Sectors of an Ultra-Tech/Bio-Tech economy

[whswhs]

Originally Posted by Brett

I considered rummaging through alien genomes for useful bits of nanomachinery to be more of a TL9 approach. In the Suite bioengineers understand genetics, biochemistry, histology, embryology etc. well enough that they can design what they want from first principles.

So do human beings still reproduce? Or if you want a child, do you have the child designed from first principles to have the traits you want, in somewhat the way that farmers now no longer raise crops from the seeds from last year's crops, but buy new hybrid seeds from agribusiness?

Conceivably human beings on advanced planets might even routinely be sterile, with their sexual functions used solely for social signaling purposes. Why bother giving them actual reproductive capabilities if they're not going to be used?

"The doctor brought your brother in his little black bag."

Bill Stoddard

[Agemegos]

Originally Posted by Fish

I have a tangential question for you about Ultra-Tech economy, Brett, concerning the value of human labor.

If a company were to use androids or bioroids as laborers — including the cost of production, housing/storage, training/deep learning, food/energy, medical/repair, and so forth, do you expect this would drive down the cost of human wages doing the same job?

Yes. It would tend to drive the [pure] wage rate for human labour down to the cost of feeding, housing, maintaining, and amortising a bioroid. If that is less than the cost of feeding, housing, and medically treating a worker and raising the worker's children then the population of labourers would be unable to maintain itself, and would wither away. If the government is beholden to the People, expect government intervention. If not, expect violence.

Misguided government intervention might consist of a ban or prohibitive tax on bioroids and other capital substitutes for labour. That would be subject to legalistic fooling with definitions, and to the extent it worked would tend to freeze economic development at about TL9.

A slightly less disastrous form of government intervention would be to tax the income of capital (including bioroids) and use the revenues to support the poor. This at best leads to an idle human aristocrats (probably behaving bizarrely to deal with ennui and feelings of purposeness) supported by the labour of bioroid slaves.

The is a counterintuitive possibility I call "Antithetical Communism" in which taxes on the income of capital are used to pay a wage subsidy. That allows humans to support themselves decently by working, while still competing with capital. Price effects will cause capital itself to be reallocated from labour-substituting forms to labour-complementing forms, leading to a more productive economy than is possible otherwise. (Though it is less economically efficient! It distorts the allocation of human time from leisure to labour. Output is higher, but welfare is lower.)

And then there are variants in which it is not the government but other social groups that effect the transfer of income from capitalists to others. But I won't go into those because they are characteristically Flat Black.

[Agemegos]

Originally Posted by whswhs

So do human beings still reproduce?

Some do, some don't. On Esbouvier they don't. On Tau Ceti most do. In Imperial Direct Jurisdiction the administration encourages it, though there are certain suspicions that the procedures are interfered with.

Conceivably human beings on advanced planets might even routinely be sterile, with their sexual functions used solely for social signaling purposes. Why bother giving them actual reproductive capabilities if they're not going to be used?

On Esbouvier the "people" are sterile, though there is a secret hack in their biochemistry that will turn them fertile again. This is installed because Esbouvier lost the tech to build exowombs once before, as a precaution against it happening again.

Imperial Servants have gamete samples collected and frozen during adolescence (or upon joining) and then are sterilised (though this is easily reversed). When they feel that their duty compels them to provide a new generation of Imperials they recover gametes from storage, produce zygotes, and have those genefixed and implanted. Multiple pregancies are common, and exowombs are available for fees. There is a tendency to produce children in large batches so that the whole thing of children interfering with one's work is over and done with.

[whswhs]

Originally Posted by Brett

A slightly less disastrous form of government intervention would be to tax the income of capital (including bioroids) and use the revenues to support the poor. This at best leads to an idle human aristocrats (probably behaving bizarrely to deal with ennui and feelings of purposeness) supported by the labour of bioroid slaves.

I think there is another option here: encourage the widespread, indeed the universal ownership of capital, including capital in the form of bioroid workers. Work toward a society where everyone has capital and the income from capital, and puts in their "work," not in labor in the ordinary sense, but in seeking out more productive uses of their capital.

