Re: Economics


Don Geddis wrote:
"Duncan Rose" <duncan.rose@xxxxxxxxxxxxxxxx> wrote on 26 Jul 2006 13:1:
As a thought experiment, perhaps we could consider where we'll be
assuming that AI is a solved problem, and robots with capabilities
exceeding our own actually exist -- who then will own the wealth?
[...]
Will we have the will and the ability to change the way we distribute and
measure wealth in our societies at such a time, once all 'work' is
performed by automatons?
[...]
at some point it seems likely we'll have to totally reevaluate our ideas of
what has worth and what does not

Economics is about allocation of scarce resources, where more people want a
thing than there is of that thing. (It's also about incentives, and how they
change human "free will" behavior.) Economics doesn't really deal with goods
that aren't scarce, like sunlight or breathable air.

If robots can grow all the food that anyone wants, and supply all the power,
then those things will no longer have a cost (just like sunlight and air), and
anyone can use as much as they want of any of it.

In the EU, we have these things called food mountains (or wine lakes);
this is where producers of these goods have been paid to produce, but
have overproduced so the surplus is stored in warehouses. Very large
warehouses.

The citizenry of the EU pay taxes to fund this production, and pay
inflated prices for food (since there's an overproduction, surely the
price should drop, no?). The food is eventually sold off on the world
market at less than it costs to purchase from within the EU.

I think the EU at least is already in a position where the cost (to the
consumer) of food could be reduced. Not to free, but certainly below
its current cost. Strange it is, then, that the costs to the consumer
are NOT falling.

At the same time manufacturer's of genetically modified seed are
dumping seeds leading to infertile crops on 3rd world producers; this
means that those producers must forever return to those manufacturers
for seed, since any harvested seed will not grow -- the world may have
an unrealised capacity to provide ample food at least for all, but 'the
rich' have a vested interest in preventing this from happening ("hey,
we could make ourselves even richer off these bums by preventing them
from enrichening themselves! It'll cost us in the short term, but in 20
years time, we'll win big! Suckers!")

I put it to you that many of the 'scarce resources' we find in our
societies are 'artificially scarce'; it benefits the owners of those
items to maintain their scarcity (consider DeBeers as another example).

I therefore dispute this notion that once the costs of production of
any given thing reach zero, that those things *will* become free
(though *not* the Economic principle that they could (should?)). The
people who control that production appear to have little interest in
seeing these things become valueless.

(Of course, my examples are very convenient and may even form a closed
set. I don't know enough to be sure, but it seems to be the aim of all
commercial enterprises to effectively put themselves in the position of
being a sole producer in order to control the market and prevent others
profiting -- I just thought of another example, that of the oil
producers who sell themselves their own oil at market rates (i.e.
indepent of their costs of production) so that they can pass those
price increases on to their customers. Very noble of them, that.).


If we can do that in the future there's no reason we can't be putting the
framework in place for doing it NOW (i.e. starting a process of redefining
what society considers to be worth rewarding).

The reason we can't do it now is that those items today DO have a cost, and
more people desire them than human society can provide. That's why the field
of economics exists in the first place: because there must be SOME methodology
to assign people to the things they want, if there isn't enough for everyone
to have all that they dream of.


See above. The methodology may well be broken (in my opinion).

-Duncan

-- Don
_______________________________________________________________________________
Don Geddis http://don.geddis.org/ don@xxxxxxxxxx
One of the most attractive features of a Connection Machine is the array of
blinking lights on the faces of its cabinet.
-- CM Paris Ref. Manual, v6.0, p48.

.

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