Reader's-Eye View of Nanotechnology Economics

Khannea Suntzu writes to us with a comment about the economic implications of molecular manufacturing (ellipses are in original):

Nanotechnology is disastrous ! But what you are saying, there is no way to stop it ... But ....on the one hand it will cancel jobs on a fundamental scale, and nanotech nor society at large can't possibly create replacement jobs fast enough to keep people with some kind of humane income - ... and on the other hand people with knowledge, infrastructure and wealth will be a lot more capable of expanding their wealth.

Those who are poor will have a delay in catching up while those who are rich will get exponentially richer. So maybe in Europe we'll be able to cope, by implementing some kind of "basic income" and a sane level of taxing the ultra-rich- but I won't see that happen in the ideologically far right-capitalist US or the anarchic third world - so imagine a third world country somewhere in the year 2035, most home industries wiped into oblivion by nanotech minifacs, traditional agriculture wiped into oblivion by cheap biogenetics and superefficient nanotech based agriculture - those people would be without any product in demand, locked away from resources and raw materials, largely incapable of coping because of traditionalist lifestyles and largely incapable of catching up (and I don't even want to think about fundamentalists of one kind or another, who'll reject this concept alltogether!) ...

Am I right in assuming this will (and must) imply the effective end of capitalism as we know it? I.e. we need to start giving stuff away for free?

If we don't most people who are "locked out" will evolve into some form of criminal, right? I mean, try selling this conclusion to US republikans or neoconservatives !!!

These are the kinds of questions we wrestle with here at CRN. We don't have a full answer yet; indeed, we don't even know exactly what questions to ask, because we don't know whether molecular manufacturing will be accessible for legal civilian purposes. If it's only available on the black market, then it'll have less economic impact -- while having a very large negative impact on security and policing.

But if we figure that commercial interests will develop very inexpensive manufacturing of high-quality goods, then we have to ask several interesting questions: How much wealth concentration will result, and what will be the effects of that? How many people will be out of work? How will they get the necessary resources to live?

It does appear likely that product manufacturing, shipping, and warehousing costs will drop faster than prices, causing profits to rise at least for a while. I'm enough of a capitalist to believe that wealth concentration isn't automatically harmful. And I'm not enough of an economist to know whether extremes of wealth concentration can be directly harmful to an economy, or whether the harms are only indirect, through human psychology. It may be that falling prices will create new opportunities due to greater sales volume. This needs to be looked at in detail.

In the US, we went from tens of percent of the population farming, to about 2% farming, in just one century. That's a lot of people "out of work" but manufacturing filled the gap. If we go from tens of percent manufacturing to 2%, in a decade or less, will we find something else to fill the gap? Probably -- there are already more people in "service" jobs than in manufacturing. Will most individuals be able to find new jobs that provide a living wage? I don't know. I also don't know much about job breakdowns in other countries. Again, this needs to be looked at in detail.

If people are thrown out of work wholesale, can they stay alive and happy without receiving an employment wage? Even in the US, there are some interesting options. People living in Alaska are paid about $1000 per year by the government, just for living in a state with a lot of oil. If molecular manufacturing reshapes the economy, a similar but larger payment, funded by existing taxes on (much larger) corporate profits, might be a substantial help. There may be other ways of delivering money without going through the traditional charity infrastructures (welfare, religious charity, etc). And this also needs to be looked at in much more detail.

But the bottom line is that the resources available to people from molecular manufacturing, like so much else, will depend on policies that people and governments choose. If the Open Source model is allowed to coexist with the Commercial model, as we believe it should be, then there will be a readily-available nearly-free supply of the necessities of life -- along with a much more attractive and expensive supply of goods for those who can afford them.

On the other hand, it wouldn't be difficult to rig the game so that almost everyone got very poor and almost no one with influence cared. The best thing I can say about that scenario is that it would probably result in low levels of innovation; in the end, nations that allowed more innovation would out-compete the "concentration" model.

We believe that all these questions, along with questions of politics, policing, environment, and health, need to be studied in detail before molecular manufacturing arrives. So far, this is not looking very likely. As a result, civilization will blunder forward blindfolded, and probably trip on something.

