A Resource Based Economy

[ElectricMucus]

You guys are arguing in circles.

Is air scarce? There is only a limited amount of it but still there is enough air available for everybody.

Air is not only abundant, it is everywhere people need it. Except underwater. And in tires. And hey! They charge for filling up scuba tanks and tires, don't they? And using the Economics definition, yes, air is scarce. The same air which I am currently breathing cannot at the same time be used by you. Should we attempt to do so, we would both die.

That's not just air you are talking about. It's compressed air which underlies fundamentally different economic principles.
I was just talking about air.


Oh and it is possible to live in a society where certain things are without cost. (No I am not talking about an unlimited supply you nit-picker). It's just that you couldn't stand to live in it with your current mindset, but that's ok. To translate it into your language: Charity on a individual basis.

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[myrkul]

You guys are arguing in circles.

Is air scarce? There is only a limited amount of it but still there is enough air available for everybody.

Air is not only abundant, it is everywhere people need it. Except underwater. And in tires. And hey! They charge for filling up scuba tanks and tires, don't they? And using the Economics definition, yes, air is scarce. The same air which I am currently breathing cannot at the same time be used by you. Should we attempt to do so, we would both die.

That's not just air you are talking about. It's compressed air which underlies fundamentally different economic principles.
I was just talking about air.

As was I.

The same air which I am currently breathing cannot at the same time be used by you. Should we attempt to do so, we would both die.

That it is both in great supply and found pretty much everywhere does not make it without cost. It might make it difficult (if not impossible) to set a price on, but certainly if we get enough humans all trying to breathe the same air, we'll run into a shortage, which is a common problem for unpriced goods. (Oh, and might I add: http://en.wikipedia.org/wiki/Oxygen_bar )

Oh and it is possible to live in a society where certain things are without cost. (No I am not talking about an unlimited supply you nit-picker). It's just that you couldn't stand to live in it with your current mindset, but that's ok. To translate it into your language: Charity on a individual basis.

Once again, that's price, not cost. Even a "gift economy" still has to deal with the costs associated with producing and transporting things.

[ElectricMucus]

Good than it is price, you really wanna argue about semantics here?

The core point here is: Given sufficiently low costs for fundamental goods a gift economy is possible and can be more efficient than what we currently have.

[grondilu]

"price" is defined as the number of some market element (typically money) which must be exchanged in order to get the item in return. Perhaps you are equating "unpriced" with "undefined" (the mathematic term), but in the sense we are speaking of, "unpriced" and "0 price" are the same.

Yeah except that when something is "0 price", I, like many people on this planet, say it is free.  Not unpriced.

No, the boat is not free. It cost you a house. Or several statues. Or toothpicks. Et Cetera, Et Cetera. https://en.wikipedia.org/wiki/Opportunity_cost

I don't know this notion well, but from what I see, it seems far fetched.  Sure, it costs me some time (during which I could have done stuff), but just as much time as if I had stayed sited doing nothing.  To me if something costs the same thing as if nothing happened, it pretty much means it costed nothing.

If your robot did it, it also cost you the energy it took to run your robot, and the robot itself cost a considerable amount of energy to make.  Again, you make the mistake of seeing only the price tag, and ignoring the greater truth: that nothing, even if given away without price, is not free. Everything has a cost.

Energy itself can be free.  It comes from the sun and the sun doesn't ask me any payment.

Sure, I need an energy conversion device to convert the solar radiation into usable energy, so you're going to tell me that this energy has a cost.  It's just not true.  The cost of the production unit is fixed, but the amount of energy it can produce it proportional with time.  And a production unit can make other production unit.  What's the cost of a production unit if it has been created by an other production unit?  Tell me exactly how you calculate that.   I think you can't, or that if you try, you'll come to realize that it will tend to zero.  So to me, energy can perfectly be free.

price ≠ cost. The recognition that everything has a cost is what creates the price system in the first place.

Cost is neither a necessary nor sufficient condition for a price.  Things can be very expensive to build and yet nobody will want to buy them (because the people who build them were just wrong about what the market wanted).  And things can be dirt cheap to build and yet very expensive (because they are rare, purely artistic/intellectual product, I'm sure there are plenty of examples).

