Economic Analysis of the Nanotech Future

nweaver writes "Economic Historian and Berkeley Professor Brad DeLong has created an analysis on his Web Log on the economic implications of Nanotechnology. His observations are based on what previously happened with the Industrial Revolution (and other economic shifts in general) and using this to speculate what Nanotech will do to the economy: who wins (technical/knowledge workers), who loses (manufacturing), and what changes (costs of products)."

Raises interesting questions

If, in the future, copying physical objects is nearly as easy as copying information on a computer, will corporations lobby to pass laws that make it illegal to do so? In other words, will I be arrested one day for making a copy of my friend's Ferrari?

Re:Raises interesting questions

Well you can always just copy your friends money and then just go buy your own. But I guess they might make that illegal too.

Re:Raises interesting questions

Yes, but in such a world would we really have a need for money anymore?

Re:Raises interesting questions

Well, that would be a big problem. I always wonder, in Star Trek, where there's no need for money because everybody has a replicator, who cleans the toilets in public restrooms? There are some really, really, dirty disgusting nasty jobs out there, that nobody would do, if it weren't for the fact that they were willing to do it for money. If, in the future, you can make anything you want for what is essentially "free" (I know it still costs energy and the initial matter, but I'm assuming those costs are trivial) then how are these really, really undesirible, but necessary, roles in society going to be filled?

Re:Raises interesting questions

Cory Doctorow takes an interesting look at this question in "Down and Out in the Magic Kingdom". He posits a post-death, post-scarcity society and solves the problem of who does the dirty work via the mechanism of 'whuffie'. He explains it better thru the novel than I could ever summarize. It's also available for free at http://www.craphound.com/down/

nanotech has a big future....

i have worked a bit in the field of nano-decorated surfaces. it is impressive that one can make little nano-sizes arrays of magnetic dots on some substrate . this as so small, that one can view them as single particles which switch homogenously. hence you can study the interactions of little magnetic particles in arrays and do experiments which are very close to theoretical models, such as the Ising model. why should you care? because this nano-patterns seem to be interesting for exchange biased systems. and these seem to be interesting for the recording media industry. but why should you care... this is too geeky anyways. this guy (AKA Prof. Kai Liu) [ucdavis.edu] at UC Davis does some interesting research with nanostructures... cool pics and some explanations...

interested in nanotechnology?

If you want to know more 'bout this nanotechnology that everyone's talking about: Institute of Nanotechnology [nano.org.uk] and National Nanotechnology Initiative [nano.gov]

Hmmm...

Could we be on the road to a post-scarcity society in the future where nobody is without the basic human necessities and most work is done for recreation or hobby purposes only? Could be, yet for some reason I think our nation's current Corporatocracy wouldn't look kindly on such blatant "communism."

Sorry, we discussed most of this yesterday

It was a decent article, but if it was included in discussion from yesterday I wouldn't mod it past a +4 Insightful (but someone would), it kinda feels like a long somewhat rambling slashdot post. His conclusion (almost out of the middle of nowhere) was that we need to "improve" education in this country, but no details on what needs to be done. Thrown in is this comment (which would surely get a reply on SlashPolitics): "America is, after all, the only society that does not define its citizens substantially in ethnic terms.". Yea, I wave my flag around a little too much for some, but even I know that is certainly not true, and maybe even a little bit of flame bait (kinda like this comment).

The future implications of nanotech...

...are very very tiny.

Licencing

will have to become far more important if people are to hold onto any profit margin, surely. If I can "read out" the program to create "the crown jewels", or download it from the net, and replicate it down to the atomic level - what's the difference...

I guess the only fundamental problem is: what manufacturer of nano-bots is ever going to let the bots re-create themselves ? If they do, they'll spread like wildfire, and all manufacturing everywhere will become more like programming...

Simon.

