The Economics of the Future
This is the first of two posts about a future nearer than we may realize.
To be fully aware, we need to see the long runs as well as concern of the moment. I foresee a very powerful economic transformation ahead which will overshadow many of today’s battles over economic policy.
Technological change is already outstripping the ways in which we work, what we produce, and how we consume. Fundamental economic stability requires a balance between these factors. We need to construct new work structures to handle the replacement of traditional jobs by robotics and artificial intelligence, new national and global loci of production, and new ways in which consumers can obtain “purchase” the public goods and services that they need and desire.
In this blog I intend to discuss the “market” dimension of these changes. We will soon find ourselves producing more personal products and services than people will want to purchase for personal, individual, consumption. That is, there is a limit to the number of private goods that people will be willing to buy for themselves and their families. We can argue this statement and we may find it is better expressed as the diminishing marginal utility to many traditional consumables. I am simply assuming we will reach the point of less marginal value to additional rooms and TVs in a house.
While there then may be an increasing market for specialty good, perhaps as status items, I believe it is reasonable to expect that production of personal consumption will outstrip demand. (Once we have met the equity backlog, i.e. the large number of people who now experience scarcity with respect to products easily produced in ever larger quantities. And whether or not accommodations are made for global shortfall.)
One can “run” a number of thought experiments with futuristic scenarios. They all seem to lead to a slowdown of production, and a crisis for investment, as demand is met and surpassed—-unless we significantly expand the production of what economists call “public goods,” i.e. those goods and services that would contribute to a richer quality of life for people if they are produced and distributed, but which cannot be successfully marketed to individuals, hence not produced, in private markets. For example, roads, law enforcement, clean air, bridges, parks, which, once available to one or a few people, are automatically available to all. These are goods and services for which presently there is a huge gap between production and potential consumption.
(Please consult any textbook source if you want to learn more. My definition lacks most of the “fine print.”)
My point is simply this. We will have to shift to the production of public goods if we want to both improve most people’s standard of living and ensure a market for continuing expanding production.
What I see is a massive turning in our “post-industrial societies” toward investments in public health, lifelong education, the arts and environmental richness (more beautiful gardens and parks as well as coral reefs and tropical rain forests and the preservation of biodiversity), scientific discoveries, public art and performance, medical research, and many more. These will involve purchases by charitable organizations or foundations (which will be unlikely to come near satisfying the demand) or by sovereign governments, using tax revenues and sovereign currencies, serving as purchasing agents for the people who have elected them.
An interesting focus on public goods rather than human rights. The proponent of human rights might somewhat naturally regard the provision of health care and the provision of essential technology (such as the Internet) as a way to achieve society to a higher level. In the process the wealth of innovative ideas presently lost (that is handicapped by limited access to health care and essential technology) might change the marketplace and achieve the marketing you mention.