But time is limited. In just a few billion years, that sun will destroy this planet, and anything still living on it. So while growth is not inevitable, it's still a good idea.

If a concept is true but « only » during a few billion years, it doesn't mean it is false.   If you want, yes, you can say that a post-scarcity economy can not last during more than a few hundred million years.

I think the core problem we're having is you're still using the "shortage" definition of scarcity. You cannot get past the physical limits of scarcity, but you can certainly achieve abundance and therefore extremely low prices.

Yes, and I don't see why those "extremely low" prices could not actually reach the zero limit.

[grondilu]

That's not just air you are talking about. It's compressed air which underlies fundamentally different economic principles.
I was just talking about air.

As was I.

Not really, you were not.   Compressed air is not just air.  Same as diamond is not just carbon.

[Lethn]

Oh right, my bad.

Keep in mind: You are arguing with libertarians who believe everything should be charged for. It's their religion, they think money to be the ultimate messiahs.
Might as well argue with a cow about toilets.

LoL  I am very close to libertarian ideas myself, you know.  Actually, I usually agree with most of what Myrkul write iirc.  But not on this, apparently.

Then you are not a libertarian. The boundaries around this ideology are quite strict.

I love how people like you love to throw Libertarians in the same lot as those in corporatism now who charge money for bottled water.

[myrkul]

That's not just air you are talking about. It's compressed air which underlies fundamentally different economic principles.
I was just talking about air.

As was I.

Not really, you were not.

Yes, I was. Why do you keep cutting out the part where I do so?

The same air which I am currently breathing cannot at the same time be used by you. Should we attempt to do so, we would both die.

"price" is defined as the number of some market element (typically money) which must be exchanged in order to get the item in return. Perhaps you are equating "unpriced" with "undefined" (the mathematic term), but in the sense we are speaking of, "unpriced" and "0 price" are the same.

Yeah except that when something is "0 price", I, like many people on this planet, say it is free.  Not unpriced.

Please note that you are in the Economics section of the board, and the definitions of words like "free" and "price" are very specific here. Over in politics you can say "Free as in beer", and everyone will know you mean "0 price." Here, "free" can mean "0 price", or "without cost," and being specific in which one you mean will prevent these sorts of confusions.

No, the boat is not free. It cost you a house. Or several statues. Or toothpicks. Et Cetera, Et Cetera. https://en.wikipedia.org/wiki/Opportunity_cost

I don't know this notion well, but from what I see, it seems far fetched.  Sure, it costs me some time (during which I could have done stuff), but just as much time as if I had stayed sited doing nothing.  To me if something costs the same thing as if nothing happened, it pretty much means it costed nothing.

But you're neglecting the wood. That wood could have been made into the house/toothpicks/etc. Time is important, but not nearly as important as the opportunity cost incurred when you build a boat out of a tree that could have been made into a house.

If your robot did it, it also cost you the energy it took to run your robot, and the robot itself cost a considerable amount of energy to make.  Again, you make the mistake of seeing only the price tag, and ignoring the greater truth: that nothing, even if given away without price, is not free. Everything has a cost.

Energy itself can be free.  It comes from the sun and the sun doesn't ask me any payment.

Sure, I need an energy conversion device to convert the solar radiation into usable energy, so you're going to tell me that this energy has a cost.  It's just not true.  The cost of the production unit is fixed, but the amount of energy it can produce it proportional with time.  And a production unit can make other production unit.  What's the cost of a production unit if it has been created by an other production unit?  Tell me exactly how you calculate that.   I think you can't, or that if you try, you'll come to realize that it will tend to zero.  So to me, energy can perfectly be free.

Yes, the cost per unit of power will trend down the more power you get out of a solar cell. But you are neglecting several costs which are very important. Primarily, maintenance. Solar radiation damages plastics, and even if everything you make is UV-proof, you'll still need to make sure the panels stay clean and aimed at the sun. Cheap, yes. Free, no.

price ≠ cost. The recognition that everything has a cost is what creates the price system in the first place.

