I have been a fan of science fiction since my youth, but I have to say one of the concepts which appears over and over in science fiction has to be the silliest idea ever, and, sadly, it is a concept that many people seem to embrace as some sort of goal. And that is the idea that at some utopian point in the future money will disappear. We see it all over science fiction, from Star Trek to video games to utopian films. In each one, the biggest sign of an "advanced" culture is the elimination of money.

However, money is an essential part of human society, and, in some form, will always exist. Regardless of how advanced society becomes, the factors that create a need for money will always exist, so, unless our futuristic descendants revert to pure barter, something will be performing monetary functions for them as well.

Let us start with the basics. Humans have only a limited span of life, so their time is inherently limited. In addition, labor is generally seen as onerous, so most humans will not toil for every waking moment, which means that only some percentage of that limited life span will be spent working. Yet, despite the limited time, human wants are unlimited. Until you have reached absolute bliss where any change could only make things worse, there is still some improvement possible. So, if you spent some effort, you could improve your lot. The question is whether that improvement is worth the effort, or whether you would rather have the time to enjoy in idleness or recreation¹.

Now as humans have wants, and have to act to fulfill those wants, humans will engage in some sort of productive labor. even in the futuristic world of Star Trek, with the ability to convert energy to matter, someone has to provide that energy, as well as design the matter into which the energy will be converted. You simply cannot get something for nothing, even with high tech energy to matter conversion. The energy must still be provided and the matter must be shaped into something useful. Even more important, someone must invent the new "somethings" into which you can convert energy to fulfill needs better or to provide service never before conceived. So, no matter how high tech, someone will need to work to provide for their needs.

So, unless the future is comprised of autonomous individuals providing each for himself, there will also be trade of some sort. Individuals who are better at one profession will specialize in that, and in exchange for their services will expect some goods from their fellows. Nor will any technology or change of human society change this². As we have established, work is onerous. So, people will only work if they receive something in exchange for work of more benefit than the burden work places on them. If not, then to work for no benefit would be irrational, as it would amount to taking on a burden without recompense, when one could be enjoying oneself³. So, to induce someone to work he must either enjoy the immediate fruits of his labors (such as farmers at harvest time) or expect to receive future benefits (such as farmers at planting). If a worker is producing for others, rather than for immediate personal use, he must expect he can trade his produce for something he needs. And, once again, unless we expect the future to run on barter, that necessitates the use of money.

Of course, that is not the only reason for using money. Nor is it event he best. The other reason for using currency is the same reason I expect we will not see futuristic economies being run in a socialist fashion. As I explained in "The Limits of "Scientific" Management", a money economy, with prices freely set in a competitive market, is the only way to properly allocate scarce resources. And, as I argued in my footnote, labor is the most basic of scarce resources. As even the most futuristic economy will still require labor, without a money economy we will not know where to allocate that labor. So, unless we want a futuristic economy run like the old Soviet Union, with people waiting in line for tribble chow just because it is the only good available, while no one can get the phasers they need, then we will need a way to properly allocate labor⁴.

And that brings me to the reason I bothered writing about something as frivolous as science fiction plotlines. It is not just limited to science fiction, many people seem to believe that the existence of money is itself a sign of imperfection, a stage out of which we will eventually evolve. But just as those who denounce "greed" misunderstand the role of self-interest in properly ordering the economy, or those who condemn "profits" as something unseemly, those who think of money as something debased are off the mark as well. Money is the only possible way to organize a complex economy based on exchange. Any other attempt to manage the economy, based on non-monetary factors, will inevitably leave the vast majority less satisfied and will likely end up increasingly inefficient. Money is the sole means to keep an economy properly focused, any alternative leads, sooner or later, to degeneration and collapse⁵.

So, far from being something that will "wither away" the free market and particularly money will be with us forever. Unless the future brings a collapse that causes man to revert to total autonomy, or simple barter, it is impossible to conceive a future free of money. Especially if that future is anywhere near as advanced as those found in science fiction.

-----------------------------------------------------------------

1 I eschew the normal ECON 101 argument that "resources" are limited, because with sufficient ingenuity, any resource can be replaced with a more or less appropriate substitute. Petroleum replaced whale oil, coal replaced wood, iron replaced copper and bronze, and so on. A substitute can be made for any missing resource given sufficient time and effort. The one resource for which there is no substitute is human labor. Yes, brute force and every skilled manual labor can be replaced with automation, but human invention was required to create that automation. At the root of every solution is an investment of human effort or thought. So human labor is the single resource which cannot be replaced, so I speak only of labor and not of natural resources.

2. The Soviet experience proves this. in order to try to encourage productivity, the Soviets had to introduce all sorts of non-monetary recognition for productive workers. And int he end it still failed. Without benefits for working, workers will always do the bare minimum, as they receive the same benefits either way. It is only rational to provide only what is required, as any excess is simply given away for no benefit.

3. Charity work and volunteer work does not negate this, as those doing such work believe they are receiving spiritual or personal rewards more than making up for the burden. Were they not to find some sort of spiritual benefit or personal satisfaction from such labor, they would not do it. And for those who think future money-free society would be based on such volunteerism, I would point them to the chronic staffing shortages of almost every volunteer group and ask if they want to base an advanced economy on such a fragile structure, when simply allowing currency makes such inconsistency irrelevant.

4. In reality since the two areas of labor seem to be energy provision and design, I would imagine a "command economy" would emphasize energy, to create impressive numbers, and neglect new creations, leading to an economy oversupplied with what amounts to raw materials, but sorely lacking in new products. In the unlikely event we discover energy to matter conversion, I would foresee dictatorships suffering from stagnation, while free economies would be less well supplied with energy but awash in novel designs.

5. In the present day command economies, such as China or the former Soviet Union, can use the price information provided by the free economies, which gives them something of an approximation of the desires of their citizens. It is still imprecise and a poor fit, as evidenced by the misdirected production of both nations, but it allows them to persist longer than would a world of all command economies.