How does e-mail relate to economics? Well, I've got oneexample. I can tell you how e-mail illustrates an economic principle known asGresham's Law. Gresham's Law says that bad currency drives out good currency.Bad and good? What we mean by bad and good in this sense is good currency is somethinglike gold or silver, something that's based on a metal or some other productthat isn't likely to lose its value. A bad currency in this sense would beeither paper money which could float or say a gold coin that someone hasactually knocked some of the weight out of, so it's not as pure as a regulargold coin. And Gresham's Law says that as more and more of this bad currencyenters the system, what happens is, people take their gold, you know, they taketheir gold coins and they don't use them. They're sitting there in their pocketand they've got a gold coin or maybe a silver coin or a piece of paper to buysomething, they end up using the bad currency because they want to hold on tothat gold coin because it's worth more. It's going to hold its value better.
So what does this have to do with e-mail? Well, let's saywe're not talking about gold here and let's say instead of bad currency, whatwe're talking about is spam. In that case, as the amount of spam has risen,then what tends to happen at least in my case and I think in yours too, is thatI don't send as much real e-mail anymore and people who work with me don't sendas much e-mail because we're just tired of having to sort through all this.We're overwhelmed, and so we're not sending as big a percentage of e-mail as weused to. So what's happening with all these messages? Well, in my opinion,what's happening is that it's going over to IM. It's going over to text-basedmessages. So as it starts to decline in e-mail, I find myself now using IM alot more than I did a year ago, and my son has got a cellular phone, he's usinghis text messaging a lot more than I do and certainly a lot more than he did ayear ago. Anyhow, he never uses his e-mail account anymore.
I suspect though that if con artists and spammers find a wayto, you know, spam IM and text messaging as successfully as they had e-mail,we'll see the same Gresham's curve work over here, the same as Gresham's Lawand we'll have to go somewhere else for other kind of communications. But Ithink it's a pretty good example of how Gresham's Law applies to technology aswell as to money.