Chris Phoenix

Tags: nanotechnology nanotech nano science technology ethics weblog blog

Comments

[The long march to post-scarcity utopia]

People, money is just an organisational tool for the human race. A tool to allocate scarce resources. Molecular assemblers (if they can be done) would be a massive step towards a post-scarcity society where money and wealth as we know it will not be necessary.

[Nato Welch]

A pretty fair assessment, on both your parts.

The one thing more I'd say is that MM has the potential to drop the prices of products faster than average income might drop due to layoffs. That depends on a lot of factors, not the least of which is the temptation for companies to keep prices high - especially when that looks more like not dropping them than hiking them.

I know I've said before that most of my meager budget doesn't buy stuff, so cheap stuff doesn't actually inspire utopian visions in me. But there's no dearth of indirect effects. Take a new housing boom in MM-assisted apartment tower construction.

[John]

The Third World is probably screwed. But I don't see many problems in the West as a result of molecular manufacturing.

Particularly in the beginning, it will mostly be basic products that can be made on the cheap. Quality of life will improve substantially for those with lower incomes because necessities will take up a much smaller share of their budget.

The affluent will find various new markets to demonstrate their wealth. But in any case consumer goods will not propagate significant differences in quality of life. The medical sector could do so, however.

[John B]

There is no such thing as 'post-scarcity economics'. That phrase is an oxymoron.

Instead, economics after mass availability of nanofacture will change over some time (short or long depends on large numbers of variables) depending on what the new economic bottlenecks - or you could say 'scarcities' - become. This could be a number of things, from pure feedstocks to power to cooling to information flow/bandwidth to patterns for the nanofactories to copyrights on said patterns and nanofactory designs to I don't know what all.

On to some specifics:

Given the IMO extremely likely case that nanofacture will not be able to handle every element in every chemical combination, those products that require the combinations unavailable via nanofacture (perhaps such as some foodstuffs) will become a scarcity that may become a critical crop for some farmers.

(This would be a tenuous advantage at best, assuming ongoing nanofacture R&D, as such products would be very visible goals for such R&D groups. Even so, it may offer at least some job-loss mitigation once nanofacture can handle food production.)

Also given that there'll be time needed to create patterns capable of being replicated for many modern products - clothing, vehicles, comm gear, computers, assembly lines, etc - there'll be some delay in which corporations not immediately hit 'out the gate' by nanofacture patterns will have time to adopt other capabilities as business models. This will be a very high-stress period, economically and sociopolitically, as groups strive to find ways to survive the changes.

In the case of large-ticket items with large corporations, expect to see all sorts of legal shenanigans (and also serious concern by people without ulterior motivations) about the 'safety' of nanofactured products. Example - nanofactured vehicles may face serious concerns regarding collision safety, even if they're made of diamondoid, corundumoid, or other 'hard' material possibly based on concern with repetitive strain on crystalline lattices.

*shrug* There's lots more to be addressed in this topic. I don't agree that the third world is 'screwed' in this scenario necessarily - depends on when they get nanofacture and what the scarcities may be. I do not agree that nanofacture will kill the concept of money - quite the opposite, I think it'll strengthen said concept.

The one thing I don't think I can overemphasize is how tummultuous such a period would be. And note that there're lots of organizations with lots of sociopolitical and economic power which are opposed to such chaos...

-John B

[Brian Wang]

Materials and production revolution is speeding up all over.

An interesting test case to watch play out over the next 2-5 years is Memjet. Potentially a highly disruptive new technology for the $100 billion printing industry (with related industries $200 billion).

http://advancednano.blogspot.com/2007/07/memjet-printer-details.html

They look to introduce 60 ppm printing early 2008 and by 2010 360 ppm for the the lowend. The highend is 64,000 ppm.

This should also impact 3D printers/rapid manufacturing and rapid prototyping.

Inkjet printing technology can also be used to make electronics and can be used for organ fabrication. It is a highly flexible production technology.

Synthetic life, synthetic biology, expanded DNA nanotech, graphene, different kinds of graphene paper, cheap carbon nanotubes and super MEMS/NEMS will be growing impacts that culminate in the nanofactory (a milestone) but even more disruptions to follow. Each thing is interesting for its own impact but it is the increasing rate of big technological dominos that are enabled to fall after which is the bigger thing.

