Does money have a future?
While most people are seeking to predict the future of money, some predict a future where community-based trust and online rating reputation systems might enable us to get rid of money — at least as we know it.
Last week London was buzzing with discussion of financial innovation, from the Wired conference on Money, the Bitcoin conference, other organized panels on alternative currencies organized by more mainstream parties.
However, while most people were busy thinking about the “future of money,” one surprising conclusion was suggested by a visiting Australian. Perhaps money — as we know it — is passing away, suggested Rachel Botsman of collaborative consumption fame. The alternative, “reputation currency,” suggests that we could be on the verge of non-monetary knowledge and value transfer that could surpass the value of money itself.
Critiques of the so-called “dark side” of the collaborative economy suggest that this need may be increasing rapidly. As most following the subject know, successful collaborative startups often struggle when they move out of their initial enthusiastic user base to a more mainstream audience. As possibility of people gaming the system increases, the human-driven element of the “experience” often decreases. Moreover, as others have now proven, people become less interesting the more they think about money.
Trust: easy to lose, difficult to gain
The primary way of evaluating, user reviews, has already been shown to not scale well. For example, I recently found that the owner of a flat I booked on AirBnB in London was in Russia and unable to let me in. She threatened not to return the money if I left her a bad review. So I got my money back, and she retains a perfect rating on the marketplace. As I lost an afternoon waiting for a no-show host, AirBnb may have lost a customer.
Gaming reviews, either by fake reviews or threatening guests with a return bad review, of course means that services lose the trust they’ve worked hard to gain. In my own case, a $50 credit offered by AirBnB cannot purchase back trust lost after I spent several hours waiting for a host to let me in or the added hassle of finding an alternative lodging at the last minute.
Trust, as this example illustrates, is easy to lose but difficult to gain. What works in the context of an enclosed community often no longer exists once you open the doors to people who are attempting to take advantage of the system for personal profit. In many ways, what we observe in a “success story” like AirBnb is a small scale mirror of what we see across the finance industry. No one trusts their bankers, they simply have no alternative.
Towards a “primitive” paradigm?
Another helpful example comes from the work of David Graeber, a theorist who has utilized the insights of anthropology to critique standard economic paradigms. People, as it turns out, don’t care about barter or money. They prefer to deal with each other without money. The “primitive” way is to give naturally out of excess, to receive naturally when there is need.
In a world that has embraced “paleo” diets, yoga, and other ancient practices derived from pre-agricultural society, perhaps we also need to go back to a more “primitive” mode with money. To use a parallel from organic food, instead of removing weird chemicals inserted into modern food products, perhaps we simply return to that mode of life before people decided to insert chemicals into their vegetables. Back to the basics of life.
Building global community
Scaling trust is ultimately about scaling community. It is connecting people with common values without allowing pollutants into the system. Not forcing growth by clever marketing campaigns, but allowing things to organically grow as people perceive real value, including the value of human encounter.
What seems like an incredible challenge is made much easier with evolving social technology. Through online magazines like Salon, Huffington Post, Shareable.net and OuiShare, millions of people are realizing that the economics they were force-fed is not really a science. Like-minded community builders can connect across continents.
And, in the midst of bankers and investors looking for another quick buck from the “future of money,” we can create something better than money. We can create communities.