Cost is neither a necessary nor sufficient condition for a price.  Things can be very expensive to build and yet nobody will want to buy them (because the people who build them were just wrong about what the market wanted).  And things can be dirt cheap to build and yet very expensive (because they are rare, purely artistic/intellectual product, I'm sure there are plenty of examples).

True, but if something is expensive to produce (and here, I'm not speaking in dollars, I'm speaking in real cost - labor, rare or difficult to procure materials, etc) it's not going to be given away for "0 price." At least, not as a going concern. It will quickly cease to be produced.

But time is limited. In just a few billion years, that sun will destroy this planet, and anything still living on it. So while growth is not inevitable, it's still a good idea.

If a concept is true but only during a few billion years, it doesn't mean it is false.   If you want, yes, you can say that a post-scarcity economy can not last during more than a few hundred million years.

We might be able to achieve something you would recognize as a "post-scarcity" economy, but it will still not be a "0 price" economy. The specter of scarcity haunts even the most advanced civilization. In this case, the number of energy collectors possible to place around our sun, and the amount of energy it is possible to extract from it. Yes, it will be astoundingly large compared to the worldwide energy usage today. Yes, the poorest people will live in comparative splendor to even the richest today. Yes, there will still be prices (possibly even denominated in "energy credits").

I think the core problem we're having is you're still using the "shortage" definition of scarcity. You cannot get past the physical limits of scarcity, but you can certainly achieve abundance and therefore extremely low prices.

Yes, and I don't see why those "extremely low" prices could not actually reach the zero limit.

Because it is not mathematically feasible. Look at it like an electrical circuit: I (current) = V (voltage)/ R (resistance). In order for I to be 0, R must be infinite, or V must be 0. Price is determined much the same way. In order for the price to be zero, cost must be 0, or production infinite. Since neither of those are possible, price may approach zero, but it will never actually get there. Alternatively, you could replace production with supply and cost with demand, but you'd get the same result.

[ElectricMucus]

Oh right, my bad.

Keep in mind: You are arguing with libertarians who believe everything should be charged for. It's their religion, they think money to be the ultimate messiahs.
Might as well argue with a cow about toilets.

LoL  I am very close to libertarian ideas myself, you know.  Actually, I usually agree with most of what Myrkul write iirc.  But not on this, apparently.

Then you are not a libertarian. The boundaries around this ideology are quite strict.

I love how people like you love to throw Libertarians in the same lot as those in corporatism now who charge money for bottled water.

In a way you are right.

Libertarians are fine with charging for bottled water, as well as plain air. (If they could) That alone isn't bad, but...
It's more of a distinction of social attitude, the line between anarchists and libertarians.... You don't have to look very far on this board to find instances of proposed human sacrifice in the name of market principles and social Darwinism.

Libertarians are egoists, to a magnitude that is unhealthy.

[memvola]

Talking about post-scarcity economy does not mean you have no more desires.

In a post-scarcity economy, you can still have the will to have more stuff.  But in order to acquire those stuff, you don't have to compete with other people.  You can make those stuff yourself (i.e. with your machines) without bothering anyone.  You don't have to share or buy anything.

As I said, norms change with tech. In this specific age, we are very focused on "stuff". That's why you might be thinking most of the scarcity we're facing will go away with free "stuff". Travel enough of an interval back in time and you will be perceived as god. The things you think are essential for your survival now would seem ridiculous to people living then. And yet we are speculating on how the wants of a future society will be satisfied. I'll tell you one thing, being able to print delicious steaks won't cover it.

Post-scarcity economy will happen if at some point in the future production capacity far exceeds population growth.  Which is totally possible.

I guess someone already mentioned the second law of thermodynamics. But you don't even need to go that far. Wants will increase with production capacity so that there will always be wants that exceed the production capacity. All of the wants that may seem more or less static (food, healthcare, entertainment that is suitable for human neural system, etc.) are dependent on the norms of the human body, which will inevitably change too.

[grondilu]

The same air which I am currently breathing cannot at the same time be used by you. Should we attempt to do so, we would both die.

Because I didn't read this part sorry.

Let me ask you, just to make things clear:  do you seriously think that air is a scarce resource??   If air is scarce, I very much wonder what is not.

