Disruption!

By | May 10, 2006

Steve Burgess has written an interesting essay for KurzweilAI on “The (Needed) New Economics of Abundance.” You’ll want to read the whole thing.

I agree with Burgess that personal manufacturing (first by fab labs, later by molecular manufacturing) will bring incredible abundance. I also agree that this abundance will be very disruptive to society as it is organized today. I don’t think that fact, as Burgess argues, is going to necessitate incentives on the part of existing business to allow these technologies to be adopted.

Today’s retailers and manufacturers will have as much success in stopping the trend toward personal manufacturing as record companies have had in stopping the rise of digital media outlets like iTunes. Which is: no success at all.

Even if Congress were to outlaw personal manufacturing completely – not a popular move – it would be embraced legally elsewhere and illegally here anyway. It’s far too powerful of a force to stop or even slow effectively.

Burgess adds:

War is largely fought over scarce resources. Widespread wealth (through universal distribution of PNs) would remove the apparent fuel for most wars.

Well, most wars are fought over resources. Many wars, including the war that we are currently fighting, is over ideology – competing views of how the world should work. The September 11 highjackers weren’t poor or down and out. They were, for the most part, middle-class. It wasn’t a lack of material possessions that fueled their rage – it was a viral ideology.

Perhaps the societies that have succumbed to this viral meme would improve with universal wealth. If the populations that currently produce terrorists get busy loving the good life, maybe their desire to kill infidels will slack off. I certainly hope so.

The problem is whether wealth from personal manufacturing would be universal – or limited to those already in power. Oil wealth hasn’t been widely distributed in Muslim countries. Can we expect a better distribution of wealth from personal manufacturing?

We have reason to be optimistic. Oil requires massive infrastructure that is easily controlled by a central bureaucracy. But if you let a single self-replicating fab lab get smuggled into the Kingdom, the kleptocracy is over.

UPDATE: Don’t miss Will Brown’s response at The Warrior Class Blog.

  • https://www.blog.speculist.com Phil Bowermaster

    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.

  • http://www.technoeventhorizon.blogspot.com Micah Glasser

    Information wants to be free.

    One point about ideology vs. scarcity. These two are different sides of the same coin. It would seem that all cultures embrace a common ideology and that ideology-memeset-culture is transferable and subject to evolution. Also various cultures give birth to various kinds of political and economic systems and these systems in turn determine what kind of technological means of production will be developed, and the state of technological means of production determines level of scarcity.
    So essentially we invaded Iraq to plant and spread memes that will develop into a culture that supports a political and economic system that is capable of creating technological means of production which will in turn reduce the amount of scarcity in Iraq and, hopefully, help to stabilize the entire region.

  • Gramarye

    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 …)

  • http://www.technoeventhorizon.blogspot.com Micah Glasser

    In response to Gramarye:
    I couldn’t disagree more with your position and I would like to address some of your arguments.

    “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.”

    This is a metaphysical/cosmological presupposition which is a mere assertion based on no argument. It is quite possible that their is an infinite ‘supply’ of space, time, matter and energy existing in an eternally regenerative cosmos (Read Buckminster Fuller). Beyond that unfounded statement however, the point is really quite moot. Scarcity is a relative term. Something is scarce if there is not enough of it to satisfy everyone.

    “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.”

    I have to wonder if you actually understand the full consequences of molecular manufacturing. Nanofactories are capable of self-replication, therefore they will become almost instantly accessible to everyone on the planet. Once everyone has a nanofactory that is powered by the sun and fed with mere dirt any “new resource” will cost nothing whatsoever but dirt and sunlight – which is free to all. Sounds to me like the concept of scarcity based economics just got altered.

    “In addition, at any fixed point in time, there will be a fixed amount of nanoassemblers 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 nanoassemblers come online, but it will be fixed at any given point in time.”

    Once the economic infrastructure is coordinated by AI and facilitated by molecular manufacturing the very concept of “production capacity” will become obsolete. This state of affairs is known as a technological-economic singularity. The question is not whether or not this techno-economic infrastructure will be able to produce fast enough to bring about a state of “abundance” but rather the question is whether or not this state of affairs will destroy us and how we should be preparing for this eventuality.

    Once again I would highly recommend Buckminster Fuller’s “The Critical Path”. This book addresses all of these issues and the arguments put forth are compelling.

  • Karl Hallowell

    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.

  • http://www.artofwarplus.com/wordpress/ Will Brown

    Part of the problem here is that Steve Burgess seems anxious to gear up for a war no-one is declaring. Added to that, he also wants to fight it on the “enemy’s” chosen ground – using the terms and conventions of those he regards as opposition.

    Which leads to an observation; we seem to have encountered a disconnect in the accepted meaning of words and expressions. Economists express concepts in their disipline’s terminology which has unconventional preconceptions. Such as: all resources are finite on some scale of measure so all resources are scarce (probably a better description would be “subject to conditions of scarcity”). Under that metric, abundance isn’t a concept for consideration except possibly as an expression of local economic fluctuation of availability (he blissfully opines).

    We’re talking about personal independence from individual scarcity. Economic science as presently structured isn’t scaled to that level of perspective as best I can tell.

  • Gramarye

    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 Hallowell

    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.

    As I said before, I occupy an intermediate position. There is indeed a long history of the spread of technology. Rather, the main problem here seems to be a lack of infrastructure to take advantage of technology. There’s a lot of examples of countries and groups successfully and rapidly obtaining technology and the necessary infrastructure from other parts of the world.

    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.

  • Gramarye

    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.