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The Future of Money
The Future of Money
This Spring, investors and financial advisors have been watching statements by Federal Reserve chairman Janet Yellen for revealing clues as to when interest rates will rise. Two months ago in April, we Americans filed our 2016 taxes. Last month, Republicans revived discredited supply side trickle down economics and attempted to sell the nation on the crackpot theory that large tax cuts for the rich will help the common man. Next month, the UK will hold a general election as Prime Minister Teresa May attempts to get support for the economic policy of Briton leaving the European Union. We live in volatile times and are continually surrounded by issues of money. This might be a good time to look ahead and ask what is the future of money and economic systems.
If you doubt that money and economic systems will change and evolve over time, consider what the world was like before the use of money caught on. All business transactions took place by bartering with other goods such as livestock. Can you imagine saving all of your wealth and saving for retirement in something like livestock in your back yard?
There is a globalization trend worldwide. Such a trend could decrease the number of currencies as the world makes more international trades. There could come a time where there are only 4 or 5 different currencies in use.
There is also a definite trend to alternative more mobile forms of money. Non-cash transactions with credit cards and gift cards have become commonplace. However the fastest growing alternative form of money is electronic transactions. The rise of the Internet has enabled the explosive growth of electronic transactions. Currently many people pay all their bills on line. Internet electronic transactions have also enabled amateur day traders to buy and sell stocks live and compete with professional money managers. As day trader trades are made on margin, it has become frightening easy for inexperienced, sheep-like day traders to lose a fortune in a small period of time.
In 2015, the TV show 60 minutes showed a possible future of money. The residents of Kenya make most economic transactions via smart phones. Most developed countries use smart phones to pay for things, but you typically need to be linked to a bank account or credit card. In Kenya, you don't need a bank account, you don't need a credit history, or very much money for that matter, making this country in East Africa a giant experimental laboratory defining the future of money. Kenyans load credits into smart phones and, when they want to buy something, they pay by simply transfer credits from their smart phone to the seller's phone.
One wonders if actual money will someday be a thing of the past. Economist Mike Moffit doesn't see actual money becoming extinct. “I personally don't think paper money will completely disappear any time in the near future. It is true that electronic transactions have become more and more common over the last few decades and I see no reason why this trend will not continue. We may even get to the point where paper money transactions become incredibly rare - for some, they already are! At that point, the tables could turn and what we now consider paper money may actually act as the backing to our electronic currency, the way the gold standard once backed paper money.”
What kind of economic system will exist in the future? A classic theme in Sci Fi literature and movies is future utopian civilizations. Utopian civilizations are often portrayed as being egalitarian in culture, justice and economics. Often there is an abolition of money. I hate to be a pessimist, but unless mankind radically changes in the future, such egalitarian visions are idealistic dreams. The trend in the past 70 years shows the the success of capitalism and the failure of centrally planned economies. It appears that capitalism is the wave of the future. However it should be noted that capitalism fails when freedom is removed or restricted. There currently is a disturbing global rise in authoritarian rulers. Such a trend may blunt the trend in capitalism. Blunting capitalism could lead to several dystopian societies in the future.
What does money's future mean for Science fiction? If you are writing a future-based story, it would add realism if you added futuristic ideas on money. In the 1986 movie, Star Trek The Voyage Home, the Enterprise crew goes back in time to visit a present day San Fransisco. William Shatner playing Captain Kirk, notices a few people buying items in the city streets and notes, ”They're still using money. We'll have to get some.” It is a great line in the movie as it made me wonder what form of money and what kind of economic system will exist in the the future. One thing for certain—our civilization will evolve and money in the future will be different. After all in our present time, we don't make monetary transactions by barter and paying with livestock. Your comments below are welcome...
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