The End of Cash and the Future of Exchange

The end of cash seems to be on the horizon these days. With innovations like Google wallet being incorporated into our cell phones, it seems likely that children born in the not too distant future may never touch paper money. In the future you’ll never need to carry a wallet. It already feels like wireless payment technology has been embedded in our credit cards for a long time. We simply tap away, 1’s and 0’s fly through the air, and somehow we get to take stuff home.

While dealing with paper money may already be on its way to becoming a thing of the past, the more important change may be somewhat more subtle. Today when we pay for something in meatspace, we are almost always looking into the eyes of the person we are exchanging with. But as our payment systems go electronic, it seems the direct exchange of money between people will become less and less common.

The loss of the personal nature of monetary exchange will have deep implications for every aspect of our society. On a personal level, how will we think about money if we are so disconnected from it? Will we be dangerously nonchalant about price in such a world? What would be the economic implications if we are less concerned with price for our goods? I would argue that just how cheap some goods are already works against us in some ways, driving us to disconnect from the true value of things.

Our growing electronic paper trail will also give companies more information about our buying and spending habits. This may also lead to new business models moving into new areas of the economy; for instance, we might see service contracts and bundling in surprising places in the future.

Imagine a simple grocery trip in the year 2025.

You just bought a brand new fridge with built-in RFID tracking so it knows precisely what items it has in it. With built-in weight sensors, it also knows exactly how much milk and sour cream you have left, and when they expire. Your fridge has already planned out possible meal ideas for the next week or two based on your calendar, cooking skill, and food preferences.

Your fridge could also potentially connect to your health records and monitoring devices so it could take into account your dietary needs as it plans your meals… but that was an expensive upgrade so you didn’t opt for it. Either way, it’s a top of the line Walmart brand fridge, and you got such a great deal – the only downside is that you’ll need to shop at Walmart to take advantage of its connective features – at least until your contract is up.

Oh well, the Google-mart is too far of a drive anyways, and you still can’t get comfortable with how your groceries come to you.

So as you wheel your cart into Walmart, the screen on the cart awakens. It asks you about what you might like to eat this week, if you are thinking of having company, and lets you know about the specials this week. The cart already has all of the data that your fridge had, so it gives you a nice list of the things you need to get. As you load the items into the cart RFID tags register the item so the store knows precisely what items you have in your cart. For fresh produce, the cart weighs the items as you add them.

Your monthly contract price might already include unlimited* groceries? (*Unlimited grocery plans are subject to certain restrictions and limitations outlined in the service contract). They know that you are locked into a contract, they know what is on your list, they know whether you have good credit, they probably even know your salary. So you march along merrily filling your cart, and adding whatever items you desire along the way. Maybe you pay a little more per month then you would using the old school shopping model, but the simplicity of a single bill has advantages for both you and the grocery store you are dealing with.

When you’ve finished with your shopping, you just walk out of the store; paying your monthly contract bill is all that you need ever worry about. Even if you are not on contract, the store simply connects directly to your credit card and subtracts your total as you walk out of the store.  You never have to look at a dollar sign throughout your whole journey.

And thats it, as easy as buying a gadget over the internet seems today, so could all purchases be in the future. Similarly, you could imagine a restaurant where the server takes your order and a digital assistant in her hand or pocket digitizes the order. Instantly, the restaurant has a tally for you sent to your cellphone, and when you are finished your meal you simply walk away – perhaps assigning a tip if necessary using your phone.

This is obviously only one version of a possible future. An alternative future might use the digitization of money to make it easier for us to better track our spending. But in a world that seems always busier, I think we would jump at the simplicity offered by such a system I described. In the end, our spending choices will shape what the future looks like, even if it means we choose to remove ourselves from our day to day spending choices.

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Maybe We Should Just Relax

“So what is it that you do?”

This timeless cocktail party question is all too often the first thing out of my mouth when I meet someone. What a loaded grenade to lob casually at someone you have never met? Its a question full of cultural expectation. We might as well say, “So, what is your status in society?” or “How do you contribute to society?”. We still seem to think that people must have a neat little productive place in society if they are to realize their potential as a human being.

In a world where we are way richer then we have ever been, why is productive work still so highly valued? In a 1932 essay, looking at the economic depression around him, Bertrand Russell reflected on just this question:

From the beginning of civilisation until the Industrial Revolution, a man could, as a rule, produce by hard work little more than was required for the subsistence of himself and his family… A system which lasted so long and ended so recently has naturally left a profound impress upon men’s thoughts and opinions

Clearly, there is some deep sociological programming behind this. Since we started coming together into tribes, we have needed to make sure that everyone was doing their share. The most successful groups would be those that could harness their collective work and if possible even produce some surpluses. Over time, the most successful societies evolved a strong belief in the virtue of work.

