Macro Perspective | When AI Starts Producing: The End of Currency and the Rise of Reputation
- FOFA
- Dec 6, 2025
- 5 min read
Imagine a world where AI and robots have taken over all tasks, from farming and manufacturing to transportation and medical diagnosis. Material wealth is vastly abundant, and daily necessities are nearly free. In such a "post-scarcity era," does the "currency" as we know it today still hold any significance?
The birth of currency originated from "scarcity" and the "need for exchange." However, when the productivity of AI becomes powerful enough to eradicate material scarcity, the cornerstone supporting the value of currency begins to shake. When the production costs of bread, housing, and automobiles approach zero, their prices will also approach zero. Under these circumstances, pricing and allocating these resources in US Dollars or Renminbi becomes meaningless.
Productivity is the ultimate source of economic value. Currency is the measure of value and the medium of exchange. Credit is an advance on future productivity and value. A healthy relationship operates as follows: credit expansion guides resources toward areas that can enhance future productivity, thereby creating more real value. This value then supports and repays the credit, forming a virtuous cycle. Conversely, it leads to bubbles and crises.
1. Productivity → Value
Productivity is the Foundation: Productivity (the combined efficiency of labor, technology, capital, and resources) determines the total volume of goods and services a society can create. This is the material basis for social wealth and real economic value.
The Subjective and Objective Nature of Value: Value contains subjective components (utility value theory), but it must be anchored in objective productivity. Without production, there is no object available for evaluation.
2. Value → Currency
Currency as a Scale and Carrier of Value: To facilitate exchange, society requires a common scale of value. Currency emerged to fill this role; it may possess intrinsic value itself (like gold) or be endowed with value through state power and social consensus (fiat currency).
Currency is a "Unit of Account" and "Store of Value": It allows the value of different types of goods and services to be quantified, compared, and stored. At this stage, value is "represented" by currency. What we commonly refer to as "price" is the monetary manifestation of value.
3. Currency → Credit
Credit is an Extension of Currency: Credit is essentially "future money" or a "claim on future money." When you obtain a loan, you do not receive new physical goods; rather, you receive immediately usable purchasing power (currency) based on a promise to repay with your future production and income (value).
Credit Creates Currency: Under the modern fractional reserve banking system, the majority of broad money (such as M2) is actually created through the process of banks issuing loans (creating credit). When a bank issues a loan, it creates a deposit (currency) in the borrower's account.
4. The Dynamic Interaction of Credit, Currency, and Productivity (The Crux of the Matter)
This is the most complex and critical part of the relationship. Credit can serve as a powerful catalyst for productivity, or it can become a source of instability.
A. The Virtuous Cycle: Credit Boosts Productivity
Capital Formation: An entrepreneur has an idea that can enhance productivity (e.g., inventing a new machine) but lacks sufficient existing currency (savings). They apply for a loan from a bank (obtaining credit).
Resource Allocation: This credit grants them the ability to purchase resources (steel, labor), guiding societal resources from the consumption sector to the investment sector.
Value Creation: The new machine is built, production efficiency improves, total social output (GDP) increases, and new real value is created.
Debt Repayment and Value Realization: The entrepreneur generates income (currency) by selling the newly produced goods and repays the bank loan (credit). At this point, expected future value has been transformed into current reality through the bridge of credit, and the currency is ultimately recaptured.
In this cycle, credit expansion (increased debt) is accompanied by rising productivity and the growth of real wealth; the repayment of debt is supported by real value.
B. The Vicious Cycle: Credit Detaches from Productivity
Speculative Lending: If credit is not used for investments that improve productivity but is instead used to speculate on existing assets (such as real estate or stocks), the situation changes.
Asset Bubbles: A large amount of credit/currency chases a limited supply of assets, driving up prices and forming bubbles. In this scenario, rising asset prices do not represent a synchronous growth in societal real wealth (productivity).
Divergence of Value: The growth rate of currency and credit far exceeds that of the real economy, causing the "purchasing power" of currency to be diluted (i.e., inflation). The value represented by currency diverges from the real productivity value backing it.
Crisis and Recession: When the bubble bursts and asset prices crash, a massive amount of credit becomes unrecoverable (because there is not enough real value behind it to support it). This leads to bad bank debts, a credit crunch, and an inability for enterprises to secure loans even for good projects, ultimately damaging productivity and plunging the economy into recession.
Real-World Examples
The 2008 Global Financial Crisis: Credit was massively abused for high-risk subprime mortgages and complex financial derivatives. This credit was not backed by stable future income growth (value), but by fragile chains of debt and excessively high expectations for housing prices. When the underlying repayment ability (value creation capability) collapsed, the entire edifice of credit toppled.
China's Economic Rise: Over the past few decades, large-scale infrastructure investment and industrialization driven by bank credit channeled resources into areas that drastically improved productivity (high-speed rail, highways, factories), thereby supporting rapid economic growth and value creation. However, credit expansion in certain sectors has simultaneously led to real estate bubbles and debt risks.
5. When AI Transforms Human Productivity, What Will Replace Currency?
The answer may be a system of "Contribution Points" or "Reputation Tokens." The economic system of the future will no longer incentivize "production," but rather "creation," "discovery," and "care."
From "Purchasing Power" to "Influence": You cannot use "Contribution Points" to buy air (because it is free), but you can use them to obtain residency in a prime seaside location, secure the assistance of top AI scientists for research, or gain voting rights on the direction of community development. The essence of this new "currency" is the quantification of an individual's social value and creativity.
AI is the Producer, Humans are the Definers: AI is responsible for fulfilling society's material needs, while humans are responsible for defining what constitutes "value," "beauty," and "meaning." You earn "points" for solving a scientific puzzle, composing a poem that touches the heart, or providing exceptional service to the community. This economic system pushes human activity to a higher level.
In an AI-driven future, we may witness the demise of currency. But this is not the end of the economy; rather, it is the beginning of a new era—shifting from a system centered on "material allocation" to one centered on "meaning and influence." The "currency" of that time will no longer be cold numbers, but a warm reflection of our human spirit and creativity.
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