[jim moore]

On ink jet technology in general:
The biggest limitation of the ink jet process is the need for a very low viscosity fluid 8-14 cps (almost water thin). This eliminates a wide variety of chemicals and mixtures that one might want to use. Also both the dynamic and static surface tension of the "ink" has to be tightly controlled, again limiting the choices one can make.

On MEM jet in particular:
They are using a thermal ink jetting system, that means that the ink has to be able to go through a heat cycle unharmed. In a thermal system you generate a hot bubble of steam that pushes out the drop of ink. This is a major limitation to the types of materials that you can jet. If they had used a piezoelectric system it would have far fewer limitations on materials that could be used.
Also they seem to be using dye in water as the ink. It would be more impressive if they were able to use pigmented inks. Dyes are soluble molecules, pigments are particles ~10-100 nm in size. Again this limits the type of materials that can be jetted. (If they are using dyes, the prints that are made will fade faster than if they used the appropriate pigments.)

Now, all my comments above are in no way meant to minimize the achievements these guys seem to have made. If they are able to come to market with their products they will have a big impact.

But as far as using MEM jet technology for rapid prototyping, I see it as extremely limited.

[Michael Handy]

I think that in the first world at least, a growing number of industries are going to have problems like that of the entertainment industy. Collapse of standard channels of distribution and growth of new ones outside their control, instant copying of products, and massive piracy of IP by the very people they want to sell to.

Given that the response of that industy was dismal, I can hardly see more conservative industries adapting any better. Scarcity wont disappear (such a thing being impossible), but its effects will be eliminated in many areas to the point where traditional notions of supply and demand break down.

Some industries may fail and revert to the control of individual artists and open source groups, others may survive through radical changes, and a lucky few will be mostly unaffected.

As for money, it may be totally eliminated in some areas where things will essentially be free (its not like you can radically restyle a potato), and strengthened in others (Industries that a nanofacory cant build the products of, perhaps also industries where the rate of progress outcompetes attempts to distribute its goods widely.)

In the third world, the effects will be chaotic however we handle the transition, because the third world is already largely chaotic. We may see everything from attempts at nanodictatorship to a resurgence of socialism where the central planning problem has been all but eliminated.

[Al Fin]

John B's comment above is particularly helpful. Michael Handy touches on some pertinent points as well.

Many corporations will probably be in the vanguard of using nanotech and MM. Large corporations will buy out the smaller labs like in biotech. It's important that open-source MM is able to by-pass the acquisition frenzy.

The best way for the nano community to deal with issues of safety that governments and corporations will try to use to shut them down, is to pre-empt the complaint. A UL-labs type of testing institution should be financed by the nano industry to study and test all conceivable issues of safety before the products come on line.

Al Fin -

Thank you for the kind words.

The difficulty with preempting something like what you comment on is that testing "all conceivable issues of safety" with a general nanoassembler is going to be impractical, if not impossible to forsee. Even Chris Phoenix's concept of limiting a nanofacture capability to just assembling 'nanoblocks' will have effectively untestable numbers of safety issues if it allows anything other than static, unbending physical linkages.

Even then, being able to create any physical shape to a very fine scale from whatever material the nanofactory creates could easily generate a large number of safety concerns.

IMO, of course.

-John B

[Tom Craver]

In http://www.rfreitas.com/Nano/NoninflationaryPN.pdf Freitas argues that nanofactories won't be very deflationary. But he defines "deflationary" narrowly as prices declining, and then shows that various corporate and government manipulations might keep the prices of goods stable despite nanofactories.

But what we really care about is whether we'll have a depression that might cause deflation. E.g.:
- Many jobs are quickly lost in manufacturing, construction, repair, shipping, etc - as those industries cut back, anticipating loss of business and lower labor needs.
- Demand for services contracts due to the layoffs - resulting in service sector layoffs.
- People see hard times coming and cut back on optional purchases/services - further contraction of the economy.
- More layoffs, more fear, rolling crash.