The Replicator Economy I

In the sci-fi series Star Trek, there is a sort of advanced fabrication tool called a “replicator” that pulls a bunch of matter from storage and arranges it molecularly into anything that the user requires within a few seconds. Mysteriously, it only seems to be commonly used for food fabrication throughout the series (though it has been a few years since I have watched it).

I don’t know if the series producers have thought through the implications of this sort of technology yet. There’s probably some Trekkie answer somewhere that saves the Federation from the implications of its own technology in detail. There seem to be endless ways to abuse something like this.

For example, if you can replicate a replicator, then it stands to reason that, properly programmed and coupled with a transporter, you could take a planet or moon apart with replicating replicators, and mass produce some product with it – say starships or war machines. If you need energy, part of that mass can be transported to a close-orbiting site around the local star which produces some sort of absurdly massive solar plant and beams the power back to the planet being operated on. Why the Federation never comes up against an army of endless war machines wielded by 20 disgruntled separatist engineers is somewhat beyond me.

Why isn’t everyone in the Federation tooling around in their own starship, or living in some crazily ostentatious mansion? If I had one, the first thing I would do is go on a massive redecorating spree for those drab uniform quarters.

But, back to the main point. In the series, apparently this advance is partially responsible for the Federation getting rid of money and all other legal media of exchange. Captain Picard gets self-righteous about it in a few episodes. It is apparently reasoned that since the production of any component is nearly effortless, no one needs to go about trading with anyone else for anything. All products have zero production cost.

This might not be a very realistic scenario IMO. Why the interest in this piece of science fiction? There is a new class of rapid prototyping devices being produced called 3D printers. Proponents imagine that these types of devices, also called “Fabbers”, can be scaled to produce a great many structures, from houses to dinnerware, with only the raw materials and a design available. Steak dinners might be a bit beyond their capability at present. In fact, material properties of 3D printed materials may not make them amenable for certain uses, like engine components or aircraft struts and landing gear. But these limitations may be overcome in the future and aren’t the main point of my article.

Many proponents of these “fabbers” imagine that these new devices will reduce the production costs of devices so much that money will become obsolete. There goes that desire for free stuff again. (Or, as it was put to me: Down with global capitalism!) What everyone seems to be forgetting is that there is a whole lot more to the cost of a product than mere production costs. In fact, for a certain class of product, we already have our effortless “replicator”, and it is causing a bit of trouble in terms of recompensing the people who provide us this class of product. The class of products is software, and the replicator device is your PC.

The fact that software, once created, can be copied effortlessly and “for free” doesn’t fix the problem that large teams of programmers had to spend months of work creating it. Piracy and intellectual property, and how to handle it is one of the important issues of our times. There are many views on how to handle it.

One is that of the open-source movement, which is that “information wants to be free”. Or rather, software should be available without cost at all, and there would be no piracy issue. (They also seem to view rampant piracy as the “just deserts” of all those poor programmers who would dare demand recompense for their products). The main problem with this way of handling things is that it requires that the programmers/inventors/designers work for free. They put in their time and effort only in exchange for fun or personal satisfaction. It won’t put food on their table. This is one of the perennial problems with the open-source movement. No one is going to write a field equation solver or an advanced, involved, user interface for an operating system for fun. If they put in the long hours to do it, they’ll want to be paid for it. No one is going to sacrifice their free time to provide something as unglamourous as a free graphics card driver to the masses. While there may be things like open source paintbrush, or open source compilers, you’ll never find open source Excell (with anywhere near the level of functionality).

This whole issue actually highlights an interesting trend in the costs involved in producing our products that has been developing since the industrial revolution. Anymore, the costs of the raw materials going into a product are nothing compared to the time and effort invested in the design, development, programming, and testing involved. A supersonic jet fighter is only a few thousand dollars worth of aluminum, steel, glass, and plastic. But it’s hardly an arbitrary arrangement of this matter! It takes engineering firms years to figure out how to make them, using skilled personnel who spent years getting their degrees. Compare something like a medieval hand-plow to a sailing ship to an industrial age car factory to a modern automated Toyota plant to an MRI machine, and you see where I’m going with this. These fabbers are a continuation of a trend that has been present since the dawn of the industrial age – the reduction and automation of the physical considerations of a production in favor of the mental effort involved in design.

