Occupy Wall Street and the End of Money as We Know It
The Occupy movement is now going after museums like MoMa as corrupted by market forces. Here's why that means ideas like "data as currency" are about to have their day.
The Occupy Wall Street Movement will bring forth an era of new art, true experimentation outside the narrow parameters set by the market,” was the chant at one point, voiced by a crowd comprising a few dozen artists, students and passers-by outside MoMA.
Artist Dave Kearns complained about MoMA’s regular admission fee, calling $25 “an obscene amount of money," and adding, “There should be more nights when it’s free.”
That phrase, "the narrow parameters set by the market," is noteworthy. What I believe is going on is that people have lost confidence in the ways our economic and social institutions are structured and are looking for an alternative. To paraphrase William Jennings Bryan, the 99% are saying to the nebulous 1%, "You shall not crucify mankind upon a cross of debt." They don't really know what they want, just that this isn't it.
This existential crisis for our economic system has a parallel from not too long ago. In the 1920s the West was grappling with the fallout from World War I. Germany was bankrupt. France and England had gone deep into debt, borrowing from the United States to finance the war. Germany owed reparations to France and England. England and France owed money to the US. The US, primarily due to the leadership of Benjamin Strong, then-president of the New York Federal Reserve, was trying to head off a worldwide economic crisis by figuring out how to get gold back from the US to Europe.
European leaders believed that, unless gold stores were replenished and currency made fully convertible into gold, the economy wouldn't recover. Leading opposition to this line of thinking was John Maynard Keynes, who argued that severing the ties between gold and the economy was a key part of the recovery. He believed a gold-centric system had outlasted its usefulness. The time had come for something new.
It gets to the question of what money is, its societal purpose. For most of us, our first response is "it's a store of value." But what does that mean? Money is a signifier. It constitutes status. Power. Wealth. It's information. It's a very narrow form of data.
Ah, data. We're swimming in it now. It used to be that money was one of the only forms of data we had. Before we had computers and databases it was the only way we could keep score, so to speak.
No longer. Today we have credit scores, SAT scores, college GPAs, employment records, medical records, and increasingly we'll have Klout scores and other ways of measuring our personal influence. Why should our history with debt repayment constitute the sole measure by which society deems us creditworthy, and the measure by which we have built our leveraged, intertwined global economy? Why should a derivatives trader earn more than a guy who produces a YouTube video that garners 500,000 views? Both individuals are just data manipulators. In the Web 3.0 world, money is data and data is money.
Is the notion of "data as currency" so absurd? We've been paying for products with data for years. Just ask Google (GOOG), Facebook, and LinkedIn (LNKD). Up until now we as consumers have mostly been giving this data away for free, letting companies use it for their own economic gain with very few consequences in cases of abuse (hey, look, there's Facebook squirming over in the corner). This will surely change in the years to come.
But that's part of what our societal angst and Occupy Wall Street are about -- intangible goods and data are rising in value and power while the pillars of the last century, money and credit, are fading in importance. Policymakers are fighting this because they don't understand the changes that are occurring, and would consider them inane just as the 1920s-era central bankers would guffaw if you told them the world's monetary system would function for decades without a physical commodity-backing currency. This promises to be an incredibly volatile and challenging period, but one that I believe will ultimately be a huge boon for those outside the financial elite.
It'll be a great time to be an influencer in the world of people and data -- and increasingly a less-great time to be Mr. Burns.
(See also: Why 'Occupy Wall Street' Is a Radical New Business Model)
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