“In the future, [the human species] will refuse to put themselves at the service of pirates. They will become what I call transhumans – who will give birth to a new order of abundance” ―Jacques Attali.The French philosopher and economist Jacques Attali* predicted in the 1970s that the music industry would collapse. Within twenty years, he was basically proved right. If something is freely or cheaply replicable, then economic theory predicts that its value will trend towards zero. Ever since we were able to record our friends’ vinyl LPs on cassette, the ability of musicians to earn a living from recorded music was doomed – and so it turned out to be. Musicians today earn less and less from selling recorded music. I myself, as a writer, am acutely aware that it is getting harder to make a living, even in a world where people are reading more.
Now Attali is making the same predictions about manufactured goods. 3-D printing, while it still is a relatively new technology, opens the door to being able to scan a wide variety of objects into a 3-D printable file and e-mail it. Many manufactured products may become infinitely reproducible, their value trending towards zero. It has already been done, if only experimentally. We already have 3-D printed musical instruments, camera lenses, weapons – even 3-D printed refrigerators and cars. It isn’t inconceivable that we all will be able to upload 3-D printable files for such items which we can print at home and assemble Ikea-style. We could then tweet the link so that everybody else can have one.
At first glance, this all sounds as though it represents an impressive technological advancement. But actually, in an important sense, it is anti-technological – just as music streaming is anti-creative. The incentive to invent a better refrigerator or car is to make money. But if, as soon as you have done so, the value of the inventor’s work trends towards zero, then all hope that the inventor has of making money evaporates. So what is the point of innovation?
We like to think that people will continue to create and to innovate for the love of it – like inventing a new music genre. But I remember a time (not so long ago) where all waiters and bar tenders in New York City were aspiring actors, musicians, or artists. They could survive on three shifts a week and devote the rest of their time to their creative pursuits. But today, it takes six shifts to support subsistent living in a dingy bed-sit – so all those creatives have disappeared. I would like to think that they went to another, better place, but I see anecdotal evidence instead that many of them were forced to take menial office jobs.
If most forms of creative output (artistic or manufactured) will eventually become valueless in economic terms, then the economic constraints upon consumption will evaporate – as has already happened with music. But then so will all the manufacturing jobs that create that stuff, and so will the artists and inventors. In fact if we look at what is going up in value, not down, it is mostly what is not infinitely replicable, like land. The cost of education is currently going up, but this could sharply reverse through the rise of Internet education. Fossil fuels were becoming cheaper as we became more effective at extraction, but this already is understood to be a passing phase.
There is something else on planet earth that is infinitely and cheaply replicable – and that is humans. During my lifetime, the population of humans on this tiny planet has doubled. And if I survive into my eighties, it will treble. If something is freely and infinitely replicable, then in purely economic terms its value will trend towards zero. And that is precisely what is happening across the world.
The value of unskilled labour is trending towards subsistence wages – and in a globalised world, nations that value human rights are powerless to protect unskilled workers from the market forces of labour in countries far away, that have too many people doing jobs of declining worth. Real wages, even of American workers, have declined as their productivity has increased**. And this divergence of wages and productivity started in the 1970s, just as economists started preaching the value of globalisation. In the developed world, we have been trying to resist this trend, by pouring resources into education – attempting to ensure that we have no unskilled workers. But this post started by explaining why the value of the output of skilled creatives, too, is trending towards zero. This strategy only seems to defer the inevitable.
The logical conclusion is that, while people's labour will have little value, there will be few economic constraints on the consumption of products which cost little to produce. And while increased productivity should reduce the need to work, that is not the experience of the workers, who everywhere are working harder just to stand still. Even if – playing devil’s advocate – we argue that goods cost little to produce but that the cost of raw materials will offset this, it so happens that commodity prices are universally declining too.
We need to ask what this means for the future of humankind. But first, we need to ask what it means for the future of economic theory. It occurs to me that most economic theory doesn’t work in a world where there is an infinite supply of everything and therefore everything costs nothing. And if everything costs nothing, money no longer works as a means of allocating access to resources. This sort of argument isn’t trivial, and economists are currently debating different forms of the same thing: they worry about what happens when the conventional tools of economic management (among them, fiscal and monetary policy) simply stop having the effect that they used to have. Some governments have already tried negative interest rates after an interest rate of zero was found not to be low enough to stimulate growth and recovery from recession.
One way to escape this death spiral, where ultimately the planet may have billions of economic migrants, is to abandon the idea that all decision-making should revolve around money. We need to stop thinking about the monetary value of labour, and start thinking about the intrinsic and emotional value of a human life, and how this may be safeguarded and guaranteed. A good place to start is to consider how much consumption would optimise a human life. Bearing in mind that the advertising industry has been pummelling us with propaganda as to how consumption enhances our emotional wellbeing, it seems likely that we need a lot less consumption in reality than most of us think. Then we can start to consider how much consumption this planet can support. And then it becomes easy to compute how many humans we can fit on this planet before it bursts.
If economics is going to have any role in working this all out, then it is going to have to go cold turkey on its addiction to converting everything to monetary value before it can even think about it. Interestingly, we have seen powerful trends in this direction, reflected no less in the recipients of the Nobel Prize in Economic Sciences.
* Sam York. The Pop Star and the Prophet. bbc.com. 17 September 2015.
** Gillian White. Why the Gap Between Worker Pay and Productivity Is So Problematic. The Atlantic. 25 February 2015.