Dan Fabulich wrote:
> I actually want to take issue with your definition of "production cost,"
> since I think you are using it wrongly.
Hmm. I think you misinterpret what I meant by my oriinal remark. Let me try to clarify.
Robert was talking in general terms about the cost of good in a far future with advanced nanotech and AI. In this context he remarked that the cost of goods is ultimately constrained by their energy and matter content. I offered that the constraint is actually the labor content of said goods - energy and matter content are important only to the extent that they require effort to produce.
Now, obviously there are contexts in which this is not the case. My remark was actually intended to apply only to societies which are relatively advanced (i.e. post-industrial revolution) and are large enough to support a robust market, but are still sufficiently small that they do not experience scarcity of plentiful natural resources like sunlight and rocks.
In that situation I would say that sentient labor is the major expense for the economy as a whole, and that reducing the labor content of a product is the key to reducing its production cost. Scarcity premiums, monetary distortions, and other such issues are transitory in nature, and in a healthy economy they will be minor factors in any event. Profit is more enduring, but it usually represents a major cost issue only in very risky or very uncompetitive markets, and both of these conditions tend to be transitory in a society with rapid technological progress.
The reason I mention indirect labor costs is simply to remind readers that the labor content of a product is usually much greater than it appears. For example, the labor content of your widget includes the time of the engineers that design it, the workers who build it, the staff who keep the company running, the people (at another company) who mine, refine and process the materials that go into it, the transportation workers who deliver said materials, the people who design and build the machinery used to manufacture the widget, et cetera.
Billy Brown, MCSE+I