Money won't disappear because of AI: Things that are truly scarce can't be produced by computing power.

As the AI wave sweeps across the globe, a certain trend has quietly gained popularity - when artificial intelligence has pushed productivity to its limit and commodity prices have approached zero, will money come to an end? The answer is no. The existence of money is not due to the inconvenience of exchange, but is rooted in the underlying logic of human economic activities such as scarcity, uncertainty and coordination dilemmas. As long as these logics are not eliminated, money will not disappear.

Peter Earle, a researcher at the American Institute for Economic Research (AIER), recently wrote that AI may significantly reduce the costs of replicable goods and digital services. However, the constraints on a large number of economic activities far exceed the reach of computing power. Land, geographical location, the time of top talents, on-site experiences - these resources are naturally scarce and cannot be replicated. The price mechanism in these areas is not a relic of the past; rather, it is a true reflection of unavoidable limitations.

What is more worthy of attention is that abundance itself tends to magnify the value of scarcity. When AI floods the market with high-quality substitutes, original works, rare collections, and assets with traceability value may actually appreciate in value. At the same time, the expansion of complex systems does not eliminate risks; instead, it gives rise to new forms of risks, thereby generating more insurance, hedging, and credit instruments - and the operation of these functions precisely cannot do without the existence of money as a unit of account.

Scarcity will not be eliminated; it will merely shift.

The productivity revolution driven by AI can lower the prices of a large number of goods, but it cannot reach the core assets in the economic system that are constrained by physics and geography. The supply of land is fixed; the prime locations in New York or Tokyo will not become abundant due to a decrease in construction costs; the geographical proximity of infrastructure, cultural resources and social networks is also exclusive. The existence of such competitive and exclusive goods determines that the market always requires an allocation mechanism, and so far, money remains the most efficient choice.

Time constitutes another layer of incompressible constraints. Even the top surgeons, seasoned litigation lawyers, or highly sought-after performers cannot expand their attention infinitely. Even if AI can enhance individual capabilities, it cannot eliminate the fundamental fact that "a person's time must be allocated among competing uses". Concerts, one-on-one consultations, live events - "being present" itself is a scarce commodity, and the price here functions as an accurate reflection of the real constraints, rather than a friction that can be erased by technology.

Abundance actually raised the premium for "non-replicable" items.

Historical patterns indicate that the cheaper the mass-produced goods are, the higher the premium for scarce items tends to be. Luxury brands, rare collectibles, and certified original works have their value precisely derived from limited supply and traceable origins. Peter Earle points out that if AI floods the market with a large number of high-quality replicas, the value of the original or source items will not decline but may even increase.

Under this logic, the function of money will shift from "measuring the exchange value of ordinary commodities" to "expressing relative preferences for increasingly differentiated scarce forms". In other words, money will not disappear; its role will merely shift from commodities to those areas that cannot be replicated by computing power.

Uncertainty and institutional constraints are the underlying anchors of the existence of money.

The leap in productivity will not eliminate risks; rather, complex and highly coupled systems will give rise to new forms of risks. The explosive growth of goods and services will impose new pressures on resources, time and human capital, thereby generating new demands for insurance, hedging and credit. The effective operation of these functions not only requires a medium of exchange, but also a unified unit of account - and this is precisely one of the core functions of money that cannot be replaced.

The reality at the institutional level also constitutes a structural support for the survival of money. Property rights protection, regulatory approval, access to exclusive networks and enforcement mechanisms all delineate controlled boundaries in economic activities. In a world where output is abundant, the value of trust and verification will only increase. Certification, auditing and reputation systems all rely on some form of monetary unit as the underlying support.

The AI deflationary boom changes the price center, rather than the currency itself.

Peter Earle's core judgment is that the AI-driven deflationary boom might significantly reduce the prices of numerous goods and services, but this will not eliminate the necessity of money; instead, it will shift the focus of prices and calculations to those areas that are non-replicable, subject to capacity constraints, and governed by systems.

Energy costs may have generally decreased, but there are still capacity bottlenecks during peak demand periods; bandwidth and computing power are the same during congested times. Even highly advanced systems must allocate limited resources among competing uses, and monetary prices remain by far the most efficient allocation tool. Once they are absent, queuing, rationing, and administrative directives will take their place - these methods do not eliminate scarcity; they merely deal with it in a less transparent manner.

Money will not disappear in the face of abundance. It merely follows scarcity, wherever it emerges.

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