Your next project? Design a new economic system!

NOTE HXA7241 2012-09-09T09:26Z

We are surprisingly close to complete economic revolution. And this is a very interesting thing to ponder and imagine from a software view. Does that seem crazy? The reasoning is, however, straightforward: 1, the economic system works on money; 2, money is really information; 3, information technology is revolutionary.

If you asked people just a few years ago about books, they would, with untroubled conviction, talk of how much they like physical material books and that nothing can beat that and so on. But ‘books’, as we have known them, are effectively over.

If you were to ask people about a radically different economic system, one with no money anymore – not no cash, but no money in general – they would answer with puzzlement: how could we not have money?! How would we ‘exchange’ things etc. (and where is the ‘store of value’, the ‘unit of account’)!? Could/would we just return to ‘barter’? What would we do?

But stop and look at the reality: how do we actually do things now? You go to work, and do things; you go to shops, and take things. That is actually what you do. There is no exchange. There is no ‘store of value’ or ‘unit of account’. All you do is identify yourself and/or your ‘service provider’ (bank).

There seems to be an interesting invisible conceptual block here. The common view of what we do do and what we might possibly do is almost completely obscured by an imaginary picture of what we think money, or the economy, is. But money/markets are not basic laws of nature. And it is stimulating to free one's thinking by trying to look at the subject more generally and find the underlying truths.

The economy is really just this: people doing things, and using some kind of information to decide what, where, how etc. (there is no money or markets fundamentally). A very general formulation of economics would be: using information to direct activity in an optimal way. We now have immense informational power, and even larger potential. We can decide what we do using other, much richer, information. The idea that the only ‘mechanism’ of economic information is the familiar money-based market system is an illusion that, apparently with few people noticing, has become entirely groundless.


Consider the example of more automated car driving: each car's route can be managed by knowledge of the rest of the network – optimised according to congestion, optimised to pack road area, etc. But this generalises to all your actions, because all your actions are part of a system of resource interactions. The more what you do involves informational means, the more everything you do can be shaped by more sophisticated systems of intent, interaction, effect.

Put the car example together with the idea of boycott. What if your every financial interaction were automatically set to re-balance according to your knowledge of the suppliers? That is a rather new kind of super-charged boycott. Really, it integrates another layer of informational control into the economic system itself.


A more orthodox way of putting this is with the term ‘non-market signals’. It is just that these other signals are the prior, more basic, more general and powerful concept, and conventional market signals – price – are a minor subset of them.

And when you look, you realise that most of the basic infrastructure for a very different system is already here – internet, phones, data, etc.. We could have a revolution in economic system and you would hardly even have to do anything different!

It is easy to get the sense that we are merely one or two big new web-apps away from this. Someone could come up with an unexpected idea (like napster, or bittorrent), gradually build it to great popularity, and within five years we would be staring across the brink of very deep pervasive changes in economic organisation.

But what would all this mean specifically? It is about software . . .


So here is a game to play, and much better than a tricky little puzzle: an imagination-project.

Imagine you are a software architect and engineer, in the larger more substantial sense of those terms. And you have been given a task: design the software structure for a new economic system. You have to find and clarify patterns of use and crystallise them into a logical structure (architecture). Then define a realisation in practical and efficient data and processing (engineering). You have already freed your mind with a very general information-oriented view; now, what exactly is needed? And how can it be done? . . .