Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Occupy Wall Street and the End of Money as We Know It

By

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.

PrintPRINT
Ever since the day a few weeks ago when protesters occupied the Brooklyn Bridge, Kevin Depew and I have spent a lot of time talking about the significance and socionomics of Occupy Wall Street and some of the bigger themes at work. This Bloomberg News piece in particular, about the "Occupy Museums" movement's action outside the Museum of Modern Art, got our attention as a sign of the protests' scope:

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)

Twitter: @conorsen



No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

PrintPRINT
 
Featured Videos

WHAT'S POPULAR IN THE VILLE