But you're neglecting the wood. That wood could have been made into the house/toothpicks/etc. Time is important, but not nearly as important as the opportunity cost incurred when you build a boat out of a tree that could have been made into a house.

I did not need/want this wood for anything but to build this boat.  So it really does not cost me to use it. Really this argument you're making is weird.  I don't get it.

Yes, the cost per unit of power will trend down the more power you get out of a solar cell. But you are neglecting several costs which are very important. Primarily, maintenance. Solar radiation damages plastics, and even if everything you make is UV-proof, you'll still need to make sure the panels stay clean and aimed at the sun. Cheap, yes. Free, no.

Let me remind you that current technology is not "post-scarcity".  From a theoretical point of view, there is nothing preventing a solar cell to repair itself, or to be repaired by autonomous robots.   Basically just as organic life has been doing for three billion years.  Post-scarcity economy will happen when inorganic, man-made artifacts will be able to extract energy and seemingly maintain a low entropy has life does.  It's not for no reason that many people mention the self-replicating device as a key point when talking about post-scarcity.

Because it is not mathematically feasible. Look at it like an electrical circuit: I (current) = V (voltage)/ R (resistance). In order for I to be 0, R must be infinite, or V must be 0. Price is determined much the same way. In order for the price to be zero, cost must be 0, or production infinite. Since neither of those are possible, price may approach zero, but it will never actually get there.

Cost can be zero, imho.  This clearly is our main disagreement.

[grondilu]

Wants will increase with production capacity so that there will always be wants that exceed the production capacity.

This is possible, but not certain. The production capacity can very much exceed human needs and desire.

[myrkul]

The same air which I am currently breathing cannot at the same time be used by you. Should we attempt to do so, we would both die.

Because I didn't read this part sorry.

It wasn't directed to you, so that's OK.

Let me ask you, just to make things clear:  do you seriously think that air is a scarce resource??   If air is scarce, I very much wonder what is not.

Yes, it is. Scarce in the economic sense, at least, and it is exactly my point that nothing is not.

But you're neglecting the wood. That wood could have been made into the house/toothpicks/etc. Time is important, but not nearly as important as the opportunity cost incurred when you build a boat out of a tree that could have been made into a house.

I did not need/want this wood for anything but to build this boat.  So it really does not cost me to use it. Really this argument you're making is weird.  I don't get it.

Go back and re-read the article on opportunity cost. It's a difficult concept to grasp, sometimes. Basically, now that you've built a boat, even if you wanted to, you could not now build a house with that wood. (at least, not without destroying your boat)

Yes, the cost per unit of power will trend down the more power you get out of a solar cell. But you are neglecting several costs which are very important. Primarily, maintenance. Solar radiation damages plastics, and even if everything you make is UV-proof, you'll still need to make sure the panels stay clean and aimed at the sun. Cheap, yes. Free, no.

Let me remind you that current technology is not "post-scarcity".  From a theoretical point of view, there is nothing preventing a solar cell to repair itself, or to be repaired by autonomous robots.   Basically just as organic life has been doing for three billion years.  Post-scarcity economy will happen when inorganic, man-made artifacts will be able to extract energy and seemingly maintain a low entropy has life does.

And none of those features is "without cost." Autonomous robots need to be built. Out of scarce resources. If you build a solar panel cleaning robot, you cannot also build a house-cleaning robot or a street-sweeping robot with those same materials and energy.

Because it is not mathematically feasible. Look at it like an electrical circuit: I (current) = V (voltage)/ R (resistance). In order for I to be 0, R must be infinite, or V must be 0. Price is determined much the same way. In order for the price to be zero, cost must be 0, or production infinite. Since neither of those are possible, price may approach zero, but it will never actually get there.

Cost can be zero, imho.  This clearly is our main disagreement.

No, they really can't. Everything takes time, energy, and materials to produce. Those are real costs.

[grondilu]

And none of those features is "without cost." Autonomous robots need to be built. Out of scarce resources.

Say I buy an autonomous, post-scarcity-style robot for 100 bitcoins.   I tell him:  "go and figure out a way to multiply yourself".  Then the robot starts extracting minerals from the ground, builds a factory and make copies of himself.  Then they build a spaceship, travel to the asteroïd belt (I know this is wild SF, but that's the subject),  extract more minerals, build even more factories, more spaceships and so on.  After ten years one million of them come back to earth, waiting for my orders.

