Saturday, March 24, 2018

Influence, the Currency of the Next Economy?
Joe El Rady

With the advent of social media, influence (fame/prestige) has gained importance in many people’s lives—important enough to be monetized (high YouTube followings attract big advertising dollars, high numbers of Twitter followers lead to product placement fees) and even used as its own currency by others (Instagram influencers are invited to exclusive parties etc.).

The importance of influence as at least monetizable if not outright currency will only continue to grow as automation takes over the economy. Economists today study a society that operates due to and under the influence of scarcity. Indeed, scarcity is the founding principle of our economic system. But how might society function without scarcity. A society without scarcity has solved the problem of labor—people no longer need to work to sustain themselves because machines complement work, allowing humans to escape the most dreadful effects of scarcity (poverty, hunger, etc.). In a world where robots do most of the work and replication machines (3D Printers, for example) create many of the goods, the marginal cost of production falls to almost zero, making anything affordable to anyone who works even a few hours per week (or even not at all).

In such a world, no one works to increase wealth; people will only work to increase their reputation, their prestige (their place in the world) and, as such, their ability to influence. Rather than working in order to hoard capital, engage in conspicuous consumption, or obtain the necessities in life, people work to increase their reputational capital. Social media has already provided a hint at what that world would resemble. From Instagram to Vine to Twitter, users expend large amounts of time and energy simply to gain a certain amount of reputation. Clearly, the Internet has begun to demonstrate how much people will work, for no money, just for reputation.

Regardless, of whether scarcity, and therefore money, exists in the future, the monetization of influence and the use of reputation and prestige as currency will. In a capitalistic world with a market economy, influence and reputation can be monetized for FIAT or used as an alternate currency. This alternate currency can exist on the Blockchain, denominated by crypto tokens and coins. In a post-scarcity, post-capitalism, post-money world, reputation serves as the very purpose of work. Furthermore, even in a post-money world, some items will remain scarce (such as rooms at a resort in Fiji). Gaining entry to such difficult to schedule locations will require good reputation, and potentially fame. Therefore, such a future requires an element of connections and building good relations—the foundations of which many have started to build on and through social media.