This is the wave of the future

I think that the idea of artificially enhancing ourselves with technology is the right approach, but the BORG technique of implanting high-tech computerized devices seems the wrong approach. Basically, this would open up our very bodies to hackers. By now we should all be aware how very difficult a problem computer security is. Personally I feel that computers and networks can never be made secure, and thus we should stop trying. Just imagine the inevitable result when some black-hat cracker breaks through the encryption protecting your enhanced liver, and proceeds to turn it into 'reverse', whereby it spews toxins into your bloodstream? Compound this with the fact that probably our bodies will be running Microsoft operating systems, and you see why this is the wrong approach.

The correct way to enhance ourselves is the technique outlined by Science Fiction Author Larry Niven. In variou Niven novels and short stories, the characters can live for hundreds of years by means of organ banks. If you lose an arm, use nanotechnology to put on a new arm. Of course, this will require two developments: improved nanotechnology, and the development of organ banks for all body parts. Probably this will lead to the death penalty becoming the standard punishmnent for every minor crime, so as to keep the organ banks full of fresh organs, allowing rich people to live forever at the expense of everybody else.

I hope this happens within my lifetime, as it is a Utopian scenario indeed.

Interesting . . .

He provides an interesting framework for analyzing the issue, but I don't know that I agree with his conclusions that nanotech will increase the demand for highly-educated labor, thereby increasing income inequality. I think any shifts in income equality will come from a straight loss of manufacturing jobs rather than an increase in the need for educated workers. If nanotechnology is to be economically feasible, it will have to rely on automation to the same or a higher degree than current manufacturing techniques. Other than R&D, there won't be any need for more education, because extra schooling is probably more of a liability than an asset when it comes to running a machine on an assembly line.

This is also analogous to the technological revolution, because a much higher number of workers were left unemployed by the increase in productivity than moved to the cities and became factory workers -- witness the enormous social turmoil at the turn of the century. The relatively higher American education levels probably had a much greater impact in the service sector than manufacturing 50-100 years ago. Although level of education has picked up somewhat in the last decade or so (concurrent with America's resurgent dominance in non-military technology), compared to other industrialized countries American education below the college level simply sucks.

Education Straw man

Since education solves so many problem's concentration on education is not a good argument. Next since he mentions specialized skills there is also a huge retraining problem even for "educated" workers as the technology shifts. Finally I think most people looking at nano-tech miss the most important factor. With it "intelligent" computers are possible. The impact of intelligent machines must be included in any analysis and probably represent and even bigger "shift" than nanotech itself. On that note there is no reason for the training of the human brain to remain stuck in methods developed thousands of years ago. Agian with nanotech and smart computers there is no reason we could not "upload" new skills as needed. Forget about nanotech think about the impact smart machines and programmable humans. Nanotech is just enabling technology.

Very, very interesting.

I found the commentary following Delong's essay to be as worthwhile as the original text. Stephenson's The Diamond Age plays out some of these ideas in more detail, for those interested in possible ramifications of nanotech.
That fraction of the /. readership who haven't already may enjoy that as well. (I did.)

Nanotech is XXIst century AI

Just think about this for a second: Alan Turing created his famous test in... what? The 1930s? The 1950s? How many computers have you seen that could pass the test? Simple answer: none.

How many computers have you seen that actually could perform what HAL performed in "2001: A Space Odyssey"? Simple answer: none.

Scientists have been talking about NanoTech for what? Twenty+ years [about.com]? Have you already seen an application of NanoTech in real life? Where are the real-life NanoTech billionaires? Where is the Bill Gates of nanotech?

I believe that nanotech, just like AI and superconductivity, is a pipe dream. This is simply because solving the technical/scientific problems are simply too large for our current technology.

Don't misunderstand me: nanotech can be useful. Dumb computers are useful right now. Things like micro-mechanical machines may be useful. Limited, one-task-only, expert system can be useful. But real intelligence? Real nanotech? I don't think so.

