Do todays telecommunication capabilities enable more efficient economic models?

State: completed by Gionata Genazzi

Money is a central tool of all modern societies. By serving as a transitive exchange medium, it provides a common denominator that a society can evolve around. The effortless trade of material goods and human labor allows for highly specialized professions yielding ever increasing productivity and technological progress.  As money is a universal good that can be traded in for physical goods or services it is the easiest way to compensate for labour. A common assumption is that humans need such motivation in order to work. This is certainly true for repetitive and mindless tasks. However, for creative and interesting tasks, i.e., tasks providing a high intrinsic motivation, money is rather impedimental [1,2]. When adding the fact, that technological progress, in particular automation, will likely lead to the extinction of repetitive and mindless jobs, one may ask the question, whether money is still needed as a motivator. Not to mention, that the overall economic model based on trading in labour for money is threatened by technological unemployment [3].

However, as argued frequently, money is also required to align demand and supply and therefore efficiently allocate goods. Looking at the ever growing inequality, be it on a national or global level [4,5], one may conclude that money does not perform too well to allocate goods efficiently or to align wealth.

The argument that a monetary economy ensures efficiency might be true when efficiency is measured financially and only individual stakeholders (e.g., companies and governments) are considered, but on a broader view that also takes into account human and environmental factors innumerable counter examples can be found [6].

In general, arguments that raise the question whether our monetary system could not be replaced by a fairer and more efficient economy can be found easily [10]. While more "balanced" economic models that still include money [8] exist, there is also evidence that an economic model that not uses money at all may serve humanity best [9,10].

Two arguments against moneyless economies are, (i) that they are unable to solve the Economic Calculation Problem (ECP) and (ii) that it would imply a centrally planned economy, which is doomed to failure, as history has shown [11]. However, the Internet enabled worldwide real time exchange of information, wherefore decentralized economic planning without money is nowadays at least technical feasible. For example, a production target could be inferred by electronic surveys among society and then the resources allocated efficiently to the production machinery by up-scaled enterprise resource planning technics.

This thesis shall investigate technical possibilities for moneyless economies enabled by todays telecommunication capabilities. Thus it has to be investigated how the ECP can be tackled by the use of technology instead of money. The thesis may therefore develop an according economic model or refine one that was already proposed. 

[1] C. Camerer, R. Hogarth: The effects of financial incentives in experiments: A review and capital-labor-production framework, Journal of Risk and Uncertainty, Vol. 19, Issue 1-3, pp. 7-42,  Kluwer Academic Publishers, 1999.

[2] D. Pink: Drive: The Surprising Truth About What Motivates Us, Riverhead Books, 2009.

[3] E. Brynjolfsson, A. McAfee: Race Against The Machine: How the Digital Revolution is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming Employment and the Economy, Digital Frontier Press, 2012.

[4] M. Seligson, J. Passé-Smith (eds.): Development and Underdevelopment: The Political Economy of Global Inequality, Lynne Rienner Publishers, 2003.

[5] V. Pasquali: Income Inequality and Wealth Distribution by Country, http://www.gfmag.com/global-data/economic-data/wealth-distribution-income-inequality, last visited August 6th, 2014.

[6]  R. Smith: Capitalism and the Destruction of Life on Earth: Six Theses on Saving the Humans, http://truth-out.org/opinion/item/19872-capitalism-and-the-destruction-of-life-on-earth-six-theses-on-saving-the-humans, last visited August 6th, 2014.

[7] R. Fuller: Critical Path, St. Martin's Press, 1981.

[8] A. Popp, R. Albrecht: Plan B: A Systemic Revolution for Real Transformation, http://www.wissensmanufaktur.net/media/pdf/plan-b-english.pdf, last visited August 6th, 2014.

[9] J. Garcha: The First Civilization, http://www.mediafire.com/view/?6tmc6ld43lxc1gv, 2012.

[10] J. Fresco, R. Meadows: The Best That Money Can't Buy: Beyond Politics, Poverty & War, Global Cyber-Visions, 2002.

[11] L. Von Mises: Economic Calculation in the socialist commonwealth, Ludwig Von Mises Institute, 1990.

Final Report

50% Design, 10% Implementation, 40% Documentation (subject to change)

Supervisors: Patrick Poullie, Christos Tsiaras

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