Arnold Kling  

Economics of Nanotechnology

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If the nanotechnology revolution takes off, what will be the economic consequences? Brad DeLong proposes this analytical framework:


  • What commodities--what goods and services--become extraordinarily cheap as a result of the technological revolution?

  • What human activities--what jobs and skills--become key bottlenecks, and thus become remarkably valuable and well-paid?

  • What risks blindside the society as the technology spreads?

  • What risks do people guard against that turn out not to be risks at all?


I think that it is difficult to predict what could become cheap. The problem is that so much of our economy is a service economy, so that the interesting question is what services might become cheap because of better and cheaper materials. Brad says that people who service and maintain stuff could lose their jobs as products become self-maintaining. But I don't think that's a big component of the economy.

Maybe transportation service could become really cheap. Imagine if the cost of trans-Atlantic travel falls to the cost of a trans-Atlantic phone call today.

Brad proposes that a "choke point" could be technologists educated well enough to manipulate materials. That could be. However, it could turn out to be that we don't all have to learn how to do nano to use nano, just as we don't all have to learn how to build computers to use computers.

For Discussion. Will economic issues lose their importance if the nanotech revolution succeeds?


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COMMENTS (24 to date)
David Lloyd-Jones writes:

For economic issues to vanish their component, scarcity, would have to vanish.

Since scarcity is produced by desire, there is no technoloical threat on the horizon.

Steve writes:

Will economic issues lose their importance if the nanotech revolution succeeds?

No. Unless nanotech is going to result in some sort of unlimited supply of resources.

LudditeSteve writes:

Hmmm....Why hire a human when a machine can do everything the human can do?

When machines can do everything a human can do, and can do it cheaper than a slave in a chinese prison camp, we will be in deep trouble regardless of our "desire" or "scarcity of resources".

Perhaps we can all become hair stylists. The only reason people still use them instead of the home clipper kit is the human interaction.

Eric Krieg writes:

Nanotechnology is BS. It is futurist hokum.

People are WAY overselling this technology. I will beleive it when I see it.

For example, how on earth (or above earth) is nanotechnology going to make transatlantic travel as cheap as transatlantic communication? What is the mechanism?

How are nanobots going to self replicate?

A lot of this nanononsense results from an assumption that these things are going to have some kind of intelligence. With the state of AI at this point, that is just a foolish assumption.

David Thomson writes:

A far more important question comes to mind when reading Brad DeLong’s comments: how does he justify remaining within the Democrat Party? Its activists are luddites to the core. It is fair to say that Democrat politicians may be the greatest threat to our economic future. Oh well, perhaps he can do some good by changing it from the inside---even if this is most unlikely.

“Since scarcity is produced by desire, there is no technoloical threat on the horizon.”

Human beings inevitably raise the bar. They are never satisfied and increasingly desire even more material satisfactions. I have yet to read Gregg Easterbrook’s new book, The Progress Paradox: How Life Gets Better While People Feel Worse. Still, I think it's safe to guess that I substantially agree with him on this issue.

Eric Krieg writes:

>>how does he justify remaining within the Democrat Party?

Simple. The Democrat party is the party of people who think that they are smarter than everyone else, and thus, should be in charge.

When you get a Democrat foaming at the mouth with vitriol directed at our President, you hear contempt for Bush's intelligence and the fact that he was born with a silver spoon in his mouth. It just incences these people that someone as INFERIOR as Bush could get to be President.

This is why the NPR crowd and academics are all Democrats. Intellectuals are authoritarian, and thus are a natural fit for the Democrats.

LudditeSteve writes:

Eric--

Something tells me you've been waiting to use that diatribe for a while, eh?

Come on, nobody says Bush is stupid, the guy went to Yale.

We just want jobs for everyone and we have a different and better way of doing it. Giving all the funds to rich people and "hoping" that they'll hire people in the US with it is not the best way for Economic growth. Investing in infrastructure and education and giving people hope for future economic happiness is.

Lawrance George Lux writes:

Every technology advance creates it's own set of environmental and social problems. Economic Issues only magnify with increase of Population and Technology.

