From: Carl Feynman (carlf@abinitio.com)
Date: Mon Jul 23 2001 - 13:53:02 MDT
Dani Eder wrote:
> Once various
> industries are sufficiently automated, we will
> have an economic system that requires minimal work
> to operate. What will civilization be like when
> everyone can pursue their interests rather than what
> has to be done to keep food on the table and a
> roof over your head?
In the 1830s, Dani Eder didn't write:
> Once various
> types of agriculture are sufficiently steam-powered, we will
> have an agricultural system that requires minimal work
> to operate. What will civilization be like when
> everyone can pursue their interests rather than what
> has to be done to keep food on the table?
Answer: almost everyone will still have to work hard at tasks not of their
choosing to get a decent life, just like they always have. The liberation
of 90% of the population from agriculture only increased leisure
moderately. The deindustrialization of the US during the last thirty years
was accompanied by an increase in work hours and a decrease of leisure.
These examples show that the disappearance of various types of work does not
directly translate into increases in non-work time.
What happens when a revolutionary technology makes one class of things cheap
is that the price of other things increases until the economy is close to
full employment again. Consider two examples: real estate and haircuts.
The price of real estate in England has increased smoothly since the economy
revived in 1000 AD. The price of real estate in the Boston area, where I
live, skyrocketed when the 90s Internet boom rained money into the area. In
your future hyper-productive economy, people will still need to live
somewhere nice, and people willing to work will bid up the prices of all the
nice land until most people have to work to afford rent.
Why are haircuts ten times more expensive in Boston than in Mexico City?
The Bostonians aren't ten times more well-coiffed. Any dexterous chatty
person can become a hair cutter, but dexterous chatty people are ten times
more valuable in Boston than they are in Mexico City, because they could get
a job that is ten times more productive in Boston than in Mexico City.
Real estate and haircuts have two properties that will maintain their price
during an increase in automated manufacturing. First, neither can be made
in a factory by robots. Second, each is a positional good: people with a
worse haircut or house than their associates feel inferior. There is no
objective sense in which some quantity of hair care or shelter is "enough".
It depends on how much other people have. This will keep the prices going
up, as show-offs spend more and slackers struggle to maintain some decent
minimum. The show-offs will work hard to maintain their lifestyle, and the
slackers will work just enough to get by.
--CarlF
PS Intellectual honesty requires me to state that I really don't know how
much it costs to get a haircut in Mexico City. I made up the number.
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