Michael Intriligator, Professor of Economics, Political Science and Public Policy, University of California, Los Angeles; Director, UCLA Center for International Relations; Senior Fellow, Milken Institute
While moderator Michael Intriligator listens, Alvin Toffler talks about the themes from his new book, "Revolutionary Wealth."
Just when you thought that you understood the economy, Alvin Toffler turns the traditional model on its head. Well, maybe not on its head, but in his new book, Revolutionary Wealth, Toffler suggests that the classic economic model ignores a hidden economy, the "non-money" economy. The "wealth system" he writes about is the first attempt to describe how the non-money and the money economy interact with each other. He believes the "wealth system" will be a change on the order of the industrial revolution, which changed society as we know it.
Toffler elaborated on the non-monetary economy by using the example of education. How many people went to "computer schools," he asked rhetorically. Then he reflected on an individual′s first exposure to a TRS-80 computer from Radio Shack in the 1970s. After the individual had purchased the computer, taken it home and read the manual, it still seemed that there wasn't a whole lot new owner could do. Thus, individuals searched for the "computer gurus," who were in actuality "anyone who had bought it [the computer] a week earlier" because computer schools didn′t exist. People are educating each other all the time outside the confines of the established system, he said.
A key component of this non-money economy is the concept of the "prosumer," he explained. These people are both producer and consumer of goods and services. During the talk, Toffler elaborated on two key concepts in his model: outsourcing of non-monetary work and marketization and demarketization of non-money work.
Toffler believes in three types of jobs in one's life. First, there is the full-time job one goes to every day. Second, there is one's domestic job (e.g., washing dishes). Finally, there is the third job, the outsourced job. These jobs are the jobs the corporate world outsources to the consumer, such as Fed Ex making the consumer track his own package rather then having a customer representative perform the job. He does not claim that this type of outsourcing is a bad thing, but rather that it is excluded in the economic analysis since it′s a "job" that is non-monetary.
Many individuals contribute to the non-money economy. We see this every day where people work in their homes, have hobbies and volunteer. Toffler claimed that these jobs are constantly being brought into and out of the marketplace and cited the gaming industry, Famous Amos and Linux as examples of hobbies that are now in the money economy. In contrast, for cases of demarketization, he cited innovations like Napster and Skype, an Internet telephone company.
The session wrapped up with a series of question from the audience. Two of the most interesting questions were about the role of science and technology in the new model and a deeper question: "Is the non-monetary economy a new concept?" Toffler said he believes that science is under attack. When he was child, he said, scientists were heroes. But a different picture exists today. Furthermore, he said he worries what repercussions the lack of interest in science will have for the future. The role of a scientist, in his opinion, is to question life and society, and he noted that Noble Prizes are won by challenging and refuting prior truths. The critical analysis of life helps drive the economy, and without the questions, we would not be where we are today.
Finally, an audience member questioned whether the non-monetary economy is a new concept? During the Middle Ages, he said, there was little use of a monetary system. Toffler agreed with the comments but noted that he doesn't believe that history repeats itself. Things may have the same characteristics, but the environment in which these events happen matter. Even though terrorists existed in the past, the fact that terrorist could have weapons of mass destruction today changes the implications.
Global Conference 2013
Former Prime Minister Tony Blair, philanthropist Bill Gates and Strive Masiyiwa of Econet Wireless discuss advancing prosperity in Africa.