Previous messages describe contempt for Democrats, of which I am not one, but need to be explored in the context of Nanotech. AI becomes a extreme problem in itself. Production traditionally introduces a certain percentage of inferior product; which with AI and self-creation, would prepetuate itself. Such Nanotech means continuous creation of new Nanobats to seek out and destroy inferior Nanobats; the Nanobats coming to resemble Viruses of human health. Return to the tirade against Democrats asks; what do you do with defective Republicans, without a counter-organization like the Democrats. lgl

Eric Krieg writes:

>>Come on, nobody says Bush is stupid, the guy went to Yale.

He only went to Yale because his daddy got him in.

Ditto for his Harvard MBA.

He got to where he is today because of his connections, not his intelligence or other skills. So says the Bush-haters.

Nobody says that Bush is stupid? Where do you get that from? Are you living in an old nuclear missle bunker or something?

Micheal Moore wrote a whole book about Bush's stupidity! "Stupid White Men".

I watched Moore on Book TV this weekend. The guy shouldn't be calling anyone stupid. He is about as smart as he looks.

Anyway, if I'm wrong, explain to me why so many white, educated, rich people are Democrats.

Socioeconomically, they should be Republicans. But the authoritarian streak of the Democrats, the ability to tell people WHAT TO DO (don't smoke, don't drive SUVs, have safe sex, etc.) is what attracts them.

Eric Krieg writes:

>>Come on, nobody says Bush is stupid, the guy went to Yale.

He only went to Yale because his daddy got him in.

Ditto for his Harvard MBA.

He got to where he is today because of his connections, not his intelligence or other skills. So says the Bush-haters.

Nobody says that Bush is stupid? Where do you get that from? Are you living in an old nuclear missle bunker or something?

Micheal Moore wrote a whole book about Bush's stupidity! "Stupid White Men".

I watched Moore on Book TV this weekend. The guy shouldn't be calling anyone stupid. He is about as smart as he looks.

Anyway, if I'm wrong, explain to me why so many white, educated, rich people are Democrats.

Socioeconomically, they should be Republicans. But the authoritarian streak of the Democrats, the ability to tell people WHAT TO DO (don't smoke, don't drive SUVs, have safe sex, etc.) is what attracts them.

LudditeSteve writes:

Why are we democrats? Because we realized that opening our minds won't cause our brains to fall out.

There is no ONE RIGHT ANSWER to everything. Dems are right on some things (economic), GOP is right on other (social). It just depends on whether outlawing abortion is worth having your job outsourced to India or not. It's not worth it to me!

Eric Krieg writes:

>>AI becomes a extreme problem in itself.

AI is the nanotechnology of Arnold's generation. 20 years ago, people were making all kinds of futurist predictions about what AI was going to be able to do.

And it was all rubbish. AI is no more advanced today than it was then. All the money invested, all the reasearch done has resulted in NOTHING that was predicted.

The same will be the result of nanotechnology.

I am particularly skeptical of using "evolution" as an engineering tool. Anyone who thinks that nanobots are going to compete with one another and somehow evolve is jus talking crazy talk. Once again, I will believe it when I see it.

I remember 10 years ago people talking about evolutionary engineering processes and how it was going to eliminate the need for engineers.

I'M STILL HERE! AND I WILL BE ON THE JOB TOMORROW, AND FOR A LONG TIME AFTER THAT!!!!

We need more skepticism in this world.

David Thomson writes:

“We just want jobs for everyone and we have a different and better way of doing it. “

A planned economy does not produce new jobs. On the contrary, all of the existing empirical data strongly argues that the exact opposite occurs! It is inherently impossible to rationally create a utopian economy. Even those with a hypothetical IQ of 500 lack the intelligence to accomplish such a goal. The complexity is too overwhelming for even the greatest minds to comprehend.

“Giving all the funds to rich people and "hoping" that they'll hire people in the US with it is not the best way for Economic growth. “”

Capitalism is premised upon rational self interest. We do not rely on the benevolent feelings of rich people, but their desire to improve their own lot in life.

