case now, it seems excessive. But you'd be mistaken if you didn't believe it.

Even in realms where scarcity should be conquered absolutely, humans have a burning desire to recreate it artificially. Let me tell you about this virtual place called a "tracker". It allows people to download content of nearly any type without the restrictions imposed by copyright holders. Movies, television, books, heck, even crochet patterns. You name it, you can find it. Furthermore, these trackers use a technology called bittorrent. Bitorrent is rather strange in that unlike other networking software, the more people who use it, the faster it goes. So, you'd think that these trackers would want as many members as possible, wouldn't you? If there are 1000 members instead of 50 members, downloads go faster. And not just speed, there are other advantages besides (each member acts like a sort of backup, so more members means a more robust system).

So, these people who have conquered scarcity today in a way that the rest of the world only dreams of, they are out there trying their best to sign everyone up aren't they? Giving away memberships, evangelizing (at least to those people who have no moral qualms about copyright infringement)?

Hell no. Their human instincts take over, and they restrict membership. They cap it at some maximum number, and create all sorts of hoops to jump through even if they haven't reached the maximum. They create rules that are designed purely to kick people out, so that their numbers are low.

Because, how can you be cool if everyone gets to be there?

At least in regards to human psychology, scarcity was always the point. You (or I, or anyone, I'm not picking on you, dear reader) might be willing to have less, if it means someone else has even less than that.

So nanobots and automation and robotic factories can't ever change that. And if somehow we collectively heal whatever is wrong with us that makes us like this, we still have no idea how much our material desires will grow such that even "plenty" turns out to be "not enough". Should nanobots ever be invented, bread will be copyrighted the next day in an overnight session of Congress.

Answer 11

Because you dont have that many Nano-forges and a day only lasts 24hrs

As in Forever War series by Joe Haldeman, humanity has access to nano-forges, but making goods takes time and there are so many hours in a day.

You actually pay for the privilege to use one of them. If they can make pretty much anything why wouldn't they be booked full making army vehicles, or stuff for the government?

And if I remember correctly the more time an item demands from the nano-forges the more expensive it is. Doesnt matter if you want a diamond or a car, the one that takes more time is the more expensive one.

Answer 12

It Doesn’t Need to be Too Much Like Money

As economists have observed for decades: if charging money to provide goods and services is such a perfect system that solves all problems, why don’t corporations do it internally? Why don’t the different departments charge each other for their services, or outsource everything? Apparently, the free market has determined that firms running on a command economy are superior to firms that run on the free market!

But there are still several reasons you might want something like money.

Allocating Resources

Various countries have experimented with using primitive “cybernetics” to make a command economy work. As Francis Spufford wrote in Red Plenty, one of the problems this ran into in the Soviet Union—beyond the fact that id didn’t have nearly enough computing power in the middle of the twentieth century for it to work—is that the equations kept saying that the optimal way to run the economy looked more like capitalism than they were willing to accept.

One of the most prominent examples was, the equations involved a vector, labeled “shadow prices,” because they functioned essentially the same way as prices under capitalism.

In general, there’s going to be some limiting factor on how much you can produce of each good. If you’re a doctrinaire Marxist, like the ones in the Soviet Union and a few I’ve met after it fell, you might feel compelled to insist that this must be labor. Since there’s no reason to be a doctrinaire Marxist, though, it can be lots of things: energy, the ability of the atmosphere to absorb greenhouse gases without destroying the climate, the number of atoms in the solar system.

In effect, how much of these limiting factors you are willing to allocate to each given purpose is a kind of price. Trying to fit the cost of an electric car, a hybrid or a gas-guzzler into your carbon budget is a lot like putting a price on carbon and making the carbon budget part of the money budget.

Preferences

Humans like to feel in control. Their revealed preference is to play a lottery that lets them pick their lucky numbers instead of one that just tells them if they won, for example, even though it makes no difference to the odds. So, while the AIs probably shouldn’t take this too far and hand out hydrogen bombs to anyone who wants them, there are definitely lots of examples where everybody would be happier picking out the things they want than having the algorithm always choose for them. Even if the algorithm knows them better than they know themselves, they’d get some psychic value just out of having the power to choose.

If everybody’s happiness is considered equal in value, this would work a lot like ration cards: everybody starts out entitled to a certain amount of the world’s energy, a certain amount of its platinum, a certain amount of its food, and so on, and can choose how to spend their share. But then some people would want to use more energy and no meat, so you’d want to allow them to trade. And then, the ratio of the trade value of any two goods would be the same, as demonimated in any other good, or else there would be arbitrage that made the discrepancy vanish. So, as soon as you allow trading, you’ve brought back money. Every MMORPG ever made has found this out, as players have decided on some in-game commodity, often one that’s harder to mine than in-game “gold” or “credits,” as its de facto currency. This system would be no different: whatever’s most convenient as the medium of exchange or the store of value will function exactly like money, and there will be markets where you can trade some of your unneeded food allocation for someone else's excess electricity.

