Technological Singularities and Measuring Value

This week I came across this fascinating presentation by Robin Hanson, of the George Mason University Economics Department, on technological singularities and the possibility of experiencing another one by mid-century. He specifically considers the role of nanotech and AI in this singularity.

Hanson highlights four previous technological singularities: (1.) the evolution of brains, (2.) hunting, (3.) farming, and (4.) the industrial revolution. He charts out how estimated global production per capita grew tremendously at each stage, and then plateaued as the technological innovation fully defused and the prospect of exponential growth moderated. Hanson argues that it's possible we might go through another technological singularity - a prospect that seems all the more reasonable when past singularities are charted out on a log-time scale. As readers of this blog know, I'm quite optimistic about our development as a species and the break-throughs we'll have in the far (and not so far) future. Nevertheless, I do have one major reservation about Hanson's presentation, and it primarily has to do with his data.

The obvious criticism is that we only really have good data on global production after the last singularity - the industrial revolution - and for quite a bit of that period, the data is shady at best. It's not until the last half of the twentieth century that you have good data even on the developed world. Now, we have convincing proxies for earlier periods, and the task is made easier by the fact that they simply didn't produce as much back then (agricultural production accounts for the bulk of it, and knowing something about cultivation methods makes that relatively easy to estimate). But the criticism still stands.

But that's not my primary criticism. My primary criticism isn't methodological, it's conceptual. The biggest blind spot in Hanson's data work is that the way we conceive of value production now is not the way it has always been conceived. If we only count commodities that we consider commodities now, we're going to necessarily make earlier periods look more impoverished than they actually were. Value is subjective. We can conclusively demonstrate that the market economy made humanity more materially better off. And that is a very good thing. What's much harder to demonstrate is that it created more value. My guess is it did create more value, but probably less than Hanson's presentation might suggest. I'll let a selection from Keynes's General Theory explain what I mean:

"Ancient Egypt was doubly fortunate, and doubtless owed to this its fabled wealth, in that it possessed two activities, namely, pyramid-building as well as the search for the precious metals, the fruits of which, since they could not serve the needs of man by being consumed, did not stale with abundance. The Middle Ages built cathedrals and sang dirges. Two pyramids, two masses for the dead, are twice as good as one; but not so two railways from London to York. Thus we are so sensible, have schooled ourselves to so close a semblance of prudent financiers, taking careful thought before we add to the "financial" burdens of posterity by building them houses to live in, that we have no such easy escape from the sufferings of unemployment. We have to accept them as an inevitable result of applying to the conduct of the State the maxims which are best calculated to "enrich" an individual by enabling him to pile up claims to enjoyment which he does not intend to exercise at any definite time" (p. 131).

We see the period between the advent of farming and the advent of the industrial revolution as being an impoverished period. But what we really mean is that they were materially impoverished. In many ways, past ages may have been wealthier than us, in the sense that they produced more value, utility, or welfare per capita because of the way that their values were structured. We live in a world of diminishing returns. Some of these diminishing returns are technological and inescapable in any age: you will have to put in increased effort to produce more and more crops on a given plot of land, holding all else constant, no matter what age you live in. But some of these diminishing returns are psychological and self-imposed.

My wife is leaving for Brussels today for a conference. While she's there she's going to be visiting a few palaces and cathedrals. Tourist attractions like these bring in millions every year. How often are such attractions built today? When we build buildings today how often do we think of them as monuments for the ages? How often do we weigh the benefits that they will produce centuries into the future against the costs of building them now? Rarely. Occasionally, but rarely. That strikes me as a necessarily impoverishing attitude. Granted, not everyone in ancient Egypt and Rome made their investment decisions based on the benefits that would accrue to future epochs. Material poverty was so desperate that such decision making was reserved for an elite few: an elite that often relied on slave labor and confiscatory taxation to build their monuments. I'm not yearning for some idyllic past that never existed. But what I am doing is pointing out that the time horizon that we use to think about what is valuable and the sheer imagination that we bring to the question of what is valuable has been, in many ways, severely curtailed, both as a result of what Marx called the "fetishization of commodities", and because of our secularization, which removed one of the primary motivations for building monuments to the ages (the prospect of eternal life). It doesn't mean that the modern market society is bad. I'm a big fan.

What it means is that it will probably have to change if we want to maintain lasting value. At some point, as a species, we need to build for the ages again. And that doesn't mean some wealthy philanthropist looking a century into the future. That means a visionary looking a thousand years into the future, and dreaming about what human society will look like then, and investing in that.

I've gone far afield from Robin Hanson. I think his talk is very good. It lays out the technical interpretation of technological change from an economist's perspective, which I enjoyed. And I appreciate his optimism about the future. I think he has a very characteristically modern understanding of value creation (at least in this presentation) which could probably be augmented. But all in all, it's an excellent piece.