Saturday, May 26, 2012

Is There a Scarcity of Resources?

From a FB discussion:

Essentially at its core, everything we produce is merely a collection of atoms arranged in various manners. If you look across the known universe, there is a virtually unlimited supply of all of these atoms. In fact, I believe that in reality the "scarcity of resources" is actually the "scarcity of labor" in that it takes a great deal of work to move these collections of atoms into ever more useful formations. Currently when we typically talk about "resources" we mean various pre-formed collections of atoms that we mine or collect from the surface of the Earth. These formations are extremely valuable to us because they are already in an useful formation and it takes very little additional work to do all kinds of cool stuff with them. But essentially we could easily recreate these formations from the raw atoms that they consist of given an unlimited supply of work.

The "scarcity of labor" is itself founded on two things. First that we humans have limited time on this earth, and while it has been gradually increasing over the generations, it is still very much finite. The second component of the scarcity of labor is our productivity, or essentially how much stuff can we do with each hour we have been granted to live in this universe.

Human productivity has been increasing dramatically, especially over the past couple of decades. Robotics, computer technology, and increasingly sophisticated software systems are coming together to allow a human to build a system that completes a set of actions almost without any incremental human labor once set in motion. This trend is only going to accelerate as new software systems build on past tools and as advances towards semi-artificial intelligence open up the opportunity to automate ever more complicated tasks.

Increasing productivity is driving down the "scarcity of labor" by allowing humans to increase output per time spent, or alternatively to require less human time per unit of resource produced. The result is that the "cost" of resources fall. In theory, if we are ever able to sufficiently automate the resource extraction and production process that human labor input falls to zero, the "cost" of that resource should also fall to zero.

So essentially from a merely materialistic perspective, I think we are slowly moving away from resource constrained system to one that is vastly cheaper, if not actually unconstrained. Most likely rather than proceeding to totally unconstrained system we will move toward something like what we have seen in agriculture, where productivity has increased to such a degree that in advanced nations we are able to dedicate a tiny sliver of total labor to agriculture to produce enough food for everyone with essentially no shortages (a perhaps a degree of over production). I could easily see the resource extraction/manufacturing/distribution value chain dropping to an equivalently low level of labor participation and sufficient material goods produced that everyone is more or less content. This is obviously focused on the "Wal-Mart" set of material goods which are merely functional. There will always be those who choose to pay extra for prestige, novelty, or style for instance, but that is a personal choice and the core elements of material wealth will be cheap and plentiful.

This of course brings us to the most interesting trend we've seen over the past few decades which is the dramatic shift of human labor out of material production (and previously agriculture) into services. I think this is fascinating, but I am unsure that we are actually increasing net wealth with most low level services. Rather I think it may be a bizarre symptom of our economic system where you must labor in order to consume. The result is that a great mass of people who are otherwise unproductive (ie unable to provide any net increase in the productivity of the material goods value chain and are thus excluded in favor of slightly more productive people) must find some way to monetize their time. The only available option is to sell their time to others in hopes of making enough money to pay for basic needs. Some people are lucky and through education, skill, and fortune, have moved to relatively high value services positions such as lawyers, ad executives, managers, or doctors, but many are not able to successfully compete for these roles. For the majority of these people they are forced into the only remaining option which is essentially unskilled service roles such as waiters, retail sales, etc in hope of extracting some tiny sliver of marginal value to purchase the now quite cheap material goods. My biggest question right now is if we as a society are really better off having these people labor in this way, or if it would make sense to essentially liberate this group of low level service providers by breaking the link between labor and material goods. I realize this is starting to get a little cray, but I also think society is transitioning into a new situation, where the core assumptions of our economic system need to be reconsidered. I also realize that there are elements of this concept that sound socialistic, which of course is everyone's boogie man, but I think the socialism vs. capitalism dynamic is very very different in a post-labor economy.

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