What does post-scarcity look like?

One of the most major dramatic changes our society is likely to experience in the near-term future is likely to be the transition to a post-scarcity society.

In a certain sense, this transition is already well underway. Beginning with the industrial revolution, the world has seen massive economic growth and associated declines in famine, extreme poverty and the like.

There are a number of factors driving this transition, but the underlying one has a name: “Capitalism”.

What is Capitalism?

Capitalism is the most efficient system for allocating scarce resources invented by humanity thus far.

It is impossible to talk about capitalism without talking about money. In a capitalist system, money is the dominant concern of all people. So long as one has access to money, all one’s needs are provided for. Almost all goods and services can be acquired using money and without money life becomes unbearable or impossible.

In capitalism, money is a scarce resource. That is to say, the overwhelming majority of people have less money than they would prefer. For this reason most of their decisions involve finding ways to acquire more money or how to spend their money in the most efficient way possible.

From birth to death, people’s whole lives are structured around money. As children, we are reminded to work hard in school so we can get into a good college. In college, we are told to work hard so we can get a good job. At our job we are told to work hard so we can get the next big promotion. And when we do get paid, we are warned to “save” or “invest” or money so that we will have adequate money in the future when we are no longer able to work.

This overwhelming obsession should surprise and confuse us as it is not something natural to the human condition. For the majority of human evolution, humans have been much more interested in two things: one’s tools and skills, and one’s social status. The hunter gatherer worried about the sharpness of his spear and his standing within his tribe. The herdsman worried about the quantity of his sheep. The farmer worried about the quality of his land.

Money is both an abstraction of these things and something else entirely. It is an abstraction because tools, sheep and land can be bought for money. It is something else because one of the things money can buy is more money (though the intermediation of interest rates). Consider modern billionaire Elon Musk, who doesn’t even own his own home. By prehistoric standards, he is desperately poor, and yet he is at the same time he is one of the richest and most powerful people alive.

Why is capitalism so successful? Because money is both a signal and incentive. By focusing exclusively on gaining as much money as possible, it is possible for people to specialize. A hunter gatherer is responsible for tool-making, hunting, cooking and providing his own shelter. By contrast, no modern human understands the creation process behind a pencil. With specialization comes economies of scale and relative abundance.

What comes after capitalism?

It is tempting to believe that capitalism is the final form society will take and thus it will continue forever. Indeed, it seems the only way capitalism could be replaced is if a more efficient way of organizing human labor was to be found.

However this is unlikely to be the case. Capitalism is not without its detractors. Indeed, if you ask almost any human being whether living a life with a singular obsession over money is good or bad, they will tell you it is bad. Humans are not naturally designed to care about money. Humans naturally enjoy hunting, tool-making and playing social status games. Collecting money is merely a nuisance that limits what humans can and cannot do.

For this reason, it seems likely that our future social system will accept a little inefficiency in exchange for increased human happiness.

This will be enabled by an emerging result of capitalism: post-scarcity.

What is post-scarcity?

In ordinary life, certain resources are scarce and certain resources are abundant. The most commonly given example is air: except for dire circumstances, people do not worry about whether or not they will have enough air to breath. A much better example, however, is water.

Fresh water is something that must be provided by an immense amount of effort and coordination. Sources for water must be found. That water must be transported from the source and then purified for human consumption. That purified water must then be piped into people’s homes and heated or cooled before use. And yet, for the most part, people don’t worry about how much money costs or whether they will have enough of it. The simply turn on the faucet and it is there.

It is also important to realize that post-scarcity doesn’t mean available in an infinite amount. We still pay for water and make efforts to conserve it. It’s simply that we do not worry on a day-to-day basis about the price of water or having enough of it.

In a post-scarcity future, most goods and resources will seem like water. We will never worry about having enough and the limits on how we use them will be lack of interest or social norms against waste rather than financial constraints.

I want details! Will people still work? Will they pay for things?

The economic system of the future will probably most closely resemble Europe’s Social Democracies. For the most part, people’s needs will guaranteed by the government. Nonetheless, most people will probably continue to work and carefully limit their consumption due to strong social norms.

People will probably still technically have “incomes” and “pay” for the goods that they consume. For the most part, however, the portion of their income guaranteed by the government will be more than adequate to provide for all of their wants or needs. Prices will tracked by an invisible economic layer that is completely seamless and invisible to normal users.

But aren’t some things inherently scarce?

Yes.

Regardless of how advanced the economy is, there will still be some things the ordinary person cannot reasonably afford. Whether this is a spaceship or a Dyson sphere. These things will be so far beyond what people normally consume, however, that it simply won’t occur to most people that they should try and earn money in order to afford them.

There are three types of scarcity that I think will be handled in significantly different ways that need to be considered. These are economic scarcity, rivalrous goods, and virtual scarcity.

Economic Scarcity

This is the most familiar and natural category, since it has the greatest similarity to today. No matter how large the future economy, there will still be some projects that are too expensive for just anyone to undertake. Consider the construction of a new generation ship or Dyson sphere.

It will also still be necessary to provide for the goods that ordinary people depend on. Someone still has to keep the water, electricity and the like running after all.

