Currency will not disappear because of AI: truly scarce things cannot be created by computing power.

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As the AI wave sweeps across the globe, a certain argument is quietly gaining traction—when artificial intelligence pushes productivity to the extreme and commodity prices approach zero, will money come to an end? The answer is no. The existence of money does not originate from inconvenience in exchange, but is rooted in the underlying logic of scarcity, uncertainty, and coordination dilemmas in human economic activity. 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 while AI may dramatically lower the costs of replicable goods and digital services, a vast array of economic activities are constrained well beyond what computing power can touch. Land, geographic location, top talent’s time, onsite experiences—these resources are inherently scarce and cannot be replicated. The price mechanism in these domains is not a historical relic, but a true reflection of unavoidable constraints.

More noteworthy is that abundance itself often amplifies the value of scarcity. When AI inundates the market with high-quality substitutes, originals, rare collectibles, and assets with provenance value may increase in value instead. Meanwhile, the expansion of complex systems does not eliminate risk, but spawns new forms of risk, which in turn gives rise to more insurance, hedging, and credit tools—functions whose operation precisely depends on the existence of money as a unit of account.

Scarcity will not be eliminated, only transferred

The AI-driven productivity revolution can lower the prices of many goods, but it cannot reach core assets in the economic system that are constrained by physical and geographic factors. Land supply is fixed, and the prime locations of New York or Tokyo will not become abundant just because construction costs fall; infrastructure, cultural resources, and social networks’ geographic proximity are similarly exclusive. The existence of such competitive, excludable goods determines that markets always need a distribution mechanism, and money remains the most efficient choice so far.

Time constitutes another layer of non-compressible constraint. Top surgeons, seasoned litigation lawyers, or sought-after performers—no matter what, their attention can't be extended infinitely. Even if AI could augment personal capabilities, it cannot erase the basic 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 price here truly reflects real constraints, not friction that can be erased by technology.

Abundance instead raises the premium of "non-replicable" goods

Historical patterns show that the cheaper mass-market goods become, the higher the premium often is for scarce items. Luxury brands, rare collectibles, and authenticated originals derive their value from limited supply and traceable provenance. Peter Earle points out that if AI floods the market with high-quality imitations, the value of originals or source items may not decline but instead rise.

Within this logic, the function of money will shift from "measuring the exchange value of ordinary goods" to "expressing relative preferences for ever-more differentiated forms of scarcity." In other words, money will not disappear; it will merely shift its stage from bulk commodities to domains that computing power cannot replicate.

Uncertainty and institutional constraints are the deep anchors for the existence of money

The leap in productivity does not eliminate risk; instead, complex and highly coupled systems spawn new forms of risk. The explosive growth of goods and services will put new pressure on resources, time, and human capital, giving rise to new insurance, hedging, and credit needs. For these functions to operate effectively, there is a need not just for a medium of exchange, but for a unified unit of account—one of the irreplaceable core functions of money.

Institutional realities equally form a structural support for the survival of money. Property rights protection, regulatory approval, access to exclusive networks, and enforcement mechanisms all define controlled boundaries in economic activities. In a world of overflowing output, the value of trust and verification only rises. Certification, auditing, and reputation systems all rely on some form of monetary unit as foundational support.

The AI-driven deflationary boom changes the center of pricing, not money itself

Peter Earle’s core judgment is: The AI-driven deflationary boom may sharply compress prices for many goods and services, but this will not end the necessity of money. It will simply shift the focus of pricing and calculation to areas that are non-replicable, capacity-constrained, and institutionally limited.

Energy costs may overall decline, but at peak demand periods, capacity bottlenecks still appear; bandwidth and computing power face the same issue during congestion. Even the most advanced systems must allocate finite resources among competing uses, and monetary prices remain the most efficient allocation tool to date. Without them, queues, rationing, and administrative orders would take their place—but these methods do not eliminate scarcity, simply deal with it in a more opaque manner.

Money will not vanish in the face of abundance. It simply follows scarcity, wherever it may emerge.

Risk Warning and DisclaimerThe market has risks; investment requires caution. This article does not constitute personal investment advice, nor does it take into account the specific investment goals, financial situation, or needs of individual users. Users should consider whether any opinions, viewpoints, or conclusions in this article are suitable for their particular circumstances. Investment is at your own risk. ```