It's just as if I had bought, with only 100 bitcoins, one million robots.  With a ten years delivery delay, though.   Notice that it's an exponential law.  If I give the same instruction to each of the robots now, ten years later each of them will have created one million new robots.  So in twenty years I'll have one thousand billion and one million robots (10e12+10e6).   That's much less than a satoshi per robot.

What I mean is that once you have self replicating machines, the price (or cost, if you want) of the initial units does not matter at all.  By allowing the machines to multiply themselves, you can make the price per unit arbitrary low.   And to me, when something is arbitrary close to zero, it is zero.

[myrkul]

What I mean is that once you have self replicating machines, the price (or cost, if you want) of the initial units does not matter at all.  By allowing the machines to multiply themselves, you can make the price per unit arbitrary low.   And to me, when something is arbitrary close to zero, it is zero.

The price of each of those robots is low. But the cost... the cost grows exponentially. Each of those robots is made from resources which could have (perhaps even should have) been used to construct something else. Those asteroids that were consumed in the construction of your robot army might have been used to produce human habitation. The fuel used to get the robots from place to place in the belt, not to mention up and down Earth's gravity well, could have been used to light homes. And let's not forget the most costly possible result of self-replicating machines (since we're wandering off into sci-fi anyway): the dreaded Grey goo.

[grondilu]

The price of each of those robots is low. But the cost... the cost grows exponentially. Each of those robots is made from resources which could have (perhaps even should have) been used to construct something else. Those asteroids that were consumed in the construction of your robot army might have been used to produce human habitation.  The fuel used to get the robots from place to place in the belt, not to mention up and down Earth's gravity well, could have been used to light homes.

So that's your opportunity cost again.  I definitely don't get this thing.  Maybe I miss something and I'll read this wikipedia article someday.  But right now, to me there is no cost as long as you don't exhaust the resource.  Even if I make a lot of robots, I probably won't exhaust resources in the solar system.  Not because I can't (I probably could), but because I don't have to.  So in a nutshell, there is no cost since there is enough resource for everyone(*).
Hell, even if I did mine all the asteroids and planets and moons of the solar system, the matter is still here, in the robots.  I'll probably have more than enough (jeez I know human greed is enormous, but not that much), so I won't bother if other people destroy some of my robots to build some for them.  But well now maybe someone will try to destroy all of them and we'll have a crazy interplanetary war, so in this case you might be right.  Yet I don't think the solar system is not big enough to satisfy all human greed.

And let's not forget the most costly possible result of self-replicating machines (since we're wandering off into sci-fi anyway): the dreaded Grey goo.

Oh yeah, the grey goo, funny concept I heard about recently, I forgot where.  IIRC, I heard or read a conclusion from a scientist on this subject, according to which there is nothing to worry about.  Won't happen.


*:  PS and again, at least from a theoretical point of view, you can create matter out of pure energy.  The sun radiates about 4e26W, that's four million tons of matter per second.  A very advanced civilization could make lots of stuff with that.

[memvola]

Wants will increase with production capacity so that there will always be wants that exceed the production capacity.

This is possible, but not certain. The production capacity can very much exceed human needs and desire.

I argue that it is certain, because of the nature of life I described. If our desires stay behind the capacity, something else will take over. You might imagine extraordinary scenarios to avoid this certainty, but then those will take you closer to the limits of physics.

[myrkul]

The price of each of those robots is low. But the cost... the cost grows exponentially. Each of those robots is made from resources which could have (perhaps even should have) been used to construct something else. Those asteroids that were consumed in the construction of your robot army might have been used to produce human habitation.  The fuel used to get the robots from place to place in the belt, not to mention up and down Earth's gravity well, could have been used to light homes.

So that's your opportunity cost again.  I definitely don't get this thing.  Maybe I miss something and I'll read this wikipedia article someday.  But right now, to me there is no cost as long as you don't exhaust the resource.  Even if I make a lot of robots, I probably won't exhaust resources in the solar system.  Not because I can't (I probably could), but because I don't have to.  So in a nutshell, there is no cost since there is enough resource for everyone.