The provision of both of these will probably be dominated by a small class of “capitalists”. These people will–in a sense–be relics of the past, in the sense that they retain the old-fashioned obsession with money and profit that has for the most part gone out of style. They will be the titans of industry, so to speak, who keep the water running and secure financing for new mega projects. They will also undoubtedly be highly taxed in order to provide the guaranteed income that most of the population relies upon.

So the capitalists have all the real power, then?

No.

Because social status is something all humans covet, in order to keep a society from devolving back into one obsessed with money, it is important that those who seek money not obtain high social status. Being obsessed with money will be viewed either as a weird hobby, or as something kind of “dirty” the way we view people who maintain sewage systems. People know they depend on them, but they don’t look up to them.

Instead, social status will accumulate to leaders, movie stars, artists and the like. These people may be comparatively “poor” versus the capitalists, but they will nonetheless have a higher standing in society.

Which brings us to our second category: rivalrous goods.

Rivalrous goods

There are certain things that there is only a finite supply of and no amount of money can create more of them. Examples of these might be: reservations at the nicest restaurants, passes to visit national parks on Earth and an apartment with a great view of the rings of Saturn on Europa.

While virtual versions of these things will be available freely to anyone, the real thing will nonetheless be available only to the ultra-elite. Rather than making these things for sale using money–which would favor the capitalists–these things will probably be instead determined using elaborate social rituals.

For example, reservations to the fancy restaurant might only be available via a waitlist, and the higher your “social score” the better your position on the waitlist. Similarly, someone might wait a lifetime or be expected to do a great act of service in order to earn a pass to a national park. Physical apartments might be allocated using a combination of price and social status, with people merely being told “you can’t afford it” when they ask for a particular apartment without really understanding why.

Keep in mind that the capitalists will continually be trying to create new “exclusives” to provide to the public. They might open a new restaurant and then try and attract patrons. Or they might build a new orbital habitat near Saturn and advertise for residents. Artificial zoos might be built with cloned animals that people can visit.

People’s personal finances will be tracked and managed by artificial agents who handle the “dirty work” of matching their personal preferences to available goods and services. From the perspective of an ordinary person, it might simply show up as an alert: “there’s a new restaurant you might want to check out” without them ever knowing about the underlying financial reality.

Virtual Scarcity

Some people may enjoy competing to earn money without having to undertake the unpleasant job of becoming a capitalist and working on the optimal allocation of sewage pipes.

For these people, virtual economies will fill an important gap. Within these economies, much like modern MMOs, users will be able to do jobs, earn money and gain power and status. But importantly, these economies will be designed to optimize for human enjoyment, not to optimize for the harsh realities of real-world economics. These economies will probably also enforce a strong “firewall” between the virtual economy and the real one, much as “pay to win” is looked down upon today.

When will this all happen?

It’s already happening.

Countries such as Germany, Italy and Spain already guarantee a minimum income to their citizens. As the wealth of nations grow, more and more places will experience a transition to post-scarcity. For some places, like Europe, the transition will be gradual and invisible.

In the USA, the transition will likely be more dramatic–due to American’s historical aversion to the welfare state. Most likely, some crisis or other will result in widespread unemployment and politicians will simply pick the easy way out of guaranteeing everyone a job or money.

In the developing world, we will see a mix of these two. India already has an income guarantee, but at nowhere near a level that could be considered post-scarcity. However, there will likely be a critical inflection point where the world collectively realizes that an end to poverty is within reach and makes a push to achieve it.

A fair guess of when this will happen is when world GDP/capita reaches about $20,000. This is the approximate point at which the correlation between more income and human happiness breaks down. Therefore we should expect countries that have reached this point to focus less on economic growth and more on maximizing happiness. If current economic growth continues, this transition should be “complete” around 2050 or so.

How likely is this to happen?

While a transition to a post-scarcity society is desirable, it is by no means inevitable. There are two major threats to this transition.

The first threat is that economic growth will happen but that its rewards will not be distributed among ordinary people. This is a future where a few trillionaires are obscenely wealthy while the rest of the world burns.

The best defense against such an outcome is to strengthen democracy, as it is likely that the threat of the 99% voting against the interest of the 1% will cause the 1% to compromise on issues such as allowing UBI payments. Furthermore, a world full of relatively wealthy consumers is actually in the economic interests of would-be-trillionaires.

The second danger is that economic growth ceases. This could happen due to environmental catastrophe or societal collapse.

The greatest environmental threat is global warming, but fortunately the benefits of economic growth are likely to appear (2050) before the downsides of global warming (2100). Furthermore, technological advances (such as in solar power, batteries and electric cars) both advance economic growth and help the environment.

Societal collapse–such as what happened during the Russian communist revolution–could seriously hamper economic growth. Ironically, the best defense against societal collapse is strong economic growth. So long as people see that the economic is growing and they reap the benefits of this growth, they will likely uphold the shared values of that society.

What should I do?

Support effective charities such as Give Directly. Support efficient economic and welfare policies such as NGDP targeting and UBI. Support technology that mitigates global catastrophic risk such as solar power and electric cars. Support political movements focused on improving outcomes for the global poor.