Passages from many holy texts underline the connection between belief and work. The Bible says “Slaves, in all things obey those who are your masters on earth… do your work heartily, as for the Lord rather than for men” Colossians 3:22-24. Similarly, the Quran equates idleness with a disconnection from the world and from god.

The need to keep the people busy and productive was an absolute necessity for the rudimentary economies of the past, but in the world of today is there really any need to maintain such a preoccupation with occupation? I would propose that in fact, many problems apparent in our society could at least partially ascribed to a pathological need to keep working as hard and as much as possible.

Even in 1932, Russell could clearly see that the inflexible work day might lead to problems as technology displaced jobs:

Let us take an illustration. Suppose that, at a given moment, a certain number of people are engaged in the manufacture of pins. They make as many pins as the world needs, working (say) eight hours a day. Someone makes an invention by which the same number of men can make twice as many pins: pins are already so cheap that hardly any more will be bought at a lower price. In a sensible world, everybody concerned in the manufacturing of pins would take to working four hours instead of eight, and everything else would go on as before. But in the actual world this would be thought demoralising. The men still work eight hours, there are too many pins, some employers go bankrupt, and half the men previously concerned in making pins are thrown out of work. There is, in the end, just as much leisure as on the other plan, but half the men are totally idle while half are still overworked.

Does that sound eerily familiar to anyone else or is it just me? Imagine if you want, a slightly different scenario, and the pin company is a well oiled machine with a crack team of pin management. The pin managers, well aware of the constant demand for pins, maintain their production level and rather lay off half of their workers. At the same time they take the money they were paying those workers and increase their own salaries. A savy business move, and one that I would be unsurprised to read about from any modern company.

Now at this point I realize that this post is in danger of running off on a socialist tangent, but that is not the point I am driving at here. I don’t mean to suggest that the efficient pin managers should receive no gain, nor that all the pin makers should seamlessly transition to working only half the time. Rather, I simply question whether the outcome of such a scenario might be improved if the collective expectations of work were not quite so high.

Perhaps we all could benefit if we just relax a little bit more? This is not to say that the need to work is completely behind us, rather maybe we don’t need to neurotically worry about working quite so hard when we are living in the magical world of the future.

Yes, we are already living in the future.

Reading the news about national debts, economic downturns, and job rates – you would think that we are on the verge of not even being able to feed ourselves. Don’t be fooled, we are richer then we ever have been, I can’t stress this enough. Next time someone tells you about the economic downturn and the need for austerity, keep in mind that there has been a massive increase in production, per-worker productivity, and total wealth over the last 30 years. Where has all this wealth gone?

Some might suggest we should blame the rich for sucking up all the profit, but maybe it also has something to do with our mentality about work. Maybe, because we are so attached to cultural norms, we have collectively chosen to reinvest our gross productivity into getting even more work done, much to the delight of the capitalist classes who reap the benefit.

Maybe we should just relax.

Our devotion to the work ethic is what loads questions “So, what do you do?” with unnecessary expectation, or leads us to disregard our time in education as not the “real world“. Yes, we should all try to figure out what it is that we can do to contribute to our community, but do we really need this neurotic fixation with profit and productivity? Maybe we should just turn down the knob marked “work ethic” a notch or two. Does anyone really think that it is laziness that is going to take us down as a society?

Even if we disregarding the impact that working too hard might have in terms of reducing the number of jobs available to the cost of encouraging innovation in the work force, there is also the problem of our energies might be channelled into downright destructive pursuits. In some respect, we seem to be a manic society, neurotically obsessed with getting things done while not really considering what the consequences of our work are.

In my last post, I talked about the likelihood that menial jobs in the labour and service industries are rapidly becoming automated. A world where goods keep going up but the amount of human work necessary keeps dropping is not that of tomorrow, but that of today. Does it not seem particularly sick to keep such an absurdly high pressure for people to work in this type of world.

But what would be the benefits of relaxing our expectation for people to work? If we didn’t feel such a strong  compulsion to work hard, would we perhaps hold out a bit longer for more favourable job offers? Would we demand better social benefits? Would we spend longer in school, and pursuing our true interests? Would we lead happier lives? Would we perhaps reconsider what it is that we are channelling our work towards? Now, I don’t suggest we stop teaching our children the value of hard work, but maybe we should stop expecting them to become wage-earners as soon as humanly possible.

Perhaps in the future when someone asks you “So, what do you do?” they will expect response about how you spend your leisure time in interesting ways, instead of what sort of drudgery you do to make money? Come to think of it, maybe this change is already happening. Ultimately its up to each of us as individuals to reassess our relationship with work; collectively, these individual views add up to our cultural beliefs.  When a cultural belief shifts, it becomes a lever which can move the world.