No, seriously, you should not be arguing economics without having at least read that article. Even if you don't exhaust the resource, you still use some of it. Most likely the easiest to get to. That reduces the supply of that resource, and likely makes it harder, on average, to extract. this raises the cost, and therefore the price, of that resource.

Hell, even if I did mine all the asteroids and planets and moons of the solar system, the matter is still here, in the robots.  I'll probably have more than enough (jeez I know human greed is enormous, but not that much), so I won't bother if other people destroy some of my robots to build some for them.  But well now maybe someone will try to destroy all of them and we'll have a crazy interplanetary war, so in this case you might be right.  Yet I don't think the solar system is not big enough to satisfy all human greed.

It doesn't matter if the robots can be recycled. Recycling typically takes more energy than getting the resource out of it's natural state, and even for those things it doesn't, it will still take energy to destroy the robot itself - more if the robot doesn't wish to (or is programmed to resist) be destroyed.

And let's not forget the most costly possible result of self-replicating machines (since we're wandering off into sci-fi anyway): the dreaded Grey goo.

Oh yeah, the grey goo, funny concept I heard about recently, I forgot where.  IIRC, I heard or read a conclusion from a scientist on this subject, according to which there is nothing to worry about.  Won't happen.

No, not likely. Especially with man-sized self-replicating robots. Of course that raises another problem...

[grondilu]

No, seriously, you should not be arguing economics without having at least read that article. Even if you don't exhaust the resource, you still use some of it. Most likely the easiest to get to. That reduces the supply of that resource, and likely makes it harder, on average, to extract. this raises the cost, and therefore the price, of that resource.

I don't buy this.  Yes, that reduces the supply of that resource, but by a proportion that is all the more negligible that the resource is abundant.  When people around you breathe, do you honestly think they are reducing the amount of oxygen available to you?  Does it really bother you?

It doesn't matter if the robots can be recycled. Recycling typically takes more energy than getting the resource out of it's natural state, and even for those things it doesn't, it will still take energy to destroy the robot itself - more if the robot doesn't wish to (or is programmed to resist) be destroyed.

Energy is not the issue.  The sun is insanely big.   For all intents and purposes, we can consider that it provides a free and infinite source of energy.

No, not likely. Especially with man-sized self-replicating robots. Of course that raises another problem...

LoL

I was just thinking that if I send some robots in the solar system, I could worry about my robots being stolen by some other crazy guy, so I could give them quite a bit of artificial intelligence and an evolutionary algorithm for reproduction so they can defend themselves.  But if I do so, they could became self-aware and start wondering why they should obey me in the first place...

[myrkul]

It doesn't matter if the robots can be recycled. Recycling typically takes more energy than getting the resource out of it's natural state, and even for those things it doesn't, it will still take energy to destroy the robot itself - more if the robot doesn't wish to (or is programmed to resist) be destroyed.

Energy is not the issue.  The sun is very big. For all intents and purposes, we can consider that it provides a free and infinite source of energy.

But it doesn't. It produces a very large, but decidedly finite source of energy. Compound that with the difficulty of collecting it all (the earth catches, iirc, less than 1%), and we are stuck with the same problem. Limited resources. How do we deal with that?

I know, let's divide the energy output of our collectors into discreet packets, say, 1000kJ of energy. We'll call that an energy credit, and people can trade them for goods and services....

Oh, that's money.

[grondilu]

But it doesn't. It produces a very large, but decidedly finite source of energy. Compound that with the difficulty of collecting it all (the earth catches, iirc, less than 1%), and we are stuck with the same problem. Limited resources. How do we deal with that?

4e26 Watts.  A nuclear power plant is about 200 MW.  So the sun has the power of 2e15 20th-century-technology-styled human power plants.  That's two million billions power plants.   Let me remind you that there are currently seven billion human beings, and there are several reasons to doubt humanity will ever count more than ten billion members. So the sun could, in a type I civilization of 10 billions human beings, provide the power of almost one million power plants per inhabitant.

Tell me:  is there a number for which you think it is reasonable to consider it is infinite?  What power would it take for you to consider that humanity would have more than enough?  A whole galaxy?