Machine Money vs. Human Money
"In a recent conversation, Paul Buchheit, creator of Gmail and now a partner at Y Combinator, said something really provocative: “There may need to be two kinds of money: machine money, and human money. Machine Money is what you use to buy things that are produced by machines. These things are always getting cheaper. Human Money is what you use to buy things that only humans can produce.” Paul continued: “The key thing that humans offer that machines do not is ‘authenticity’. You could buy a machine made table from Amazon for cheap, or a hand crafted table from a person for much more (and for real authenticity, we want it to come from a local artisan, not an anonymous factory worker on the other side of the world). In the long term, the price of the former (in machine money) should trend towards zero, but the latter will always cost about the same in human money (some quantity roughly proportional to the number of hours required to make it).” (https://medium.com/the-wtf-economy/machine-money-and-people-money-29b497eeb9d0#.5q2ptwbyn)
"I love Paul’s distinction between two types of money, but I do wonder whether it’s complete. His notion of Human Money encompasses two very different classes of goods and services: those that involve a true human touch — parenting, teaching, caregiving of all kinds — and those that involve creativity.
Perhaps “Human Money” needs to be further subdivided into “Caring Money” and “Creativity Money.”
Caring is a necessity of life, just as is food and shelter, and should not be denied to anyone in a just society. In an ideal world, caring is a natural outgrowth of family and community, as we care for those we love, but there is also a caring economy of professionals, including teachers, doctors, nurses, eldercare assistants, babysitters, hairdressers, and masseusses. And in a society with an inverted demographic pyramid, in which there are far more of the elderly than young people to support them, as we will see in many developed countries in by 2050, machines may help to fill this gap.
Creativity Money is what we pay for the good things of life beyond the basics. The latest LeBron James basketball shoe. Adele’s “Hello.” The glass of wine with friends. The night out at the movies. The beautiful dress and the sharp suit. Sports, music, art, storytelling, and poetry.
It is a mistake to think that “the creative economy” is limited to entertainment and the arts. People at all levels of society pay a premium over the base cost of goods as a way of expressing and experiencing beauty, status, belonging, and identity. Creativity Money is what someone pays for the difference between a Mercedes C-Class and a Ford Taurus, for a meal at The French Laundry rather than the local French bistro, or at that same bistro rather than at a McDonald’s. It is why those who can afford it pay $5 for an individually crafted cappuccino rather than drinking Folgers instant coffee from a 5-pound can, as our parents did. It is why we pay huge prices or wait years to see Hamilton, while tickets for the local dinner theater are available right now.
Creativity Money is the focus of a competition as intense as any that characterizes the Machine Money economy. It is already at the heart of huge swaths of our economy: industries like fashion, real estate, luxury goods, all depend on the competition among people who are already rich to own more, to enjoy or sometimes just to show off their wealth.
In the late 18th century, in his short novel Rasselas, Samuel Johnson wrote: “But for the Pyramids, no reason has ever been given adequate to the cost and labour of the work. The narrowness of the chambers proves that it could afford no retreat from enemies, and treasures might have been reposited at far less expense with equal security. It seems to have been erected only in compliance with that hunger of imagination which preys incessantly upon life, and must be always appeased by some employment. Those who have already all that they can enjoy must enlarge their desires. He that has built for use till use is supplied must begin to build for vanity, and extend his plan to the utmost power of human performance that he may not be soon reduced to form another wish.”
That is, even in a world where every need is met, there will still be “a world full of wants.” Keynes wrote of this kind of competition too in “Economic Possibilities for Our Grandchildren”:
“Now it is true that the needs of human beings may seem to be insatiable. But they fall into two classes — those needs which are absolute in the sense that we feel them whatever the situation of our fellow human beings may be, and those which are relative in the sense that we feel them only if their satisfaction lifts us above, makes us feel superior to, our fellows. Needs of the second class, those which satisfy the desire for superiority, may indeed be insatiable; for the higher the general level, the higher still are they. But this is not so true of the absolute needs — a point may soon be reached, much sooner perhaps than we are all of us aware of, when these needs are satisfied in the sense that we prefer to devote our further energies to non-economic purposes.”
Given an income sufficient to the necessities of life, some people will choose to step off the wheel — to spend more time with family and friends, in creative pursuits, or whatever they damn well please. But even in a world where the machines do most of the essential work, the competition for additional Creativity Money will drive the economy.
Keynes foresaw both of these possibilities. He wrote:
“The strenuous purposeful money-makers may carry all of us along with them into the lap of economic abundance. But it will be those peoples, who can keep alive, and cultivate into a fuller perfection, the art of life itself and do not sell themselves for the means of life, who will be able to enjoy the abundance when it comes.”
And this is the interesting bit. Creativity can be the focus of an intense competition for status, so that “he who has built for use till use is supplied must begin to build for vanity.” But it can also be the key to a future human economy that would let all enjoy the fruits of leisure that are brought to us by machine productivity.
The good life consists in enjoying the creativity of others, and in sharing our own, not just in having our basic needs met. Much of this, like caring, is a natural outgrowth of a successful human society, not an economic pursuit. Creativity, and the patronage of creativity, may be a major component of the future economy." (https://medium.com/the-wtf-economy/machine-money-and-people-money-29b497eeb9d0#.5q2ptwbyn)