ECON: A change of heart

Tony Belding (
Tue, 05 May 1998 16:57:50 -0600

Dan Fabulich wrote:

DF> In contrast to Marx's "labor theory of value," I think modern economics is
DF> a kind of a "capital theory of value," which presumes that all wealth in
DF> some way, shape, or form, stems from capital.

Wealth stems from *any* economic resource that is used to produce goods and
services. Labor has always been the most important of those. (Although land
is very important in agricultural societies, such as under feudalism.)
However, automation allows us to substitute capital for labor. This is
exactly what happens whenever a company replaces workers with machines. It
also happens when machines allow a given number of workers to produce more,
instead of having to hire more workers.

DF> In this sense, we understand the work done by a laborer as comparable to
DF> the wealth created by a capitalist. The only difference is this: where
DF> the capitalist uses material capital to create wealth, the laborer creates
DF> wealth using their "human capital." Wages can be thought of as the price
DF> of human capital.

OK. But that seems to me like a terribly abstract and stilted way of saying
it. It's more straightforward to say that labor and capital can be partly
substituted for one another. This has always been true to some extent, but
automation technology allows *more* capital to displace labor. Eventually it
could allow all labor to be displaced by capital.

DF> Why is this relevant? Because this means that it is wrong headed to say
DF> that "work" must always be done. Wealth must be exchanged for wealth, but
DF> wealth comes from CAPITAL, not work. And human-owned capital may one day
DF> be just as effective at creating wealth as human capital is today.

This is where AI robots come into the picture. If we assume a robot is owned
by someone and is therefore a form of capital, and if we also assume that the
robot can perform tasks which a human worker could do (i.e producing "wealth"
in the form of goods and services), then this is the mechanism by which wealth
can come from capital instead of from labor.

DF> In the long run, however, the solution to this problem is cheap privately
DF> owned capital, with as high a rate of return as possible. The perfect
DF> extreme example of this would the "anything box:" the anything box can
DF> create anything, including another anything box, for free. This is
DF> obviously unrealistic,

Maybe not entirely unrealistic, in the long run. I envisioned an "anything
box" that was more like a bush robot, able to wander around and help people in
whatever way it sees fit. It could be sort of semi-sentient, semi-autonomous
creature: a robotic slave that belongs to the general public rather than to
any private individual. It's an idea that I find both attractive and
suspicious, because it seems too utopian. Too good to be true?

DF> HOWEVER, I still maintain that having lots of sentient robots around would
DF> be good for us too. We don't have to make an either-or decision here. We
DF> can use BOTH, reaping the benefits of automation AND the benefits of a
DF> larger population all in one fell swoop.

I'm still not clear on exactly what are the benefits of a larger population.
I'm working from a standpoint of fear, because people tend to *want* to
reproduce. It is something they innately desire, for Darwinian reasons.
Those who don't want to reproduce get weeded out of the gene pool. I must
admit that even I find the idea of creating new life rather appealing. It's
something I would enjoy doing. And I also note that an exponentially growing
population will eventually outstrip any and all resources that you can throw
at it. It doesn't matter exactly what the limiting factor turns out to be,
because a growing population will eventually *find* that limit. It's hard to
see a happy end to that.

Realistically, I probably shouldn't be worried about this. We may be
thousands of years away from running into those limits. Still, why tempt
fate by building population growth into your economic system?

   Tony Belding