222
10 The Economy 4.0
10.19 Appendix 2: Multi-Dimensional Value Exchange
So far, we haven’t addressed the kind of financial system we will need for the
Economy 4.0. In its current form, money has a serious short-coming: it is onedimensional.
50 This makes it unfit to manage complex dynamical systems. From
the perspective of control theory, this problem is completely obvious. For example,
complex chemical production processes cannot be governed using a single control
variable such as the concentration of a particular chemical ingredient. In a complex
production process, one must be able to control multiple variables, such as the
temperature, pressure and concentration of numerous ingredients.
It is also instructive to compare this with ecosystems. The plant and animal life
existing in a particular place is not solely determined by a single factor such as
the amount of water. Temperature, humidity and various kinds of nutrients such as
oxygen, nitrogen and phosphor play a role, too. Our bodies also require many kinds
of vitamins and nutrients to be healthy. So why should our economic system be any
different? Why shouldn’t a healthy financial system need several unrelated kinds of
value exchange?
51
It is helpful to recognize that the financial system is primarily a system to coordinate the use of resources. Therefore, we shouldn’t hesitate to invent better coordination mechanisms. For example, besides conventional money, our future value
exchange system could consider environmental factors and other material and nonmaterial externalities such as social capital (for example, trust and reputation).
52 In
fact, the Finance 4.0 system introduced in a later chapter does this.
10.19.1 We Could All Be Doing Well
The circumstance that people respond to many different kinds of rewards, as we have
seen in the previous chapter, allows us to establish a multi-dimensional incentive
and exchange system (which is very different from a nudging approach
53 ). This
system would support the self-organization of individuals and companies, which is
highly important to successfully manage complex socio-economic systems in future.
However, compared to the financial system we have today, such new forms of value
would not necessarily be easily convertible. As a result—depending on how many
dimensions of value we would distinguish—everyone could be doing well, when
50 Even though there are many different currencies in the world, we can convert them in an almost
frictionless way, which makes money effectively one-dimensional.
51 This would lead us to “multi-dimensional finance”, and entirely new era in the history of money.
52 Further details of this idea can be found in the International Application No. PCT/IB2015/050830.
53 In contrast to nudging, this approach is not trying to manipulate the decisions of people by
exploiting their cognitive biases, but it builds on active decisions and trustable information systems,
which are minimizing data biases.
10 The Economy 4.0
10.19 Appendix 2: Multi-Dimensional Value Exchange
So far, we haven’t addressed the kind of financial system we will need for the
Economy 4.0. In its current form, money has a serious short-coming: it is onedimensional.
50 This makes it unfit to manage complex dynamical systems. From
the perspective of control theory, this problem is completely obvious. For example,
complex chemical production processes cannot be governed using a single control
variable such as the concentration of a particular chemical ingredient. In a complex
production process, one must be able to control multiple variables, such as the
temperature, pressure and concentration of numerous ingredients.
It is also instructive to compare this with ecosystems. The plant and animal life
existing in a particular place is not solely determined by a single factor such as
the amount of water. Temperature, humidity and various kinds of nutrients such as
oxygen, nitrogen and phosphor play a role, too. Our bodies also require many kinds
of vitamins and nutrients to be healthy. So why should our economic system be any
different? Why shouldn’t a healthy financial system need several unrelated kinds of
value exchange?
51
It is helpful to recognize that the financial system is primarily a system to coordinate the use of resources. Therefore, we shouldn’t hesitate to invent better coordination mechanisms. For example, besides conventional money, our future value
exchange system could consider environmental factors and other material and nonmaterial externalities such as social capital (for example, trust and reputation).
52 In
fact, the Finance 4.0 system introduced in a later chapter does this.
10.19.1 We Could All Be Doing Well
The circumstance that people respond to many different kinds of rewards, as we have
seen in the previous chapter, allows us to establish a multi-dimensional incentive
and exchange system (which is very different from a nudging approach
53 ). This
system would support the self-organization of individuals and companies, which is
highly important to successfully manage complex socio-economic systems in future.
However, compared to the financial system we have today, such new forms of value
would not necessarily be easily convertible. As a result—depending on how many
dimensions of value we would distinguish—everyone could be doing well, when
50 Even though there are many different currencies in the world, we can convert them in an almost
frictionless way, which makes money effectively one-dimensional.
51 This would lead us to “multi-dimensional finance”, and entirely new era in the history of money.
52 Further details of this idea can be found in the International Application No. PCT/IB2015/050830.
53 In contrast to nudging, this approach is not trying to manipulate the decisions of people by
exploiting their cognitive biases, but it builds on active decisions and trustable information systems,
which are minimizing data biases.