The Economy Of Plenty by Eliezer Yudkowsky

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  1. The Economy Of Plenty (Was: Free-Markets)
  3. Eliezer S. Yudkowsky (
  4. Wed, 10 Sep 1997 19:45:00 -0500
  5. Messages sorted by: [ date ][ thread ][ subject ][ author ]
  6. Next message: Dan Clemmensen: "Re: *Now* we might get somewhere!"
  7. Previous message: Hagbard Celine: "[Fwd: Re: >H Information exchange in food chains]"
  8. I don't think I liked the way Holly Pearson phrased the issues involved. His
  9. impending economic collapse seemed too much like a social conflict, not a
  10. blind consequence of increasing technology. There may be winners and losers,
  11. but they are irrelevant and unintentional. Like most technological
  12. consequences, it is not in the least inevitable; it only takes more technology
  13. to counter.
  14. Our economy will either collapse or transform. *Which* will depend on whether
  15. we're smart enough, and flexible enough, to redesign it along the necessary lines.
  16. I have had thoughts along those lines, and they shone through in "Staring Into
  17. The Singularity". Hence the quote, I suppose.
  18. From "The Economy Of Plenty", an unfinished work: (1997 by Eliezer
  19. S. Yudkowsky.)
  20. -- The Economy of Plenty --
  21. The basic problem is economies of scale. At our level of technology, it only
  22. takes a billion people working to support six billion. And then the other
  23. five billion starve, and you start over with one billion and two hundred
  24. million, until you've got a self-supporting community of ten million people
  25. and the six billion are dead.
  26. There are four obvious solutions. First, give everyone a Universal Standard
  27. Wage. Second, break up humanity into units of ten million and forbid resource
  28. transfers between them. Three, raise the standard of living until there's
  29. enough work for everyone. Four, distribute the work more evenly.
  30. Solution one: In essence, this amounts to dividing humanity into workers and
  31. drones. It differs from Communism in that in Communism, everyone was supposed
  32. to work and nobody did, while here, only a few people will be supposed to
  33. work. I don't think this solution, or any other which involves dividing
  34. humanity, will be stable. The class conflict will destroy it, and the "Why
  35. should *I* work?" problem will still be present.
  36. How to make it work: Instead of dividing humanity, abolish *all* work. Go
  37. the rest of the way from one billion supporting six billion to zero supporting
  38. six billion. Build arcologies which require only a few thousand people,
  39. *total*, to sustain the entire planet at a minimal standard of living. Then
  40. paste the current economy on top of that. If this is stable, the rate of
  41. progress to Singularity will slow down, but we'll have all the time necessary
  42. to get it right the first time.
  43. Solution two: Partition humanity into six hundred economies. This will
  44. falter on limited resources, brains as well as arable land, of which we have
  45. enough to support five or even twenty economies, but not hundreds. For this
  46. planet to support six billion, we need technological economies of scale.
  47. How to make it work: I don't know yet.
  48. Solution three: Raise the standard of living. Why hasn't this happened
  49. already? That is, how can we be running out of work when people are still
  50. poor and hungry? The answer is that these people are unemployed, hence do not
  51. have any money, hence cannot pay for supplies, and hence do not add to demand.
  52. First let's see us raise the demand to match the current supply, much less
  53. the supply available if everyone worked!
  54. How to make it work: This gets kind of complicated, and requires massive
  55. computing power. Essentially, you have to get rid of money and replace it
  56. with a barter system. We *can* do this now because we have enough computing
  57. power to institute "complex barter" systems. This takes some explaining. A
  58. simple barter transaction is one in which A gives B a pineapple, and B gives A a
  59. coconut. A complex barter is where A gives B a pineapple, B gives C a
  60. coconut, and C gives A a watermelon. Note the triple cycle. Complex barter
  61. is too hard to keep track of - without computers, heh heh heh - which is why
  62. we have money, to transform every transaction into a simple barter. By
  63. "money", we here mean something with artificial value, rather than universal
  64. units of exchange. A complex barter system can still have standardized units
  65. of valuation.
  66. What would be accomplished by this? Well, one of the economic design flaws
  67. leading to our current problem is - more than I can finish this sentence with.
