The Economy Of Plenty (Was: Free-Markets)

Eliezer S. Yudkowsky (
Wed, 10 Sep 1997 19:45:00 -0500

I don't think I liked the way Holly Pearson phrased the issues involved. =
impending economic collapse seemed too much like a social conflict, not a=

blind consequence of increasing technology. There may be winners and los=
but they are irrelevant and unintentional. Like most technological
consequences, it is not in the least inevitable; it only takes more techn=
to counter.

Our economy will either collapse or transform. *Which* will depend on wh=
we're smart enough, and flexible enough, to redesign it along the necessa=
ry lines.

I have had thoughts along those lines, and they shone through in "Staring=
The Singularity". Hence the quote, I suppose.

=46rom "The Economy Of Plenty", an unfinished work: (=A91997 by Eliezer =
S. Yudkowsky.)

-- The Economy of Plenty --

The basic problem is economies of scale. At our level of technology, it =
takes a billion people working to support six billion. And then the othe=
five billion starve, and you start over with one billion and two hundred
million, until you've got a self-supporting community of ten million peop=
and the six billion are dead.

There are four obvious solutions. First, give everyone a Universal Stand=
Wage. Second, break up humanity into units of ten million and forbid res=
transfers between them. Three, raise the standard of living until there'=
enough work for everyone. Four, distribute the work more evenly.

Solution one: In essence, this amounts to dividing humanity into workers=
drones. It differs from Communism in that in Communism, everyone was sup=
to work and nobody did, while here, only a few people will be supposed to=

work. I don't think this solution, or any other which involves dividing
humanity, will be stable. The class conflict will destroy it, and the "W=
should *I* work?" problem will still be present.

How to make it work: Instead of dividing humanity, abolish *all* work. =
the rest of the way from one billion supporting six billion to zero suppo=
six billion. Build arcologies which require only a few thousand people,
*total*, to sustain the entire planet at a minimal standard of living. T=
paste the current economy on top of that. If this is stable, the rate of=

progress to Singularity will slow down, but we'll have all the time neces=
to get it right the first time.

Solution two: Partition humanity into six hundred economies. This will
falter on limited resources, brains as well as arable land, of which we h=
enough to support five or even twenty economies, but not hundreds. For t=
planet to support six billion, we need technological economies of scale. =

How to make it work: I don't know yet.

Solution three: Raise the standard of living. Why hasn't this happened
already? That is, how can we be running out of work when people are stil=
poor and hungry? The answer is that these people are unemployed, hence d=
o not
have any money, hence cannot pay for supplies, and hence do not add to de=
First let's see us raise the demand to match the current supply, much le=
the supply available if everyone worked!

How to make it work: This gets kind of complicated, and requires massive=

computing power. Essentially, you have to get rid of money and replace i=
with a barter system. We *can* do this now because we have enough comput=
power to institute "complex barter" systems. This takes some explaining.=
simple barter transaction is one in which A gives B a pineapple, and B gi=
ves A a
coconut. A complex barter is where A gives B a pineapple, B gives C a
coconut, and C gives A a watermelon. Note the triple cycle. Complex bar=
is too hard to keep track of - without computers, heh heh heh - which is =
we have money, to transform every transaction into a simple barter. By
"money", we here mean something with artificial value, rather than univer=
units of exchange. A complex barter system can still have standardized u=
of valuation.

What would be accomplished by this? Well, one of the economic design fla=
leading to our current problem is - more than I can finish this sentence =
Here's what happens. Person A, who builds widgets, builds 100 widgets. =
through K also build 100 widgets. Unfortunately, there is only a market =
1,000 widgets total. But 1,100 have been built.

The standard capitalistic reply at this point is that G, who isn't very g=
at this, goes out of business. There are only two problems: First, G ca=
get another job, and more importantly, that's NOT what actually happens! =

Instead, the price of widgets drops. Like a brick. They trade widgets f=
cigar bands on a one-to-one basis. The result is that not even E, who's =
best, can make a living - much less G.

In an ideal world, this overproduction would simply raise standards of li=
Really. Think about it. There are more widgets for everyone! Hooray! =

Again, ideally, food would be overproduced. So the price of food would d=
as well. The price of everything would drop, and widgets would be dirt c=
but so would be everything else, and A and E and G and K would all be ric=

The problem is that production of food is out of sync with production of
widgets. The current economy was BUILT ON SCARCITY. Everyone, everythin=
g, is
centered on the idea that supply is always slightly less than demand. If=
- and only one - field shifts to a massive-supply model, that field suffe=
rs. =

It's like being the only cooperator in a world of defectors. You need a
massive shift.

And again, the existence of money is the problem. Not private property! =
not saying that. The problem is money instead of barter. See, in a bart=
system, you can establish valuations that can outlast supply and demand, =
or at
least weather the turbulence created by switching to an Economy of Plenty=
=2E =

Suppose that we declare one widget to equal one hamburger in value. Now,=
if there are too many widgets, anyone who's made a widget can still get a=

hamburger in exchange. G's widgets might rot, but that's better than all=
widgets rotting. We'll assume, actually, the existence of some buffer, s=
temporary charitable system, so that G remains in business for at least a=

month or two - while the production of hamburgers increases also.

We can also move up to establish a futures market - even better than bart=
er -
for absolutely everything on the planet. Then even G's widgets don't rot=
=2E =

Instead, everyone sells 91 widgets instead of 100 - which may sound bad, =
that's on a G-just-went-into-business model. If you assume a technologic=
overproduction, 91 widgets is just what they sold last year. It's
technological overproduction that's the problem, after all - population
expansion is self-correcting. So everyone has an extra 9 widgets to trad=
e for
whatever they want. Hopefully, someone besides widget-makers is
overproducing, so the surplus can all be traded around.

Eventually, everyone overproduces, and those who produce the most wind up=
the most of the overproduction. So the system has two parts, really: On=
e, a
futures market (applied to EVERYTHING) so that overproduction doesn't cau=
prices to drop, and two, a complex barter system - whose necessity is kin=
d of
hard to put into words, but... The value of a dollar is arbitrary. If a=

widget-future involves $5 a widget, the value of the contract is affected=
fluctuations in the money supply as well as the supply of widgets. A
widget-future which involves trading one hundred hamburgers for one hundr=
widgets may fluctuate all over the place in THEORY, but in practice, one
hundred hamburgers are what the widget-maker will eat this year. In othe=
words, the universal futures economy is very vulnerable to inflation, whi=
ch a
complex-barter system will stop.

Solution four: Distribute the work more evenly. How can I say that we'r=
running out of work, when everyone WITH a job is spending every waking ho=
ur on
their job? The problem is that ***
[End of work in progress.]

To summarize #4, you'd need to entirely revamp the structure of a corpora=
along certain lines. This would be even more complex than the complex-ba=
bit, which itself should really have diagrams. The solution to number fo=
requires complex barter as a *prerequisite*, and something called
collaborative filtering, and even substantial alterations to American law=
=2E =

Anyway, that's why I stopped there - I wasn't sure I had it all worked ou=
-- = Eliezer S. Yudkowsky
Disclaimer: Unless otherwise specified, I'm not telling you
everything I think I know.