I agree about the money not equaling wealth, but please explain the part about the overhead of money not being worth while.
Money has value because we can receive it in return for value we've created (a sort of universal value system), and transform it into another form of value or wealth. I don't see how it could ever get to the point where it's not worth having a universal medium of wealth. If it did get to that point, we'd have to resort to bartering. The only alternative is to have EVERYTHING be free - not just information products, but physical products, like cars, houses, and services. And if communist countries are any clue, this isn't the best way to do things.
This definitely can't happen with material objects. I'd say things are different in the information realm, though.
The faster, more fine grained, and more dynamic a system is, the less money makes sense, since the cost of managing the money comes closer to the value of the money being managed.
It seems like this logic is self-defeating. How can the cost of managing money remain the same if all other electronic products and services are going down?
So how would you spend this hypothetical wealth? The abstract concept of money is what allows the development of a highly specialized economy. Greater specialization leads to greater productivity, and hence increased wealth.
Also, on your specialization point, there is great value found in integration. I don't know if you are a _n_x programmer, but the level of integration among all the specialized tools makes it a much more valuable system (at least for a programmer) than a balkanized Microsoft box.
You also see this realization in the current trend of Services Oriented Architectures, which is basically the UNIX philosophy writ large.
Spending is a misnomer. If the things you would spend your money on are part of the very system of wealth you contribute to, then you don't need money. This is what we're seeing with the web.
I don't understand your point. Are you talking about some sort of digital bartering system? And what exactly is the "overhead" of using money (I hope you aren't referring to the fact that it has to be earned)?
No, the overhead is in the charging and tracking of money. If your system is dynamic and fine grained enough, then it can cost just as much to maintain the financial representation of what is happening as the event itself. Thus, you don't really make anything.
A very hypothetical example: say you have millions of simultaneous users all over the world who are constantly, but unpredictably, using your web service. The value of all these people using your service together is very high. However, since people use the service irregularly, charging them a significant amount would make it not worthwhile for them to use your system, and you lose your crowd. On the other hand, the amount that you could reasonably charge them is so small that it would only cover the cost of transaction, and would make the psychological overhead great enough that you would again lose your crowd. So, overall, it is best to not charge anything, and instead extract value in other ways, such as demographic information mining.
"If the things you would spend your money on are part of the very system of wealth you contribute to, then you don't need money."
Better to talk about currency than money. You are right, its place is where what you want to consume and what you (want to) produce are different goods. I don't see why the web would change that basic principle. You may contribute your expertise to Hacker News, an open source project and a couple of Wikipedia pages. But surely you don't want to consume only your own products. But maybe the producers of your desired "goods" (whether purely informational bits and bytes or real physical apples or oranges) derive no direct benefit from your aforementioned products. You will necessarily arrive at some medium, whether you call it credits or miles or dollars.
Yeah, people tried and try it all the time. Then they arrive at some imaginary medium/currency other than "money". Only, if it's a medium for exchanging goods or services, it ends up being money no matter what it is called. And if you try to get rid of a medium altogether (one-to-one bartering), you end up with a vastly less attractive market exchange.
Money isn't really wealth, money is just a representation of wealth. At some point, the overhead of using money will not be worthwhile.