Incentives

People aren’t motivated only by money, but probably no system can depend entirely on moral appeals for people to work harder, either. You might want to encourage them to install more solar panels and trade the excess energy by offering to trade something for it, and it would be something they can trade for whatever they want, so you’ve created money.

Eventually, the AIs might get so much better at humans at everything that it’s no longer important whether humans do anything productive or not. (Indeed, there’s really nothing humans are needed to do any more.) In that case, though, the AIs would still need to allocate and trade resources between themselves. And this would involve creating something a lot like money.

Answer 13

Things that cannot be accomplished by brute application of resources.

There's been some lack of clarity about what Post Scarcity implies.
Post Scarcity is not merely a "All needs are provided for" scenario.

It's not Universal Basic Income, or the abolishment of money per-say.

Post Scarcity means exactly what it says on the tin.
No more scarcity of resources.

If I want my house gold-plated, there's enough gold and robot-workers to get the job done for me and anyone else who feels tacky enough to do it.

If I want a yacht, a robot-factory can churn out a boat to my specifications in a day or so and even crew it for me and it'll impact nobody.

If there's not enough robots to get my dream sports-stadium built, the robots can make more robots.

There are probably reasonable limits.
I can't expect the robots to move moons for me, but they might be able to move mountains.

The premise of a Post-Scarcity society is that the per-person resource/energy budget of society has exceeded pretty much any possible want or need any of its citizens might have.

Anyone talking about "ration-cards" or "Government Stipends" has not understood the premise.
Such things are not needed because energy is "too cheap to meter" and raw materials and manual-labor are similarly so cheap as to be trivial.

However

There are problems that cannot be solved by application of more resources or manpower.

For example, if I want The Mona Lisa in my bedroom, there's only the one painting, and other people might want it as much as I do, (for example the Louvre might object.)

I can have a Mona Lisa. A perfect replicated copy down to the last atom, created by nano-factories from detailed tunneling-electron-microscope scans of the original.
But it's not the original. The original is still hanging in the Louvre and no matter how perfect the replica it's still not the real thing.

Hence: Money.

Money in a post-scarcity society is no longer required to get by. There may be people who are born, live and die without ever needing it. Money would essentially be a novelty to most people because very few people want the sorts of products it would buy.

I would expect money to be heavily used for illegal or under-the-table things that the AI-controlled society doesn't allow, not dissimilar to Bitcoin in this respect.

Far more likely to develop is an intricate network of favors and promises owed between friends.

I would expect money's power as a lever to get people to do things to evaporate for the most part. People don't need money, so being offered large amounts of it really doesn't mean much if you don't have something you want to spend it on.

As Picard said. "Money is no longer the driving force in our lives"

People would necessarily do "work" only because it pleased them to do it.

I've had quite a few conversations with friends where we talked about what we'd do if we won the lottery, and one idea that comes up a lot is that we would probably find some sort of part-time job just to keep ourselves engaged and busy in our lives.
Many people find meaning in the things they do.
I might open a restaurant, or operate scarcity-age vineyard as a hobby. Not for money, just because it provides me satisfaction to do it.

I might operate the restaurant as a scarcity-era format, with money required. Or I might simply make the food and serve it up to guests. Enjoying the giving of hospitality to strangers and friends alike.
I certainly don't need to worry about the running costs or expenses!

Answer 14

As far as I can tell, economics is, at its most fundamental, a way of allocating resources to encourage more/better resource production. The means of getting money should align well with doing what society most needs. I.e. you're developing a good incentive system.

You need to decide what "resource" people still produce.

Maybe the machines are decidedly uncreative and you want to incentivize art. Maybe there is still a lot of social value in athleticism, and you want to incentivize competitive sports. By a similar token, you might financially reward competitors and winners in creative writing, poetry, and math competitions to name a few. Likely, the things that interest people will be those that remind them people still can accomplish things in a world run by machines.

We were once on the "gold standard," which meant that every denomination of currency could be tied back to an amount of gold equivalent. You are on the "human potential" standard. Every dollar you earn represents how much you've reminded the world, or even just your local community, of what a human being can accomplish.

In all likelihood, this world would have a very large social safety net. Maybe a UBI, some sort of free housing for those who can't afford better, etcetera. The economy would no longer be there to fulfill basic needs. Rather, it would be a way to incentivize giving meaning to people's lives and reward those who do with prestige and luxuries.

Answer 15

Such society has already existed (albeit not for everyone).

A class of people, getting served, dressed, and fed without having to work, not really having much to do, and ultimately ruled by a power above them that they cannot question.

That sounds a lot like aristocracy in the French Old Regime, up until the Revolution.

The amount of stuff they get depends on how much land they control (in your case, how many robots they own), which can change by treason, mariage, gambling, war, death, exchange, natural catastrophes, ruling from the being above them...

Very few people of that class do any actual work.

Money is still a way to quantify how much they own and is a mean to exchange those.