Re:Nanotech is XXIst century AI

The potential benefits of superconductivity are very large. Take New York city, for example. Some months half the electricity they buy is used pushing the other half across hundreds or even thousands of miles of high-tension lines. What would be the financial benefit of saving 50% on your electric bill for the entire city of New York?
Superconductivity is a pipe dream, in that even that absolutely enormous potential savings, multiplied by all the similar situations elsewhere in the world, isn't motivating anyone to build a working superconducting transmission system and save that enormous amount of wasted power. If it's feasable, why hasn't a demand that large produced a result? The theoretical benefits of superconductivity certainly ARE large enough to matter - ergo, the limitation must be practice, not theory.
As a lesser example, Superconducting Magnetic Levitation was supposed to enable a generation of high speed trains that could compete with the aircraft industry. The Japanese just set a train speed record of 585 Km/h. They did it with a non-supercoducting system. Why did they do it the "hard way", if superconducting technology is more than a laboratory curiosity?

Most interesting comment from the article.

Hey, its from the article so its ontopic!

" One of the chief things that has made America great, after all, is that we are the only country in which enthnicity is not closely linked to nationhood. "

Only? What about Canada? What about Brazil? And I'm sure that others can provide better counter-examples.

Nano-insight

Once you read the article, you see there's surprisingly little insight at all, really. The only conjecture on the nanotechnology-driven economy is that there will likely be a scarcity of workers with the necessary skillset, enabling them to earn major $$$ unless the pool of talent increases through either domestic or international education and training.

I would also argue that much of his point regarding the displacement of current workers is well underway. Miniature, communicative sensors already enable industrial equipment to constantly optimize its own performance [alfalaval.com], reducing the need for manual maintenance and repair work. Warehouse technology is already available to minimize the number of workers needed to move product, especially with the coming of RFID.

In short, I think the more interesting area for discussion lies in which types of products are likely to be displaced by oncoming nanotech, and which are likely to become more in demand (such as the rise in the price of titanium, driven by a wave of Tiger Woods-inspired golf newbies). Hopefully we'll see some followup on those points...

Economic forecasts

The fact that America, like every other developed economy, is going to have to rely more and more on a highly educated workforce is not a particularly novel forecast, but is a good topic for hand wringing. On the other hand, the implications of better and cheaper materials for manufacturing might produce a more optimistic view as it rolls through the manufacuting sector, lowering costs, creating jobs etc. Indeed, to the extent that manufacturing using these materials requires skills beyond those found in the third world, it might lead to new manufacturing jobs (or, of course, it might not, this is all complete speculation after all)

Oh, and on that note I'm surprised that no one has yet commented on the boldness of this economic forecast going as far out as this when the record of economists getting it right one or two quarters down the road is mixed (for example the IT recovery that has been a rolling two quarters away since 2000).

IT industry != nanotech industry

From article:

If information technology caused a sharp upward leap in the skill- and education requirements of the labor force that has caused a large chunk of our upward leap in income inequality, is not nanotechnology likely to do the same? And is not the pace of economic growth--the spread and use of nanotechnology-generated materials--likely to be constrained by a shortage of the highly educated and skilled materials technicians and programmers that we will need?

I believe that the answer is no

Most people in the IT industry have the job of creating custom solutions for specific customers. The tasks range from the very difficult to the very simple, and therefore the IT industry can employ a work force with a very diverse skill level.

In this respect the so called nano tech industry is very different. The development of a high tech product is very expensive, snd therefore each company has to focus on a small set of products. On the other hand they can sell each product to a wide range of customers. This calls for a small but specialized work force.In conclusion nano tech will not employ the same number of workers with lesser skill.

Fundamental issues why nanotech won't work.

I previously asked this question (as anonymus coward); How are you supposed to power these things? And got some very good answers. You can't have them lugging around with batteries (they wouldn't be very nano, wouldn't last long and you'll just have to pray that they can find their way back to the loading station to recharge successfully). Submerging them in fuel already has it's own term, "grey goo", at that scale imperfectons will cause "mutations" that just might go amok; How would you monitor that? Nanotech only seem to be usable when either connected to a larger machine and thus not really nanotech only machinery with some very small pieces, or small scale controled, one off experiments not industrialised mass production.
(You'll just have to search for the original thread by yourself, great karma whoring op, and yeah, big thanks to all those who provided great answers, i really wondered about that one)

-Don't trust smart paint!