In an economy with “replicators”, where the costs of producing something fall to zero, it still doesn’t get rid of the skilled labor costs of engineering and supplying the designs and information for anything more complicated than dishware. While it’s perfectly possible to imagine free plates, furniture, and maybe even certain simple appliances in a replicator economy, airplanes cars and computers are a different matter entirely. People value their time.

This is the fundamental underlying basis for the supply side of the economy. As long as people are going to give up their time for you, they will want compensation (which will require others to provide them with goods and services which would require time to be given up to them). This forms the basis for trade, money isn’t too far behind this. No compensation, no time.

Distressingly, when making this point, I’ve often run up against the attitude of “So what? Screw the big programming firms! It doesn’t matter how much it cost them to make it – sucks to be them. No one is going to pay for what they can get for free.” I try pointing out that the long term implications of this attitude being generally applied (i.e., moral philosophy) are that they would have an economy devoid of complex products requiring skilled labor like airplanes, car engines, or field equation solvers. You’ve given these guys no reason to give it to you, and if there isn’t a certain minimum degree of trustworthiness in the marketplace, no such firms will form to provide you your processors and pacemakers. Anything that isn’t fun, or that requires too much skill and effort wouldn’t be available. That includes a whole lot of essential goods and services!

Even more distressingly, the reaction to this point often is “Screw the long term implications! No one thinks in terms of long term implications anyway.” (One thing is for sure, the future isn’t going to look like Star Trek, no matter whose side wins in the end).

Software piracy and intellectual property violation is a moral hazard to be prevented. One of the main problems of our age is how to best prevent it, and what should constitute intellectual property in the first place. These are non-trivial problems. Microsoft Windows is a good example of something that falls clearly on the “product” end of the spectrum. But what about an advanced sorting algorithm? Should something like that be patentable? What about General Relativity, an extremely brilliant breakthrough in physics, but essentially an observation about how nature works that anyone could, in principle, come up with? What about mathematical theorems which are logically necessary, and which anyone could in principle deduce from the basic premises with enough genius and effort? While the mathematicians may have the right to recognition and to charge money for the disclosure of their secret, do they have a right to own it, or to charge others for it’s very use? (What if Descart had tried to charge people for the use of coordinate systems?) What about someone elses DNA code? (The patenting of other people’s DNA actually did create a stir a few years ago). It may take you effort and expensive equipment to collect this information and you may have the right to charge the subjects for the collection and disclosure of this info, but do you have the right to own it, and control how the people in question can use it? It is, essentially, an observation of the natural world that anyone with the right equipment could make.

There is definitely a grey area. And, just to be clear for those relativists out there who would just as soon do away with these considerations and use this as an excuse for rampant piracy, this grey area only exists on the bound between a clear white area (intellectual products) and black area (natural information).

But this will have to be dealt with in a future post.

The way I envision a “replicator” economy working is as follows: People still value their time, and this will be the basis for the supply side valuation of a product. Skill is also still valuable, since it requires long hard years at school to attain these engineering, science, and medical degrees. Unless the poor people of the Federation are being operated on by unskilled labor (a disquieting thought), it’s hard to see why their doctors aren’t treated like royalty (relative to the petty officers who flunked calculus) for the work they have to put in to learn all this futuristic medicine. The goods and services which will require the most skilled effort are going to form the basis for the main part of the economy. Medical services, engineering work, programming (in a highly automated, capitalized economy, talking to machines and creating the “brains” which run things becomes an even more crucial skill than it is at present!! I can only see the need for programming increase more and more as this trend continues.)