  68. Here's what happens. Person A, who builds widgets, builds 100 widgets. B
  69. through K also build 100 widgets. Unfortunately, there is only a market for
  70. 1,000 widgets total. But 1,100 have been built.
  71. The standard capitalistic reply at this point is that G, who isn't very good
  72. at this, goes out of business. There are only two problems: First, G can't
  73. get another job, and more importantly, that's NOT what actually happens!
  74. Instead, the price of widgets drops. Like a brick. They trade widgets for
  75. cigar bands on a one-to-one basis. The result is that not even E, who's the
  76. best, can make a living - much less G.
  77. In an ideal world, this overproduction would simply raise standards of living.
  78. Really. Think about it. There are more widgets for everyone! Hooray!
  79. Again, ideally, food would be overproduced. So the price of food would drop
  80. as well. The price of everything would drop, and widgets would be dirt cheap,
  81. but so would be everything else, and A and E and G and K would all be rich.
  82. The problem is that production of food is out of sync with production of
  83. widgets. The current economy was BUILT ON SCARCITY. Everyone, everything, is
  84. centered on the idea that supply is always slightly less than demand. If one
  85. - and only one - field shifts to a massive-supply model, that field suffers.
  86. It's like being the only cooperator in a world of defectors. You need a
  87. massive shift.
  88. And again, the existence of money is the problem. Not private property! I'm
  89. not saying that. The problem is money instead of barter. See, in a barter
  90. system, you can establish valuations that can outlast supply and demand, or at
  91. least weather the turbulence created by switching to an Economy of Plenty.
  92. Suppose that we declare one widget to equal one hamburger in value. Now, even
  93. if there are too many widgets, anyone who's made a widget can still get a
  94. hamburger in exchange. G's widgets might rot, but that's better than all the
  95. widgets rotting. We'll assume, actually, the existence of some buffer, some
  96. temporary charitable system, so that G remains in business for at least a
  97. month or two - while the production of hamburgers increases also.
  98. We can also move up to establish a futures market - even better than barter -
  99. for absolutely everything on the planet. Then even G's widgets don't rot.
  100. Instead, everyone sells 91 widgets instead of 100 - which may sound bad, but
  101. that's on a G-just-went-into-business model. If you assume a technological
  102. overproduction, 91 widgets is just what they sold last year. It's
  103. technological overproduction that's the problem, after all - population
  104. expansion is self-correcting. So everyone has an extra 9 widgets to trade for
  105. whatever they want. Hopefully, someone besides widget-makers is
  106. overproducing, so the surplus can all be traded around.
  107. Eventually, everyone overproduces, and those who produce the most wind up with
  108. the most of the overproduction. So the system has two parts, really: One, a
  109. futures market (applied to EVERYTHING) so that overproduction doesn't cause
  110. prices to drop, and two, a complex barter system - whose necessity is kind of
  111. hard to put into words, but... The value of a dollar is arbitrary. If a
  112. widget-future involves $5 a widget, the value of the contract is affected by
  113. fluctuations in the money supply as well as the supply of widgets. A
  114. widget-future which involves trading one hundred hamburgers for one hundred
  115. widgets may fluctuate all over the place in THEORY, but in practice, one
  116. hundred hamburgers are what the widget-maker will eat this year. In other
  117. words, the universal futures economy is very vulnerable to inflation, which a
  118. complex-barter system will stop.
  119. Solution four: Distribute the work more evenly. How can I say that we're
  120. running out of work, when everyone WITH a job is spending every waking hour on
  121. their job? The problem is that ***
  122. [End of work in progress.]
  123. To summarize #4, you'd need to entirely revamp the structure of a corporation
  124. along certain lines. This would be even more complex than the complex-barter
  125. bit, which itself should really have diagrams. The solution to number four
  126. requires complex barter as a *prerequisite*, and something called
  127. collaborative filtering, and even substantial alterations to American law.
  128. Anyway, that's why I stopped there - I wasn't sure I had it all worked out.
  129. --
  130. Eliezer S. Yudkowsky
  133. Disclaimer: Unless otherwise specified, I'm not telling you
  134. everything I think I know.
  135. Next message: Dan Clemmensen: "Re: *Now* we might get somewhere!"
  136. Previous message: Hagbard Celine: "[Fwd: Re: >H Information exchange in food chains]"
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