When a sociologist talks about money

So, this web thing then.

If there\’s lots out there for free then we shouldn\’t be needing to use money, should we?

Hmm. Then we get a sociologist on the case. And as sociologists often do she\’s leapt on one part of what economists say about money and ignored all the rest.

Yes, as Simmel points out, money can be used to purchase positional goods: ones that show our social status. Veblen had much to say on the same point (conspicuous consumption and all that). And our sociologist is entirely right in pointing out that this happens upon the web too. While not on the web that $10k iPhone app that just showed a red diamond (ie, that you\’re rich enough to spend $10k on something entirely useless other than as an advertisement for wealth and thus possible social status (others will of course use it as a signifier of being a dick, for we do not have a single scale of social status)) is an example of this.

However, to think of that as all that the web can tell us about money is a gross error. For as economists also point out, money is a medium of exchange. Something we really only need when we are pursuing scarce goods.

And as you might have noticed, 15, 20 years ago, information, news, opinion, was a scarce good and you had to pay money for it. This blog, the G\’s website, the WWW itself have rather removed that scarcity. Which is why we no longer use money to access information and opinion, as a not scarce good doesn\’t require a medium of exchange for its acquisition. Which is precisely the problem the newspaper industry has as it goes bankrupt all around us.

As, erm, economists have noticed but apparently sociologists haven\’t as yet.

4 thoughts on “When a sociologist talks about money”

  1. I’m not sure gem indicates anything really, other than the App Store was new and 8 people didn’t think clicking on something on their phone would really cost them $999.99.

  2. Socialologists are poor mathematicians and historians, too. In Ms. Siimel’s article, we are informed that fiat currencies have been with us for “millenia”. As I understand it, fiat currencies have been with us for little more than a century, which is a lot less than 1000 years.

  3. I do find it interesting that, online, where as Aleks points out, amongst goods where there are no natural scarcity, people prefer to play games where an artificial scarcity has been created, over games where everything is available and you’re only limited by your creativity.
    It implies that struggling to achieve goals with limited resources is something important to humans, whether that be to happiness or some other form of life satisfaction.

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