SCI and ECON Nanotech

Lyle Burkhead (
Sun, 29 Sep 1996 17:20:28 -0500 (EST)

Dan Clemmensen says,

> An individual will be able to produce essentially everything needed
> for a lavish lifestyle, with none of the costs associated with trade.

In other words, Extropian Nanotech, or MNT, as defined here,
means a Cornucopia of self-contained genie machines, in which the
entire economy is mapped onto a small system that can be owned,
maintained, and operated by an individual, and each individual has one.
In this scenario, there is no trade.

The question to ask is: why is there trade now?

Suppose you have an economy in which all individuals have genie
machines. They all try to be self-sufficient, to the extent that their
genie machines allow this. So our starting point is an economy
similar to early feudalism, when it first emerged from the ruins of the
Roman Empire. Each local Baron had his own farm, his own orchard,
his own cattle. He and his village made their own clothes, their own
horseshoes, their own houses, everything they needed. They even made
their own tools. A Baronial estate was a very coarse-grained version of
a genie machine. It could produce anything, if "anything" is construed
in a generic sense: some kind of food (not necessarily very good),
some kind of clothes (not necessarily very good), and so forth.
Our MNT scenario is a high-tech version of this, in which each individual
has a very fine-grained genie machine based on nanotechnology,
which can produce anything the world economy can produce.

The Gradient Theorem.
I think it is a theorem in economics that if the genie machines are finite,
then the MNT scenario is not stable. Any approximation to it is unstable.
In fact, there is a gradient away from self-sufficiency, in the direction of
more trade.

By "finite" I mean:
1. The genie machines use energy (they are not perpetual motion
2. The genie machines perform their tasks at some measurable rate
(not instantaneously), and different tasks take different times.
3. The cost of retooling or reprogramming a machine is nonzero,
and the cost varies depending on what kind of retooling is done.
4. The genie machines have an interface that requires some
expertise and effort on the part of the user -- genie machines have to be
programmed, rather than merely commanded. (Or if they can be
commanded, the commands have to be so detailed that it is a lot of
trouble to give them properly, so "commanding" amounts to the same
thing as "programming.") Different tasks requite different degrees of
expertise and effort.

If the output of a genie machine depends to some extent on the effort
put into it by its user/programmer, then all genie machines will not be
equal, any more than all humans are equal (or all Baronial estates).
Each of us will have his/her own unique genie machine, just like we all
have a computer, we all have a set of tools of some kind, we all have a
personal library, and so forth. No two are exactly alike. We not only
have different hardware, we also have different skills. There will
always be differences in the effectiveness of different individuals at
performing different tasks, even when they are using genie machines.
People will be power users of some features of their genie machine, and
never get around to reading the user's manual for many other features.

Therefore trade will exist, for the same reason it exists now.

The existence of trade means that the various genie machines and their
operators will be in communication with each other, offering various
services. This will lead to more specialization, not less. Individuals
will tailor their genie machines and their skills to the market. They will
find that it is in their economic interest to specialize, rather than try to
do everything. Self-sufficient Baronial estates will give way to an
economy based on trade.

Finiteness Assumption #4 is crucial here. If this assumption is false -- i.e.
if the genie machine requires no effort or skill -- then we will all be
power users of all the functions of our genie machines, and there will be
no need for trade.

Finiteness Assumption #4 is certainly true for computers as they
presently exist. My computer is a genie machine, in the sense that it
can produce any software I ask it to produce. I could "ask" it to make
me a word processor, if I wanted to. But "asking" is a rather tedious
process. I would have to write the program, compile it, test it, debug it,
install it... It would require a lot of effort that could be better employed
elsewhere. I would rather buy a word processor from someone who is
devoting a lot of resources to the task. I would rather spend my time
doing what I am good at, and let other people do what they are good at.

That's why there is trade now: every task requires some nonzero effort,
and different tasks requires different degrees of effort (and different
amounts of time). This leads to specialization and trade.

In the MNT scenario, asking the genie machine for a word processor is
not tedious at all. Making a word processor requires no more effort
than anything else. All I have to do is describe it, and presto, it's here.

If it requires *any* more effort than that -- in other words, if there is
any significant difference between the effort required to produce
different items -- then the situation is unstable. The inequality of effort
will create a gradient leading away from self-sufficiency, toward an
economy with trade and ever-increasing specialization.