After all, our society is permeated with the bias that income from labor is morally worthy and income from ownership is vaguely suspect and exploitative; but only a century ago, under the Edwardians, to be respectable you had to have capital and what we now call "unearned income," and to be really respectable you had to live on it and not labor at all. Of course, being a doctor, a lawyer, a minister, an army or navy officer, or an experimental natural philosopher wasn't "labor" by their standards. But think of an Edwardian utopia where everyone owns roboti and is a kind of "gentleman bioroid farmer".

Bill Stoddard

[Agemegos]

Originally Posted by whswhs

I think there is another option here: encourage the widespread, indeed the universal ownership of capital, including capital in the form of bioroid workers.

Yes. And not to forget capital in the form of recondite skills and vocational training.

However, capital is formed by the investment of savings, and savings result from an excess of income over expenditure. If you have an economy in which the pure wage rate is less than the minimum cost of subsistence, then a person cannot acquire capital without first having a grubstake of capital, which has to be transferred from someone else. In Flat Black there are some societies that depend on voluntary transfers (eg. children being grubstaked by their parents) or transferred through other social structures (ownership of capital by troops on Seeonee, or by matriclans and lodges on Margulis), but there are also ones in which the government has helped itself to the power to effect these capital transfers. It is fairly common for the grubstake to include an endowment of free vocational training, but apart from that it is uncommon for the government to make the transfer with no strings attached. In their charmingly paternalistic way governments prefer to keep the capital and hand over only the income, or to leave the capital in the hands of nominal owners, tax the interest, and transfer that income.

I never meant this setting to be a utopia.


Anyway, we're drifting off topic again. This is supposed to be a discussion of the industrial classification of ultra/bio tech, not of my setting.

[whswhs]

Originally Posted by Brett

Anyway, we're drifting off topic again. This is supposed to be a discussion of the industrial classification of ultra/bio tech, not of my setting.

(a) I don't see how I'm supposed to understand the industrial categories of your setting if I don't know its economic logic.

(b) If a major source of income on many planets is the profits earned on capital, then it seems that a major industry would be the active search for more profitable uses of capital. You might have an entire industrial sector that does nothing except evaluate productivity, fund startups, and transfer funds to new places.

(b) If you count "human capital" as capital, and its earnings as profits on capital, then of course you're going to find that wage rates are below subsistence costs. That's true even now, and it more or less has been true since the great migration from rural to urban in the Industrial Revolution. But I think that nearly everybody in your imagined society is going to be a highly trained specialist (or an even more highly trained generalist) who earns many times the pay rate for unskilled labor, and thus has enough income to afford capital in the more traditional sense of "physical capital." And I don't see that it will take government investment to bring this about; anyone who takes the trouble to have a child will have a strong motive to see that they get the schooling to earn more than it takes to support them.

(c) On the other hand, you could have a more eloi situation, where ownership of sufficient capital is so widely dispersed that "person who doesn't have enough unearned income to live comfortably on it indefinitely" is at least as unusual statistically as "person who has no job and can't find one" is today—or perhaps even rarer than that, maybe several times as rare. People might still "work," but they might work on long-term, high-risk ventures, like creating art—and having one in a thousand, or one in a million, artistic projects catch on and make the creator not just rich but RICH!!!—or working on radical new design concepts for pharmaceuticals, or organisms, or designs for children, or planetary ecosystems, or something else biological. Maybe ninety-nine percent of work in some sectors is done at a loss, but the other one percent is so incredibly profitable that it keeps everyone else hard at work.

(d) On the other other hand, what about criminal industries? Is there a planet that supports itself entirely by running new versions of the Spanish prisoner and the badger game? Or perhaps by proving game theoretical theorems about which new cons can pay off optimally and get past everyone else's fraud detection software?

Bill Stoddard

[Agemegos]

Originally Posted by whswhs

(a) I don't see how I'm supposed to understand the industrial categories of your setting if I don't know its economic logic.

Fair enough, though I did rather hope that the question might be answered in slightly more general terms. "How can ultra-tech and bio-tech products be sorted into about ten categories that are industrially similar?"

