Disruption!

Ultimately, it isn’t resources or ideology that gets you a war — it’s the question of who’s calling the shots. Some would say the US Civil War was all about ideology, whether it be the question of slavery or state’s rights. Others would argue that it was the threatened loss of resources that drove the southern states to secede.

Either way, that clash came down to a shooting war because people on both sides were ready to kill to get their way. Of course, sometimes ideology is all wrapped up in a notion of who should be calling the shots. But that’s really the only “ideological” issue that ever gets you a shooting war. Absent the issue of who gets to run things, ideological issues are settled by other means. As are resource issues.

These technologies will represent a grave threat to many power structures in the world. But they will also enable new power structures — fab labs could give “An Army of One” a whole new meaning.

Unfortunately, I think it has been a while since Burgess took an economics course.

All resources are scarce. The reason the word “abundance” doesn’t occur in Mankiw’s textbook wasn’t because there wasn’t cause for an “economics of abundance” but because the term “scarcity” doesn’t have the meaning in economic terms that it has in the colloquial sense. In economic language, the entire sum of matter, energy, and time in the universe (and any potential other universes beyond to which we ultimately gain access in the distant future) is still a scarce resource. The same holds true in a more qualified sense for space and information, both of which are constantly expanding but nevertheless are fixed at any fixed point in time.

The nanotechnology revolution will change the allocation of scarce resources but will not change the broad outlines of the concept. New resources will become limiting factors and their prices will go up; old resources will become less useful and their prices will go down. The same will hold true of the industries associated with these resources.

For example, even if we produce the perfect nano-assembler, which can truly assemble anything before your eyes, you still need the resources to do so. Something has to power the assembler and the raw materials for the table have to come from somewhere. The design (information) has to come from somewhere as well. The design has no material component and there is no theoretical limit on the amount of potential table designs out there, but at any given point in time, there is a fixed number of total table designs that have yet been conceived of by humanity. This could be an extraordinarily large number and could be increasing at a tremendous rate, but economics will still analyze the availability of such designs under the rubric of “scarcity.” The same will likewise hold true for the energy supply used to power the assemblers; the energy generation capacity of the planet is not infinite, and therefore any energy used to power the assemblers is necessarily not used for something else.

In addition, at any fixed point in time, there will be a fixed amount of nano-assemblers in operation, just as there are a fixed number of factories in operation now even though more are being constructed every day. This means that there will be a fixed amount of production capacity. It will be a number orders of magnitude larger than the current total output capacity of the planet, but it will still be a finite number and therefore a scarce resource. It will be growing as more and more nano-assemblers come online, but it will be fixed at any given point in time.

“Abundance” is simply an illusion. A mirage. It vanishes as you get closer. I’m at home now and don’t have access to JSTOR, but I’ll wager you’ll find no serious economic literature dealing with the concept save a straw man. Burgess’ arguments mirror those made by men at the dawn of the Industrial Revolution: the advent of new technology would render work obsolete, and we would live in a culture of plenty henceforth. Of course, by the standards of a 19th-century sweatshop worker, we do live in a culture of plenty, and even by the standards of a literate 1950′s person, the kinds of things that modern technology is capable of would probably seem almost mystical. However, we don’t think of what we have today as “abundance,” and neither will the people of 2040 or 2060 when we get there.

In short, the parameters of the scarcity equation and the general validity of the theory of economics are not going to be changed by any foreseeable technological revolution, even those of the most optimistic futurists. The only things that will change are the magnitudes of the variables in the equation. As such, Burgess is probably not going to be able to get a great deal of traction using that kind of premise for legislative reform. The concept of scarcity is a priori, not an artifact of the legal system, and there is no awaiting threshold beyond which scarcity can be said to be conquered. One can parallel Burgess’ arguments to the arguments made for forcible, uncompensated redistribution of scarce resources in the modern (compulsory licensing of pharmaceutical patents) and historic (nationalization of factors of production) contexts and analogize fairly easily what’s likely to happen if such measures are attempted in the future.

(Sorry if this shows up as a double post … network error on first try … here goes nothing …)

I think I occupy an intermediate position. Sunlight and dirt are “scarce” in the economic sense. Especially since in the near future they’d be tied to Earth’s surface area. Humanity already intercepts a small but significant of the sunlight that hits the Earth. And dissipating waste heat might become a big problem for dense population centers.