What about Canada?

"America is, after all, the only society that does not define its citizens substantially in ethnic terms."

Frontiers and Nanotech

I would suggest the conditions in Britain were largely due to the closing of the American frontier in the mid 1800's. Until that point, there was a floor under wages(i.e. British industrialists couldn't pay their workers so little they didn't bolt and risk death and disease on the frontier). The point here is that the order in which advancements move towards nanotechnology are quite important.

I would also suggest folks look at the Nanotechnology timeline [slashdot.org] Sean Morgan did. Best estimates are this will unfold the next 20 years or so. The nice thing about Morgan's work is that he talks about some of the incremental advancements between now and then.

in societies w/o scarcity, better ideas can't win

in a society without scarcity the better idea newer wins.
you can apply this to probably any venue of life.

you can apply this to a lot a managers now. many managers are only good at one thing: the corporate power circus.
they don't need to be the best when it comes to manufacturing, since we today already have enough resources to permit waste. they're good at elbowing. why isn't this behavoir even worse? because results ultimately still count. and results depend on scarce resources and their efficient allocation.

as soon as this changes the economy is going to start filling up with nutcases and crackpots claiming to be as good at whatever as the serious people.

you can apply this concept to any field where results aren't quite measurable and resources aren't scarce.
example: religion, cults and esoterics.

too religious/spritual?
2nd example: how about the qualitity of programming in closed source projects, eh?

MMAA

As always with new technology threatening old business models expect the formation of Macroscale Manufacturers Association of America. They will furiously fight against communist nanotechnology allowing people to make unauthorised devices etc.

rrw

Wow, how profound (not)

Rush right over and learn about automation reducing costs and demand for labor. What insights! As for nanotechnology, DeLong seems to offer nothing more useful than a shrug.

What about looking to "cyberspace"?

If we want to foresee what might happen when the effortless duplication of matter becomes ubiquitous, why not look at a similar situation right now? With computers we can infinitely, and at pretty much no cost, reproduce "things", perhaps in a similar manner to what we might be able to do with real things in a few decades. I imagine we might have much the same problems once we are able to duplicate matter as effortlessly as we copy a file: the vast majority wanting the freedom to copy what they want, and the rich minority fighting to hold on to the power they have.

Freudian Slips While Reading

The filters between my eyes and brain might be trying to tell me something.

At first glance I read "Economic Analysis of the Nanotech Failure". I'm not sure if it was trying to say Nanotech is going nowhere, or that the grey goop effect will make pollution look like a spot on one's trousers by comparison.

For my part, I'm not really thrilled by Nanotechnology. It's like being thrilled by quantumn mechanics. Sure it's neat, but unless you are a researcher it's not going to be used in anything you buy, build, or are likely to use. Oooo, it will make already small computer chips smaller. Whoopie. The size of a computing device is currently limited by the size of the battery, power supply, or human interface device.

As far as medical uses, the nanotechnology itself is useless without some way of coordinating the activity of millions of simple robots. That technology isn't nanotechnology. I call the ability to harness millions of independent units "Taonology", and it's first application will be social engineering.

(Checking time-traveler's guide to 2003 to make sure it's been invented.) Scratch that. But when it happens, act surprised.

Nanotech utopia?

