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Free: The New Currency

December 27th, 2012 by dimpledbrain

About 10 years ago while I was still an undergraduate, I remember taking a course called Knowledge Economy. The lecturer who also co authored the textbook we were using, described how knowledge will be the new capital vs what emerged from [the remnants of] the Industrial Revolution where the factors of production are (a) labour (b) land and (c) capital (raw materials and money).

Fast forward 10 years and terms like wiki (think free, think Wikipedia) and collaboration become ubiquitous. Then enter Goldcorp Inc’s gambit: release-my-secretive-geological-data-to-the-world-and-find-me-gold contest. March 2000 sealed the triumph and became the landmark case for collaboration. Coincidentally, Wikipedia was conceptualized and created at about the same time.

A natural consequence that flows from this is the word ‘free’. Information becomes abundant. I would presume that the first wave of everything-is-free comes from the proliferation of social networking sites.

So far so good. No surprises.

The next question then becomes does this just stop here? Well, Facebook couldn’t really monetize their website, can they? So much for the dot.com millionaires (who smoke weed).

I’m not sure if we are prepared to take the word ‘free’ into the real economy. Keeping that word in the balcony of the Internet sphere is comprehensible or perhaps logical, but in the real economy? Free lunch anyone?

Check this out:

Discover great free apps and get rewarded with gift cards! http://m.freemyapps.com/share/email/92dbde84

It allows one to convert the credit into Amazon Gift Cards or iTunes Gift Cards.

A far cry from the full potential of the new radical currency but I believe it’s pointing towards that direction. Compare this for a moment with the discovery of electricity during the Industrial Revolution, i.e. prior to 1800s. It wasn’t until 100 years later that electricity replaced steam power. (Why? Briefly because of the setting in local factories that still favoured steam power). Well, ask any true British and you may get a better explanation than this and with great gusto.

Isn’t the new world exciting?

I would like to end this post with 3 departing thoughts:

(a) The future of free – we wouldn’t be able to tell for sure how this whole free economy will turn out to be, in all its eventualities. It depends on so many other factors. Take a look at your watch for example.

  • Why do the earth and the moon turn counter-clockwise and our clocks turn clockwise? The first clocks, i.e. the sundials, were created in the northern hemisphere where the earth rotates counter clockwise, which means that from our point of view the sun appears to move across the sky in a clockwise direction. Had the first clocks originated in the southern hemisphere instead, say due to historical events, the ones we use today would probably turn counter clockwise.
  • The same thing can be said of our cars. There were steam powered cars, electric cars and gas powered cars in the early days, from which one emerged as the standard platform. (Point to wonder – what about the mobile phone platforms that we are using today?). From history, we appreciate the fact that the standardization of a singular platform is necessary to revolutionize the said industry.

(b) Looking back, there is one thing that I don’t agree with my lecturer. Knowledge is not free. Information is. It is my conviction that knowledge will continue to remain scarce although the barriers to absolute knowledge will be lowered with time. Relatively speaking however, new branches of knowledge will remain scarce. (Thank goodness for this or else Adam Smith may jump out from his grave).

(c) Self provisioning could be the new way of life with the help of (b) above. That means work and spend less but make, grow, and do more for oneself. The still revolving green economy and ‘prosumer’ are starting to point towards that direction.



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