## From Money to Data

## Source details

**Canonical URL:** [From Money to Data](https://www.imf.org/-/media/files/publications/fandd/article/2018/march/book2.pdf)

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### Core thesis of the book
- Data are not the new oil but a form of capital much like human, social, and intellectual capital.
- Data are becoming the dominant organizing principle for wealth creation; markets evolve into platforms enabling new data-rich products, services, and experiences.
- The authors argue that money’s role will erode: “(r)ather than equating markets with money and the economy with finance capitalism in which money rules supreme, markets will be understood to surge because of rich data flows (not money). Finance capitalism will be as old-fashioned as Flower Power.”
- In data-rich markets, price may cease to be the primary conveyor of information: “In data-rich markets, participants no longer use price as the primary conveyor of information...one of the central tasks that money has played in the economy will be gone.”

### Mechanisms and economic implications described
- Big data accelerates creative destruction of existing capitalist forms as data volumes reach petabyte proportions and processing power continues exponential growth.
- Reduced transaction and coordination costs (drawing on Ronald Coase) are expected to lead to new organizational forms.
- Machine-learned matching and recommendation algorithms (drawing on Alvin Roth) will deliver superior investment and consumption outcomes.
- Algorithmic management of human limitations (drawing on Herbert Simon and Daniel Kahneman) will involve bots nudging people’s actions.
- The authors present an optimistic view: rich data should lead to richer—and more efficient—societies; the book is described as “more upbeat than cautionary.”

### Regulatory and governance proposals
- The authors favor governance over government and celebrate markets: “Eliminate the decentralized market and the empowering quality of data vanishes,” they declare.
- Key regulatory questions the book raises:
  - How should data be shared to stimulate greater competition, innovation, and entrepreneurship?
  - Can greater transparency be structured to facilitate greater accountability?
- The authors propose rethinking data access to regulate data-dominant oligopolies; if firms cannot answer these questions, regulators and legislators will likely intervene.

### Criticisms and limitations highlighted by the reviewer
- The book displays an “overweening Western bias.”
- Coverage of Chinese, Indian, and African ontologies is only perfunctory.
- The authors do not explore possible global clashes of big data’s economic and commercial cultures, which undermines their optimism and “cheat[s] the serious reader.”
- The reviewer emphasizes that if future wealth, growth, and living standards depend on data-ism, it will be “as much a source of rivalry and competition as collaboration and trade.”

### Key publication facts and attribution
- Reviewer: MICHAEL D. SCHRAGE, research fellow, MIT Sloan School Initiative on the Digital Economy
- Book: Viktor Mayer-Schönberger and Thomas Ramge, Reinventing Capitalism in the Age of Big Data
- Publisher details: Basic Books, New York, 2018, 288 pp., $28
- Publication: FINANCE & DEVELOPMENT | March 2018, page 58

*Source: book2 (PDF chapter/section)*

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_Source: https://www.imf.org/-/media/files/publications/fandd/article/2018/march/book2.pdf_