Money will not disappear. Assuming that we could build anything, there are still things that keep everything from becoming free. First, all these items probably will be generated from a design that will have to engineered. The new model cars or game consoles will have to be designed and engineered. The pattern fed into a computer and then created. Such pattens will be copyrighted and trademarked. No doubt, there will be similar IP issues as there are today with downloading and conterfiters. Even if items could be replicated from an original without hurting the original lile in dowloading, it will take a decent amount of energy. If you make a banana, that banana will have nutritional value that will be stored energy. that energy has to come from somewhere and it will probably cost soemthign and that money will probalby go back to the the peopel who control the energy corporations. probably the same people who own the oil companies today. Even if there is near limitless energy, unlike downloading today, you still need raw materials. you can't make a set of headphones with gold plated contacts without the gold. Even materials such as copper, aluminium or steel have some scarcity and intrinsic value. I would not doubt if manufacturers started using rare earth elements in their cars and consumer goods just so such items could not be copied directly, a sort of futuristic copy protection. Even given that such technology is possible, it's not for sure that such technology wold be economicaly viable. It may take less manpower and energy to make things the old fashioned way than to use nanotech. A banana tree is already a nanotech machine and we simply might not be able to do it cheaper with a swarm of nanobots. theoretically, we could come up with a Ferrari seed that would grow a Ferrari but that assumes that the proper elements are present in the proper form to be turned into a car. Getting those elements into proper form may be a major issue itself, and by time nanotech has advanced that far, there will probably be other technologies and issues shaping the world more.

somebody on slashdot reads WSJ other than me...

Wow. This guy's blog was the first mentioned in a Wallstreet Journal article today. This blog and several others were mentioned.

My comment is...

How is analysing nanotechnology's economic consequences any different than what miniaturization has done over the past 30 years.

-----
The really funny thing to me is that these economists seem to think there is a problem to be solved. It's as if they believe their job is to solve the problem: "How do we assure equality with all the changes going on"?

Really man, this isn't a problem. The solution to that problem is simple... Freedom.

I have two basic theories that stand up way better:

1. You take an education, it doesn't come to you for free.

2. Education is everything. ....
3. ?

4. Profit

a few observations...

Economists tend to overlook the wealth value of technology because it is extremely difficult to quantify. Let's say, for example, that the distribution of wealth now compared to 100 years ago has seen a drastic increase in the concentration of wealth, i.e., fewer people hold greater percentages of the wealth. I don't know if this is true or not, but let's assume it.

A hundred years ago, if you were poor (on average), you were hungry, had no indoor plumbing (never mind electricity), and maybe owned a horse. Today, if you are poor (on average), you have a car, air conditioning, electricity, indoor plumbing, television, and you are overweight. I'm not trying to insult anyone, but that's the health statistic.

My insight about the economics of nanotechnology is that it could create an incredible concentration of wealth, while at the same time defining poor so stratospherically high (owning only two Ferraris rather than twenty because you have no place to put them) that it becomes irrelevant.

Other important points: (note, value != price)

• The value of personal services will be unaffected by nanotechnology
• The value of real estate will not be affected.
• As Arthur C. Clarke pointed out, the unit of currency would become the kilowatt-hour.
• Early on, this could make food more precious than diamond (the molecular structure of a chicken breast is vastly more complex and difficult to create than a simple carbon lattice)

erotic?

"on the economic implications of Nanotechnology.'

Did anybody else read that as

"on the erotic implications of Nanotechnology"

Maybe this is a sign I need to stop looking to technology to satisfy my sexual needs.

Atomic Holographic Nanostorage to Now Become Real

The President signing the National NanoTech Bill

will create thousands of new Companies and tens

of thousands of new Jobs in this Future $ 1

trillion dollar fledgling industry.

What we need to do...

This is in regards to nanotechnology, and to a certain extent, artificial intelligence.

We humans, for some strange reason, seem to think that if it is complex, then it must come from complex processes. Nanotechnology is no exception.

We seem to think that in order to make a nanoassembler, it must be some complex assemblage akin to an atomic level robot with AI intelligence or something (at the very least, a rod processing computer), when so much staring at us in the face tells us that such things simply aren't so.

Many of you may roll your eyes, but I honestly believe that Stephen Wolfram's "A New Kind of Science" will prove to be a pivotal book in the history of mankind. To the naysayers who cry "plagerism", I respond with "Read the damn book!" - if you had, you would realize that it seems like every other page the author is saying something about those which came before him: the author is in wonderment at the work done prior to his, and why the pieces weren't put together until he gathered it all up and tried it out.

