The very currency that ordinary people spend their entire lives chasing is projected to lose its relevance entirely by the year 2036. This remarkable prediction does not come from an astrologer, but from one of the wealthiest individuals on the planet. The underlying reasons he has explained for this shift are likely to bring joy rather than sorrow to most people. This forecast was delivered by tech entrepreneur Elon Musk, who not long ago became the world's first trillionaire. He recently outlined what will unfold over the coming decade to strip money of its value, highlighting the specific role that artificial intelligence will play in this transformation.
Why Will Money Lose Its Significance?
A recent interview featuring Elon Musk alongside The Economist editor-in-chief Zanny Minton Beddoes has been widely circulating. During this conversation, Musk put forward a claim that has left economists and the general public alike deep in contemplation. According to Musk, by the time the year 2036 arrives, money will retain no actual value. In his view, artificial intelligence and robotics are steering our world toward a juncture where every essential item and service will be delivered in such abundance and with such ease that the entire concept of currency will vanish permanently.
Elon Musk Explains the True Definition of Money and the Role of AI
When Musk was questioned about how shareholders could remain so carefree regarding wealth, he challenged the very foundational definition of money. Why do we desire currency in the first place? To purchase clothing, housing, vehicles, and entertainment. Musk's underlying logic is that once AI and robots collaborate to scale up the production of all these goods and services to a point that surpasses human consumption capacity, the role of money will dissolve automatically. When every item is manufactured in limitless quantities without any human exertion, the need for a currency medium to acquire it will no longer exist.
Today, the primary reason we toil from dawn to dusk, commute to jobs, or manage businesses is that our desires and requirements are vast, whereas the resources fulfilling them remain scarce. Imagine a scenario where every conceivable task, whether it is agriculture, cooking, constructing buildings, or transporting goods from one place to another, is executed instantaneously by AI and advanced robots. What would happen then?
Musk believes that when there is no scarcity of any kind and production exceeds our requirements by a thousandfold, the market price of everything will approach zero. Whether banknotes remain in pockets or bank balances linger, they will hold no value because everything will already be universally available.
The threat to employment and the question of livelihood also spark significant debates. With the advent of AI leading to widespread job losses, the foremost question is how ordinary citizens will sustain themselves. The Economist editor Zanny Minton inquired whether heavy taxation on extremely wealthy individuals like Musk would be necessary to fund a Universal Basic Income, providing a fixed monthly stipend for the general populace.
Presenting a distinct viewpoint, Elon Musk suggested that governments or treasuries should transfer funds directly into citizens' bank accounts without any cumbersome bureaucratic hurdles. According to traditional economic principles, whenever governments print banknotes recklessly without solid backing, market inflation skyrockets. However, Musk asserts that this antiquated monetary arithmetic will prove entirely obsolete in the age of AI.
Musk maintains that even if governments distribute funds into digital wallets during the AI era, inflation will not rise because automated factories and robots will manufacture goods at a velocity where supply will never fall short. In the future, individuals will not need to struggle for basic necessities because the primary function of government will simply be to distribute resources created by AI and robotics efficiently among the population.
The World Will Witness an Era of Reverse Inflation
Musk articulated the most fundamental rule of the monetary game, noting that inflation climbs when goods are scarce in the market and people hold surplus cash. When AI and robots combine to multiply the production of goods and amenities a thousand times over, it will not matter how much new currency governments create; the price of every single item will inevitably plummet. Musk's prediction is that the defining challenge of the future will not be inflation, but deflation, characterized by steadily falling prices. This is because the speed at which robots manufacture commodities will outpace any rate at which governments can print notes.
When the market overflows with goods and services to the extent that buyers become scarce, commodity prices will drop day by day. In the contemporary era, we constantly fret over rising costs for fuel, groceries, housing, and transport, but the landscape painted by Musk for 2036 depicts items growing increasingly affordable with every passing day. In this era of deflation, hoarding money will lose its purpose entirely, as manufacturing any item will become so seamless and inexpensive that the rat race for wealth accumulation will cease to exist.
