Money makes the world go round

But for how much longer? (For this article you'll have to really use your imagination).
Please watch this 3 minute video as a prelude http://www.youtube.com/watch?v=JvLpYYxXbto

At first glance, a moneyless world is a very hard one to imagine. The concept of money is so drilled into our very being from such a young age that it has become the driving force of human life. Money is the collective illusion that everyone from the homeless man on the street corner to the CEOs of Fortune 500 companies recognize as being a total farce. We all know that money doesn't actually have any intrinsic value and that it can only purchase things of value based on an illusory agreement society has made with itself.

In order to chart a prediction for where the future of money lies, we must look at its history. The first form of economy was barter: I'll give you three chickens, you give me a goat. Barter allowed for the agreed upon trade of wealth from one to another. Once it was recognized that barter was an inefficient basis for economic activity in came precious metals; primarily gold. These metals represented value. Since the quantity of a given metal is finite, economies could only grow if they were to amass more of the metal. This played a lead role in a number of resource wars, most famously the European conquest of the rest of the world.

Since metals were cumbersome and impractical, cash came to represent gold. With this change, a piece of paper representing an amount of gold in a bank somewhere would be used to make purchases. Then paper money came to only represent itself, followed by digitized money representing paper money, which will also soon only represent itself. Thus we have gone from a goat representing a goat, to gold representing a goat, to paper representing a goat, to ones and zeros in a hard drive representing a goat.

As the global economy's primary reserve currency, the American dollar is held in large quantities by all major governments and institutions. As such, the value of the US dollar sets the international standard against which the values of all other currencies are decided. So, all monies are based on the US dollar, but what is the US dollar based on? Nothing, at least directly. Starting in 1913 with the creation of the Federal Reserve (which is about as Federal as Federal Express) and ending with Nixon's dissolution of the gold standard, bankers realized that by disconnecting the value of the dollar from anything of intrinsic value, the economy would explode.

The 20th century was one of unprecedented economic growth. Without the hindrance of the dollar having to be backed by gold, the Federal Reserve could simply print new money out of 'thin air' to stimulate growth. Of course, as the quantity of dollars in circulation rises, the value of the dollar decreases. As, the value decreases, prices go up - basic inflation. Not a seemingly bad system you might think; who cares if the dollar decreases in value, everything else adjusts accordingly, its worked for nearly 100 years.

But here's the key: there is interest to be paid on every new dollar. Just like a bank wouldn't give you a loan if it wasn't going to be paid interest, so to do the American people pay interest on the money they use. Of course, since the Federal Reserve has a monopoly on the money supply, they print off more money to be used to pay off the debt, which in turn creates more debt. Welcome to the debt-based economy. As Henry Ford once said, "it is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning."

Today, with a 70% consumption-based and only 30% production-based economy, the United States has gone from the world's largest creditor to the world's largest debtor nation. With $10 trillion in public debt, $99 trillion in future obligations, and a domestic oil supply that long since peaked in the 1970s, the future is not bright for the current system. Debt cannot be sustained perpetually, and there comes a time when bankruptcy must be declared. As the dollar continues to be inflated non sustainably, prices rise, wages remain the same, the economy begins to stagnate, bankruptcies are declared, more money is printed off to bail out banks, banks reclaim property and possessions, businesses continue to close, more money is added into the system to stem foreclosure, more inflation, more stagnation, and eventually, as many top economists are predicting: collapse. Modern day America has fallen prey to a modernized version of what the revolutionaries of independence fought against, and what the founders sternly warned of.

A collapse of the American economy would mean the end of the global economy - at least as we know it. Yet as we see our current paradigm struggle to keep afloat (resource wars in the Middle East, endless media distraction and fear-mongering, etc.) we do see the future begin to unfold. The beginnings of the next form of human economy are emerging on the internet. So far, the Wikinomic model of a decentralized, collaboration-based economy has proven incredibly succesful with the spread of information and entertainment. By having direct access to an endless and ever-growing ocean of information and ideas, we are beginning to collectively wake up to the possibility that we can live in a truly free society, based on the recognition that giving is always better than taking and that we are all in this together.

The final remnant of our taking-based economy is oil. As it peaks and declines we will finally be released from the slimey grip it has on us and our planet. Truly next-generation technologies such as cold fusion and zero-point either already exist or are being extensively researched. We now have the knowledge, the technology, and perhaps soon the wisdom to move towards an inclusive, collaborative economy with a decentralized power structure in balance with ourselves and nature.

Money is the general basis for the shitty situation we're currently in: war, crime, environmental degradation, etc. As the global economy begins to spiral there will no doubt be some desperate attempts at trying to revive it, and these may work temporarily, but its self-destructive nature is inherent in its design.

From barter to precious metals to paper money to digitized money to collaboration, economy is coming full circle, returning to a sustainable position in balance with itself.

I have no idea what a post-money economy would look like, but its fun to entertain the possibility.

I hope our wisdom will grow with our power, and teach us, that the less we use our power, the greater it will be.
-Thomas Jefferson