For things that can be readily replicated, the actual physical manifestation of the product itself, and the raw materials composing it is not going to be the primary thing of value. What is going to be of value is the design of the product. The creation of an advanced product design will be quite valuable, and it will probably form the basis of trade for other things of value (skilled services and other designs). The right to obtain and use product designs will form the basis of a replicator economy in my opinion.

It’s actually sort of interesting, but you can already see aspects of this playing out today. Congress is running up against an unusual supply curve in it’s management of the F-22 program. They are discovering, to their dismay, that buying fewer F-22s isn’t appreciably changing what they are paying for the program. Buy fewer planes, the cost of each plane goes up. Why? Because the vast majority of the program cost is development cost, not the production costs.

I think launch vehicle fabrication is also an area where this strange economic regime is coming into play. The launch vehicle companies are trapped on a point on the supply curve where they are amoritizing their vehicle development costs over too few launches. Since there isn’t enough demand for satellites, each launch vehicle is about 10x more expensive than it could be based on production costs alone. If demand were to go up, the cost of launching things into space would actually go down!!

I’ll end with a little imaginary scenario:

Fed Lt and his civilian friends walk into the Federation patent office.

Lt: “Hi. We’d like to apply for a patent on this new engine design that me and my friends have been working on over the last 10 years. We’ve got the basic physics worked out, and have even come up with some small scale demonstrators, and it could radically improve our travel speed.”

Fed Patent Clerk: “Really? Awesome. Let me get the paperwork.”

Lt: “What sort of royalties can we get on something like this. This could be big! We could revolutionize space travel!”

Fed Patent Clerk: “Uhh … royalties? Royalties? What do you take me for, some 20th century barbarian? We in the Federation have evolved our economy beyond the need for money. I’m afraid there’s no basis for providing you royalties.”

Lt: “Oookay. Well, we have a lot of people we owe compensation for. What can we get for it?”

Friend: “Yeah, you blew up Dave’s farm when that one early test model failed. Not to mention that one lab meltdown. And the equipment we had to borrow.”

Lt: “Yeah, and what about the fact me and my friends worked on this technology over the course of 10 years, myself when I was on leave and during my free time?”

Fed Patent Clerk: “It’s not our problem that you have obligations. Why should we have to pay for something that we can just fabricate in our shipyards?”

Lt: “You mean you’re not going to give us anything for something of so great a value to you? I just return to my basic officer’s quarters and continue working on the life support plumbing? My friends just return to civilian life and continue mopping floors for a living? Isn’t this of rather significant strategic importance?”

Fed Patent Clerk, turns up nose: “I’m afraid you don’t understand basic citizenship. Here in the Federation, we work on things because we enjoy them, for fun and personal achievement. For the betterment of ourselves. We don’t ask or expect compensation from each other, that’s just a barbaric instinct left-over from industrial times. Now if you want to spend your time in a hangar turning wrenches on an experimental engine, that’s your business, not mine. If you’re lucky, we’ll even name it after you for an episode or two until we think of a better sounding name for it (or forget it was invented entirely). And of course, you’ll work for us on account of patriotism alone. Now, will you turn over these documents?”

Lt: “Uhhh. I think we’ve forgotten how this engine works.”

Fed Patent Clerk: “What? Quit fooling around. I’m a government middle manager. My time is valuable.”

Friend: “Yeah. We don’t seem to remember exactly what physics this engine was based on. Maybe the Ferengi have something that will jog our memory.”

Lt: “Yeah. They do seem to remember how this whole remuneration and reciprocation thing works.”

Fed Patent Clerk: “Whaaat? You can’t do that! Think about our reputation for enlightenment and scientific advancement! Think about our national pride!”

Lt: “See you later”, takes off.

Fed Patent Clerk: “You won’t get away with this! We can get other scientists, you know! We’ve made tremendous progress in ergonomics and interior decoration since The Original Series! … … … Come back!”