In essence, the book boils down to a theory that is basically saying that all of the universe (matter, processes, life - everything) can be reduced down to a simple one dimensional cellular automata ruleset of 5 or 6 rules - that complexity arises from simple algorithms.

I believe that the fundamentals of this theory hold the keys to many of the "hard problems" we humans have been trying to implement. I believe a combination of NKS, network theory (as described in up-to-date detail in Albert- Laszlo Barabasi's book "Linked"), and emergence/complexity theory could help to solve many of the problems in nanotechnolgy and artificial intelligence we have been struggling with for so long.

This is the next step - figuring out how these three things define our world: in a way, it is a GUT for almost everything, the problem domain it could be applied to is vast. It won't be easy, but it is something that definitely needs more exploring and explorers.

Casulties Of "Progress"

The 19th century expansion of the British Empire's industrial capacity required the forcible opening of Asian and South American markets through military means. Within a couple of generations, Britain had acquired an Empire and was using social engineering, famines, and mass-scaled drug addicted coercion to "rationalize" foreign markets - some into producers, others consumers, others excluded through tariffs and unequal bilateral treaties.

This was the essence of "free trade" - new markets had to be seized for the output of the British factories. This was the eninger that drove Imperialism.

DeLong mention some of the disruption caused to weavers and spinners, but he takes an a priori classic laissez faire position that such transformation was somehow inevitable and happened as a natural consequence of technological proicesses. On the contrary, it was both produced and magnified by incredibly destructive military processes and sociological famine engineering. Tens of millions of people were effectively sacrificed on the altar of "free trade". China, Brazil, and India were reduced from a pre-eminent members of the global economy to balkanized, marginal shells full of starving, impoverished masses and their level of technological and social development reduced to pre-17th Century levels. The "Third World" was invented.

I have no doubt that these new nano technological producers, should they emerge, will similarly use unilateral and multilateral pressures and organizations to forcible eradicate nativist and local resistance to their products and trade.

The interested reader is referred to Mike Davis' impressive Late Victorian Holocausts [amazon.com] for further information.

Are there any companies I should invest in?

There is lots of talk on the Street about nanotechnology, but are there any legitimate, publicly traded companies working on nanotechnology?

I know of not one good one. Some throw out the word, but only to pad their press releases.

Witold

nanotech and education

If we're looking for clues to the education of the future nanotech-wizards, perhaps we should ask where present-day whiz kids in another recent technology, the internet, come from. Is it their amazingly effective schooling? Not very likely - most schools, public or private, are well behind the curve when it comes to teaching kids how to be a computer whiz. The education of a software developer, a web designer, a game programmer, or other varieties of computer whiz kids sometimes includes formal classes, but it usually includes long periods of hobbyist activity, of self-teaching, of learning from other experts, of on-the-job-training. Very little effective training of this sort takes place as part of the official K-12 syllabi. Hence, to train nanotech wizards, we might look to a similar model - freeform, interactive, student-driven. Just a thought.

Energy and mass still matter

Your going to need energy and mass to make thing still and those are going to cost something. Only some materials are going to be suitable for building things, those materials will have some sort of value because there IS a limited amount of them. Nantech manufacturing will still require energy which is not out there in limitless forms to use. Until the energy and material barriers are broken nanotech isn't going to overrun everything.

Why do they always add this sort of untruth??

One of the chief things that has made America great, after all, is that we are the only country in which enthnicity is not closely linked to nationhood.

Has this guy never even studied other countries??, I sure the USA is a nice enough place, but really it is rather ethnocentric, I know for a fact that we in Australia are way ahead of the states in this department, as to which contry is the least ethnocentric, well I would need way more data to decide.

Re:Slashdot:Bastion of Leftism

Wow! what a compelling ranting between Cowards!
At least I, Richard Milhous Nixon, the 37rd and greatest president this country ever had is willing to stand up to my statements.

Bush is a moron, but politically pointless, mostly a distraction.

It is mostly Dick who is running the show.
And all you ACs are a bunch of losers!
Why don't you move to Canada?
We are getting ready to invade.