Saturday, February 09, 2019

The economics of a proto-post scarcity society

I've spent enough time discussing how Rick Webb doesn't understand economics, instead retrojecting hollow capitalist tropes on a fictional television show. But it's worthwhile to discuss the economics of "proto-post scarcity economy." However, without the specific historical context, it's impossible to talk about how a hypothetical economy "actually is"; the best I can do is lay out a kind of general framework.

Economics is the science of how we make mutually exclusive choices, usually (but not always) choices about material things. How do we manage scarcity? So the first thing is to think about what is scarce. There are three things that are always scarce: unique things, land, and human time. And even if some resources are not scarce, a society might still want to use them efficiently. Finally, there are things that are still so expensive that not everyone who wants one could have it.

Unique things are scarce. There's only one Mt. Everest, and only so many people can climb it in a year. There are only so many great bass fishing spots, only so many Hawaiian beaches. Only so many people can use pristine natural parks and forests. There's only one Mona Lisa. How does a society get to decide how to use inherently unique things?

Land is scarce. Although we can improve some of the marginal land, there is a finite amount of land on the Earth. We can probably house a lot of people in urban high-rises, but only so many people can have their own castles, McMansions, or even detached ranch houses with big back yards. Only so many people can have their own farms or vineyards. A society cannot make more of this kind of land by building up. Even if the society builds up, penthouse apartments will be scarce. Apartments with a view of something other than the wall of the next building will be scarce. Again, how does a society allocate scarce land?

Human time is scarce in the sense that each person can do only so many things in a day. If something one person wants requires the effort or attention of another person, that effort or attention is scarce. Let me define a "job" in this context as human effort or attention for the benefit of other humans (even if doing that job is somehow beneficial to the "worker"). There will be "good jobs", where there are more people who want to do that job than there is "demand" for that job, and "bad jobs", where there are fewer willing people than demanded. Ideally, we want everything in equilibrium, where all jobs are "neutral": there are exactly as many people who want to do that job as there is demand for that job. How would a society do so?

Finally, a society would want to use even non-scarce resources efficiently. For example, a society might be able to produce as many shoes as people wanted, and if everyone woke up one day and decided they all wanted twice as many shoes, the productive capability would allow that with no other trade-off. Even so, it would make little sense to produce more shoes than people actually wanted. Even if there is no scarcity, a society might have to still track how many and what kind of shoes people want, and produce just those shoes and no more.

The answers to these questions depends in part on production technology. If everyone has a Mr. Fusion, a replicator, and a transporter, most of these problems go away, especially if the replicator can replicate most anything. For example, if a replicator can make the finest cuisine, there is no need for restaurants. If individuals' replicators can make most anything, there is no need to have factories or distribution networks. Similarly with transporters: if I can get in my personal transporter and just go anywhere, there's no need for trains, planes, and automobiles.

But replicators seem quite advanced. It's likely that a planet-bound proto-post scarcity society would instead use mostly automated factories, which are themselves constructed mostly automatically. Even if we can produce as many factories as we want to produce as many goods as we want, we would, I think, still want to be efficient about production, distribution, and expansion.

However, the above raises perhaps the most important issue: what does it mean to say that we can produce as many factories as we want to produce as many goods as we want? If some society produces some amount of goods but could relatively easily produce twice as much, why wouldn't people not want twice as much? At what point do we stop wanting more stuff? And, because people's preferences and desires are socially constructed, how do people stop wanting more stuff?

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