Lastly, I am convinced that LudditeSteve represents the dominate thinking within the Democrat Party. He is definitely not a marginalized voice! It’s time for the Brad DeLongs and James Fallows’ to wake up to reality. The Bill Clinton of 1992 would not stand a chance of winning his party’s 2004 nomination.

LudditeSteve writes:

See, the problem with giving the money to the rich is that they won't hire americans anymore. It might have worked in the 80s, but that's when they hired Americans.

Eric Krieg writes:

>>Why are we democrats? Because we realized that opening our minds won't cause our brains to fall out.

Yeah, Democrats are SO open minded. That's why our universities are such bastions of free speech.

Yeah, the phrase "political correctness" never comes to mind when thinking about Democrats. That's why Dean can talk about getting the votes of "guys with Confederate flags on their pickup trucks" without being attacked by his fellow Presidential candidates.

Democrats are about as open minded as the Branch Dividians. Cult like is more like it.

Eric Krieg writes:

All nanotechnology is good for is a plot line in science fiction stories.

Yeah, I'd like to help Seven of Nine work on her nanotechnology!

The Republican candidate for Senator here in Illinois is Jerri Ryan's ex-husband. I would never vote for a guy that would divorce a chick like that!

Bob Dobalina writes:

"how does he justify remaining within the Democrat Party?"

Ever read Sowell's "Vision of the Anointed"?

"There is no ONE RIGHT ANSWER to everything. Dems are right on some things (economic), GOP is right on other (social)."

Oh, great, Steve's a statist.

Ever read Hayek's "Road to Serfdom"?

LudditeSteve writes:

No, I have read neither of those two books, bob.

Think about it, boys:

There must be SOME reason that a lot of smart folks who are NOT OF MEANS who are anti-free trade and are (to some extent) Luddites. They are people like me who have learned from the school of hard knocks after going through college and grad school only to discover all the jobs GONE either by offshoring or technological change.

You need to open your minds and realize that there is more than one answer to all economic questions. That's why Economists have two hands, not just one. (Yes, I know, Krugman lost one of his hands according to The Economist, but in his heart he knows there are two sides to each Economic argument).

Yes, handing money over to the rich will eventually cause employment to rise. The rich need people to wash their cars, mow their lawns, entertain them, and bathe their children. Yes, having the government spend the money on roads, defence, and scientific research will cause employment to rise. These activities create jobs that have value such as scientists, teachers, and construction workers.

Two sides to every economic argument, no? I know which side you guys are on and I understand that. Please try to understand and respect the side I am on and the side that a lot of "compassionate" social conservatives are on.

Lawrance George Lux writes:

Both Republicans and Democrats are wrong in how to promote economic growth. Effective alteration of Tax Policy is the only means to incite real economic growth. Now for the personal plug: I am publishing a new work sometime next year, called 'Simplified Tax System: A Counterculture Proposal'. It is now in the editing phase, I hope to get it to iUniverse by the end of the year. It attacks the whole problem. lgl

dsquared writes:

Anyone who thinks that nanobots are going to compete with one another and somehow evolve is jus talking crazy talk.

I think Eric is wrong on this; nanobots could in principle compete with one another and make use of "evolutionary" design improvements, and we should thus be expecting useful and interesting developments in this field sometime between 200 million and a billion years from now.

Eric Krieg writes:

D^2:

Touche.

What's the expected ROI for that time frame?

Eric Krieg writes:

I just went back and skimmed the DeLong column. I don't think the guy even knows what nanotechnology is. It is speculation based upon ignorance.

Monte writes:

"Will economic issues lose their importance if the nanotech revolution succeeds?"

Economic issues may undergo paradigm shifts, but they never lose their importance, microcosmically or otherwise.

X writes:

Most of the nanotech being talked about now is more of the new materials and electronic component that are built at the nanometer scale. Carbon nanotubes for instance do have a lot of promise for revolutionizing electronics and materials. Nobody expects nanotech like molecular manufacturing for a very long time if ever.

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