---------- Forwarded message ---------- Date: 29 Jul 1999 19:27:25 -0000 From: Post-Industrial Issues <[EMAIL PROTECTED]> To: List Member <[EMAIL PROTECTED]> Subject: The Dream Life of Money Post-Industrial Issues - http://www.well.com/user/mgoldh/ here is my latest column, whihc will also appear in the web magazine telepolis The Dream Life of Money and the Coming of the Attention Economy By Michael H. Goldhaber Of late, aspirations of monetary wealth seem to have taken on a new life. Here in the US, Internet stocks are the new routes to rapid fortune, and the repercussions of their rise are felt throughout the money economy. Everyone in Silicon Valley, and seemingly in the USA as a whole, is crazed with visions of easy and endless wealth, eagerly counting millions, waiting until they turn to billions, or, more likely admiring someone elses fortune.There are jobs for almost everyone, and little or no inflation, at least partly because the lure of stock options and future stock wealth is enough to hold salaries down. Stock averages and overall investment are also sharply rising as the lure of new riches spreads. The sense of new wealth on the horizon is so dramatic that in some Valley startups the principals have walked away from millions of dollars they could have collected from stock options had they stayed a little longer in their old firms. Bill Gates of Microsoft (outside the Valley) recently passed 100 billion dollars in wealth, and according to news reports the Valley itself now has about 250,000 paper millionaires; 64 new ones hatch each day. (One drawback to life in the Valley is that an ordinary house can cost you nearly that entire million; but of course you need only make a down payment; with the promise of rapidly growing wealth, the mortgage payments are not intimidating.) Does all this signal a glorious future for money as the blood and oxygen of economic life? Quite the reverse, I think. Rather it is one more sign that money as such is rapidly losing its centrality and importance, its real usefulness. It is precisely because money now means so little that it can lead its new dream life. What actually counts, as I have been arguing all along in this column, is, more and more, attentionthe quantities of attention you have the capacity to pay to others, and the quantities of attention you can receive. If you garner a lot of attention, you are a star, and traditionally stars are showered with anything they want, certainly including money, from their awed fans. It is no different now, except that the Internet has helped create a new class of stars, the ones behind Amazon.com, Yahoo, E-bay, E-trade and the like. It is because those on line pay so much attention to the on-line stars (either directly or by paying attention to their creations) that they are willing to see them as the ones to hitch their wagons to. Of course, it does become a circular process; in these last days of money, like the end of the feudal period, the trappings of the old wealththen armor, castles, and the like, now nothing more than dollar amountstake on new luster. Money is no longer counted in bars of gold, or even dollar bills, but rather in pure digits. While one cannot easily buy attention with money, we are awed these numbers when they are large enoughenough so that there are web sites which calculate Gates net worth from second to second. Meanwhile, Yahoo and the other portals now will instantly tell you your own net worth in stocks and cash if you have fed in the basic data just once, and many users check theirs obsessively To grasp the fate of money in the near future, it will help to pause to review the character of money as it used to be. Archaeological remains of money as coinage of some sort go back several thousand years, but since then money has had its ups and downs. The Roman empire was an early high p oint. Then came the medieval economy of western and central Europe, which was one of many in which money had little importance in the daily life of an average person; the large majority took part in monetary transactions a few times in their lives; only the few in the towns made much more common use of it. In Western history, money came into its own again with the rise of trade, and most fully only with the rise of standardized factory-made goods in the 19th century. Only standardized goods are readily countable or measurable, and thus only such goods can readily achieve a definite price in standardized, countable money. Prices or goods such as a pound (or kilo) of sugar or nails or a yard of canvas or 100 watt light bulbs rose and fell with supply and demand, unless monopoly pricing prevailed. Equally, only work under standard conditions promotes standardized rates of pay, which also varied according to supply of and demand for workers. But supply and demand stops making much sense when material scarcity hardly exists as an issue, which is increasingly the case today. Consider the vastly abundant tee-shirt; it is priced according the designer logo. The more of a star the designer, the more expensive what is still basically the same as a much cheaper shirt. Intrinsic manufacturing costs are so low they have little effect on the price. Internet services or software, for which supply is in essence infinite, likewise are priced arbitrarily, at costs ranging from nothing to hundreds of dollars per subscription. While we now have a global economy, production of essential goods occupies a smaller and smaller percentage of the relevant population. Hence earnings too no longer rest on a meaningful standard of hours worked at a certain intensity. Rather, what counts is much more tied to the attention that you are able to gain, whether as a star lawyer, a star stockbroker, or a star professor or not. All of this means we have left the material economy behind, and we are