Lever

We Are Not Programmed for Abundance

We Are Not Programmed for Abundance

So the topic of the robotification of society seems to be a popular one these days. Eminent economist Paul Krugman, has just written a short post highlighting the connection between the increase in robots use for product assembly and a recent trend of ‘reshoring’ manufacturing domestically. ‘The robot revolution will bring jobs back to America’ exclaim the optimists. But how many jobs are really needed in a robot world?

Essentially the argument goes like this: If you can manufacture goods using very little human labour through automating your assembly with robots, there is little incentive to offshore labour. Rather, you can locate your robot factory closer to your target market, and with access to highly trained workers necessary to support such a factory.

The argument is persuasive, although it should be noted that America is not the only place investing in robots. A robot-race between manufacturing nations seems likely on the horizon. Regardless of where the goods actually end up being produced, the eventual replacement of a great number of jobs by robots seems almost a foregone conclusion at this point.

This conversion of the economy from one of human powered labour to a highly mechanized one is a recurring story in the economy. As one commenter on Krugman’s post pointed out; agriculture went through a similar change, and now a very small proportion of the population actually works in the industry which grows more food than we can eat. This has all happened before, and it will all happen again.

Modern economic dogma states that incorporating technology into business should simply lead to better (and more) jobs. Google the Luddite Fallacy if you want to know what I mean. While I am sure this has held true in the past, I am equally sure that it cannot hold out forever.

This video of the new robots employed at the Zappos.com warehouse really drove the point home for me this week. In this case, every shelf in the warehouse can be moved around by a small army of motorized robots, which will deliver the appropriate goods in the appropriate order to be packed for shipment to customers. All of a sudden, workers simply grab the item from the shelf, scan it and put it in a box. By the time you do this, the next item for the order is already waiting to be grabbed, no walking needed. And the robots will reorganize the warehouse in real time to keep high demand goods close to the packers, and lower demand ones further away!

The virtues of such a system are many, including radically higher output per worker, near 100% accuracy in filling orders, much lower energy consumption, much lower ‘shrinkage’ (business speak for goods stolen by employees) etc…  It seems the logical next step would be to remove even more employees from the warehouse, perhaps replacing them with adaptable robots like Baxters.

But all this leads me to conclude that in the near future, the number of people working in warehouses such as this one is going to be much smaller. If we take google’s driverless car technology and add it on to this, we are suddenly talking about delivering goods from manufacture to doorstep with a vanishingly small amount of actual human labour necessary.

Now, again the argument is that these menial labour jobs will be replaced eventually, but this will lead only to a rise in service jobs. While the robots that would replace workers in a service industry (such as a call centre) might not look quite as cool, these jobs are far from impervious to the steamroller that is automation.

We already rub up against robot secretaries when we call anywhere (ie Please press 1 if you are an existing customer). These systems may seem rudimentary and often frustrating, but they are a sign of things to come. Imagine, a computer much like IBM’s Watson, hooked up to the policy archive of whatever company you are calling, say your bank. This system would be able to accurately answer any questions, and take any requested actions on your account.

Such a system may not be able to handle 100% of calls, but I am sure they can do 95% of average customer requests and figure out when to bump them out to an actual person. As anyone who has dealt with the geniuses that are employed at average call centres knows: humans have a pretty dismal record at helping customers anyway  As text to speech continues to improve, soon enough we will really have no idea if we are talking to a human or a computer when we call a company.

So it seems that both menial labour and menial service jobs are scheduled for the axe. But what does this mean for the overall economy?

While the byzantine network of markets and capital boggle even the finest minds, on some level our current model has evolved as a means to distribute scarce resources as efficiently as possible. It is not clear how the capitalist system as it exists today will function in a world where most people don’t have to work. Just in the same way that our biological programming does not deal well with an abundance of food, perhaps our societal programming won’t be able to deal with an abundance of material goods.

Put simply, the problem is this: Maybe we’re just not programmed for abundance.

Perhaps the ever widening gap between rich an poor we see today is a pathology of a system which produces more goods with less labour every year. It seems many of the current economic woes might (at least partially) trace to this type of effect. If this is true, then the symptoms of increasing unemployed or underemployed will only continue in the future. Will this continue? As Andrew McAfee put it at TEDx: “We ain’t seen nothing yet”.

How can our economy really adapt to serve society at large when it is going to take so few people to keep it running? Is it fair to maintain such intense cultural and economic pressure to work, in a world that has too many goods and not enough work?

Figuring out how to live in a world where we have more then we need and we don’t have enough work to go around is going to require revolutionary change on every level: culturally, economically, environmentally, sociologically. It is time to start figuring out how we can reprogram ourselves and our society to deal fairly and sustainably with a world of abundance. The answers of how this can be done may not yet exist, but it is definitely time is start asking the questions.