Second, I don’t buy that everyone will have access to molecular engineering just because the technology is developed. It’s probable since there’s a long historyover the millenia of technology rapidly getting out once it is discovered. But there are cases where technology is successfully kept secret for an extended period of time. For example, the Hittites were able to keep secret the technology of iron working for several centuries. Given modern advances in cryptography and intellectual property protection, it’s possible that someone could develope something that wasn’t cracked for a long time.

In response to Karl:

Second, I don’t buy that everyone will have access to molecular engineering just because the technology is developed. It’s probable since there’s a long historyover the millenia of technology rapidly getting out once it is discovered. But there are cases where technology is successfully kept secret for an extended period of time.

More to the point, there are myriad examples in our modern world of billions of people living without technology that we in the developed world take for granted and on which all Western patents have long since expired. There’s not a “long history over millennia” of rapid technological dissemination; that’s an illusion created by history books in which decades or centuries must be summarized in the space of a paragraph. There might be more accurately said to be a short, recent history of rapid technological dissemination in areas of the world (particularly the West and East Asia) where the physical, human, and institutional infrastructure has been built up to facilitate that spread.

Given modern advances in cryptography and intellectual property protection, it’s possible that someone could develope something that wasn’t cracked for a long time.

I’m not sure if advances in cryptography will stop the spread of nanotechnology. For every lock there’s a key, and the same computers that can be used to design encryption schemes can be used to crack them.

However, the notion that nanotechnology will not, initially or ever, be equally enjoyed by all is still nevertheless almost certainly sound. Nothing comes free. This is the fundamental law of economics that Burgess really wants to challenge: the principle that there’s no such thing as a free lunch. That’s a necessary consequence of scarcity, and an immutable reality of the world we live in no matter how much tangible or intangible wealth we produce. Even attempting to challenge that precept smacks of dangerous utopian thinking. (Having Buckminster Fuller cited at me in defense of the Burgess position certainly did not ameliorate that by any stretch of the imagination, BTW.)

Even if nanotechnology, genetics, and robotics converging offered the promise of making everyone a billionaire by today’s standards, that’s nowhere near the same thing as making everyone an “infinity-aire,” which is the empirical result you’d have to achieve to truly declare the end of scarcity. There might be a mass of billionaires, but you would also expect to see an upper echelon of quadrillionaires. This is still an improvement by orders of magnitude over today’s reality, but is in no way a triumph over scarcity any more than the great advances in wealth and production of the industrial and information revolutions were. Improvements on the status quo? Absolutely. Fundamental changes in human civilization? Absolutely again. But triumphs over the law of no free lunches? Not a chance.

Karl suggests:

Also, I think there’s reason to consider abundance as an asymptotic limit as the price goes to zero. For example, if dropping the cost of a good by a large amount (say a factor of ten) does little to increase demand (in other words demand is inelastic to large drops in price) indicates abundance of that good.

If you want to have a definition for “abundance,” that’s probably as good as any. Just remember that inelasticity cuts both ways.

However, while I think that that’s a reasonable definition of “abundance” if we’re going to have one, I still can’t make it mesh with the concept of “abundance” as I read it in Burgess’ article. The nanofab revolution is not going to lead to a world in which the true economic cost of all products and services is zero or asymptotically approaching it. The way I’ve seen it described, and I believe the description on this point to make intuitive sense, is that the materials proportion of economic output will approach zero, while the information component expands correspondingly until it’s basically 100%. However, in the broadest economic terms, materials and information are both part of the “cost” of building a product or providing a service, so I don’t think it’s entirely realistic to expect that the cost of providing all of these different things will go down; rather, we’ll simply be allocating the costs differently.

Burgess does not seem to be thinking in these terms. The moment he starts talking in terms such as “[w]e must incentivize, strongly encourage, or require the broad sharing of the benefits of early-onset molecular manufacturing advances and breakthroughs …,” he’s talking about government confiscation and redistribution of intellectual property, pure and simple, and doing so in a world where disincentivizing the production of information would be civilizational suicide. The “culture of plenty” meme has the same ring now as it did when utopianists of prior eras started talking about society as if we’d already produced all the wealth there was to produce and that therefore the only thing left to do was to start talking about the distribution of existing assets. That kind of philosophy is dangerous and, in its most dangerous form, was responsible for tremendous suffering and loss of human life and potential in the 20th century.

If all Burgess were talking about were simply the growth of technology leading to an ever-increasing ability to do more with less, I’d still be a lurker here. It seems more like he’s interested in using the nanotechnological revolution as an excuse to ignore inconvenient lessons of history, however.