(b) If a major source of income on many planets is the profits earned on capital, then it seems that a major industry would be the active search for more profitable uses of capital. You might have an entire industrial sector that does nothing except evaluate productivity, fund startups, and transfer funds to new places.

Finance and banking, in short. I'll give that careful thought. It seems possible that they might have an efficient scale small enough to have a financial sector on each planet and no further gains to be made by co-locating them. On the other hand financial centres in Florence, Amsterdam, London, and New York have been robust over many changes of tech level.

(b) If you count "human capital" as capital, and its earnings as profits on capital, then of course you're going to find that wage rates are below subsistence costs. That's true even now, and it more or less has been true since the great migration from rural to urban in the Industrial Revolution.

Well, I guess the shelf-stackers and checkout operators in the local supermarket need to be able to speak and understand English, read, and make change.... And of course our wage rates are probably some way above equilibrium, too.

But I think that nearly everybody in your imagined society is going to be a highly trained specialist (or an even more highly trained generalist) who earns many times the pay rate for unskilled labor, and thus has enough income to afford capital in the more traditional sense of "physical capital." And I don't see that it will take government investment to bring this about; anyone who takes the trouble to have a child will have a strong motive to see that they get the schooling to earn more than it takes to support them.

Figures given in GURPS Ultra-Tech imply that robots costing under $100,000 will be able to do the work of well-trained specialists. There are no figures given for service life and running costs, but you would have to make heroic assumptions before a spaceship mechanic could make a living wage.

(c) On the other hand, you could have a more eloi situation, where ownership of sufficient capital is so widely dispersed that "person who doesn't have enough unearned income to live comfortably on it indefinitely" is at least as unusual statistically as "person who has no job and can't find one" is today—or perhaps even rarer than that, maybe several times as rare.

I have some societies like that. They got how they are through the poor being unable to raise enough kids to replace themselves, and generational providence is as important there as it was for the gentry in Jane Austen. Those economies however tend not to be as productive as ones in which government incentives distort people's behaviour towards feverish industriousness.

(d) On the other other hand, what about criminal industries? Is there a planet that supports itself entirely by running new versions of the Spanish prisoner and the badger game? Or perhaps by proving game theoretical theorems about which new cons can pay off optimally and get past everyone else's fraud detection software?

Interesting. Would such an industry need planetary scale to achieve minimum efficient scale? It seems like the sort of thing that would tend to attract itself to a slightly backward planet, like a Caribbean tax shelter. But perhaps the same issues apply as in the rest of finance & banking.

[whswhs]

Originally Posted by Brett

Finance and banking, in short. I'll give that careful thought. It seems possible that they might have an efficient scale small enough to have a financial sector on each planet and no further gains to be made by co-locating them. On the other hand financial centres in Florence, Amsterdam, London, and New York have been robust over many changes of tech level.

Certainly each planet would have to have a local financial sector, just as 19th century American agriculture had local banks that loaned farmers operating funds during the year, acquired and sold their crops, and paid out the excess of the Account Payable as hard cash—and needed an influx of hard cash in harvest season. But there would also be the equivalent of the British banks that financed the North American rail system. The banking planet might do things like sizing up which planet was ripe to move up into the upper tier and lending it capital for the conversion.

Incidentally, I'm sorry this is not going directly to where you want, but I'm having a lot of fun with it as a thread. It's one of the most interesting topics I've seen here in quite a while.

Bill Stoddard

[Agemegos]

Originally Posted by whswhs

Incidentally, I'm sorry this is not going directly to where you want, but I'm having a lot of fun with it as a thread. It's one of the most interesting topics I've seen here in quite a while.

I'm glad to amuse, but I'm slightly concerned about boring the public at large with blather about my setting. I fear that if this thread becomes too FLAT BLACK-centric and too deep into speculative economics it will repel suggestions from readers such as Fish who find Flat Black irrelevant and economic technicalities bewildering.

[Fish]

So, Brett, do you have enough suggestions from this thread to put together a preliminary first draft of the world as proof-of-concept? At this point, I think it would be helpful to see a list of what you're going to use thus far. From that we'll be able to see which gaps still need to be filled in. Or, if I'm suggesting things along the wrong lines, then at least I'd know what else you're looking for.