- And this means that in a sense we are moving toward something like my intelligent-robots world; many, many tasks are becoming machine-friendly. This in turn means that Gordon is probably wrong about diminishing returns to technology.
Ah, you ask, but what about the people? Very good question. Smart machines may make higher GDP possible, but also reduce the demand for people — including smart people. So we could be looking at a society that grows ever richer, but in which all the gains in wealth accrue to whoever owns the robots.
And then eventually Skynet decides to kill us all, but that’s another story.
Interesting to see Krugman ruminate about these sorts of things.
I'm surprised to see that Krugman doesn't go into a lot of depth here - MK posted the closed thing to real meat the article had. Which is a shame, beacuse I'd love to have an economist's take on a transition from capitalism to a post-scarcity world. (If, in fact, a post-scarcity world is where we are headed.)
When you say "post-scarcity world", what exactly do you mean?
A world where it becomes so easy to make certain everyone is fed, clothed, and sheltered that it is no longer required of people to work to take care of their basic nessecities. Think Star Trek's federation.
Oh, okay, so if I understand correctly, it's a world in which the basic nessecities for survial are available to and provided for everyone while all other goods and services above that would be subject to scarcity. Isn't that just welfare, but on a much larger scale? Hm, maybe the issue is that --like I just did-- it's called "welafre" rather than a "post-scarcity world in which everything is provided and everyone is better off". Still, I don't think that that's where we're headed. Where would the money come from to pay for all this free stuff?
There's a Sci-Fi book called Accelerando, by Charles Stross; he released it under the Creative Commons license, so it's available to freely download as an ebook. It's a pretty interesting futurist perspective, and the first couple chapters deal almost exclusively with a new global economy in a post-scarcity world. Post-scarcity is more than just 'welfare on a larger scale'. It's an upending of "Supply and Demand". Money works because of supply and demand; post-scarcity imagines a future with sufficiently efficient automation, resources and energy supplies to make money irrelevant. For now, though, this idea is relegated to Sci-Fi books. I don't foresee it becoming a reality anytime soon.
Thanks, I'll check the book out. My first thought after submitting my last reply was that money is both the reason why we have the goods and services that we currently do and why a post-scarcity world cannot exist. In such a world, what incentive do people have to produce or give up their ability to profit from it in the first place?
I'm not defending a post-scarcity future (I think it's highly unlikely), however, people are not necessarily motivated purely by monetary incentives. Check out this video on the topic:
Here is Robert Gordon's essay, but I can't get his article. I too would love to see Krugman get bold about what coming changes might bring. Maybe we will see more of it from him. I do think that structural changes are looming, and becoming harder to ignore. There are probably some economists writing Nobel Prize-winning work at the moment, but we won't recognize it for some time to come. In short, I think it's anybody's guess, and it is going to make for some interesting debates.
That state of innovation does put is in a very tight position, but as long as people have jobs and they're buying businesses and services and new innovation keeps people keen on interest than there is always room for growth just not in certain sectors. Regulation will definitely have to be done in this event. It'll piss businesses off but its for the better of the people if we want to keep GPD growth up. The more spending the better.