increasingly dominated by the new kind of scarcity that cannot be overcome: the scarcity of our own or others attention. Look at how this new state of affairs affects the workings of the money economy as it remains. As long as more money is pumped into the stock market than is taken out, each net chunk of money fed in keeps circulating among stocks, raising the price of one company after another, essentially endlessly. Money leaves the market only in the form of stockbroker commissions or when investors withdraw their money to buy ordinary goods of some kind. With low-commission online trades, the number of transactions before each chunk of money invested is used up keep rising, so the stock keeps rising more too. Add to that the fact that more and more Americans have money automatically deducted from their pay to be invested in the market, and you understand why the value keeps rising, and will, at least until the baby-boom generation who are now between 35 and 55 start retiring en masse. Meanwhile, all these riches the Internet seems to be creating out of nothing tell us we have unlimited funds to shopand therefore seemingly to underwrite a continuing increase in the production of goods and services that the money economy is supposed to be about and that justifies the rising values of corporate shares. What we dont have, however, is the unlimited attention capacity needed to make and utilize sensible purchases; if you buy something it takes attention to choose it, to take it home, unpack it, to use it, to maintain and store it, and to find when you want to use it again. The Internet has helped short circuit some of those demands on our attention; no only does online shopping at times make it easier to find what you want, but it creates new categories of things to buy that you need never take home, store, or even use, but just pay for (with a credit card, of course). Examples would be web services that you sign up for, pay a monthly cost for, and quite possibly never log onto. Other services send you frequent e mails, but you can just filter them into mailboxes you never open. Still that seemingly pointless shopping does have psychic advantages. You can feel you have done something worthwhile, if what you buy looks as if it will be edifying, useful or interesting, despite the fact that you never again make use of it. You can refer to it in conversation, feeling that it keeps you in the know. And unlike magazines and newspapers that you may subscribe to and not get around to reading, it doesnt pile up embarrassingly in your house. Nor do you have to feel guilty about throwing things away unread and unused. Except perhaps for a small and easy to ignore reminder on your credit card bill, (which you can pay without reading) you need pay virtually no attention to your net service purchases without having to use them. Meanwhile, though you may have forgotten about it, the net service continues; workers are employed; stars are well rewarded, the subscriber list can be long. A lot of useful production seems to be under way. This explains the paradox of how the money economy can boom just at the time when it has become outmoded. But while the practically the entire money economy including both old and new sectors is apparently booming, measured by stock market capitalizations a wholesale shift of the old monetary wealth to the new class of stars is underway. Companies such as America Online, Amazon.com and Microsoft, are now worth most according to the stock market, regardless of whether they have ever earned profits, and regardless of the fact that their book values (in essence the value of buildings, machines and other goods were they to be sold off at auction) are only a fraction of those of companies like General Motors that are now valued much less in stock terms. This means the new companies can now easily grab up the old, just by handing over an equal value of shares. If, say, Microsoft or America Online chooses to acquire Ford or GM, cars might become free gifts handed out as an extra inducement to buy online services. This shift of wealth and of the attendant meanings also resembles the transition from feudalism to capitalism, when the old nobility, rich in land and titles, but impoverished in monetary terms, sold off its estates and married off its daughters to the new class of wealthy merchants and entrepreneurs, who mistakenly thought they needed these accoutrements and the titles that went with them to amount to anything. Stars already have the attention that really counts, even prior to their accession to power over money and old industries. What then is the future of the money economy? Again the analogy with the decline of the feudal system supplies a hint. While the trappings of feudalism rose in visibility and continued to be taken seriously for a few generations, eventually they lost even that importance. Today they survive only as a prideful little de or van or von in family names, as tourist sites and in a few traditions, such as the opening of the British Parliament, that mostly mystify outsiders. Money will likely survive in coin collections, as a means for those on the far periphery of the attention economy to conduct transactions for material things, and as more or less meaningless numbers that occasionally crop up in the midst of the active transfer of attention, but as little more. By the time this period arrives, the stock market might have collapsed; alternatively, and just as easily it might have kept on rising, fictitious prices remaining suspended at some high level, as weightless as the ghosts they are already becoming. ______________________________________________________________________ To unsubscribe, write to [EMAIL PROTECTED] MSN Messenger Service lets you stay in touch instantly with your family & friends - Visit http://messenger.msn.com
