Fully Automated Luxury Capitalism

It’s the best of times, it’s the worst of times. Fewer children are dying but more species of flora and fauna are, and the cause, arguably, is the same: capitalism which raises living standards but doesn’t deal with so well with the by-products it produces doing so, such as pollution.

Of course, capitalism has been wielding its double-edged sword for a long time now, and it’s been hard to see an alternative, a fact that has become especially acute in the last thirty or so years, as the big ideological fight of the 20th century ended with the collapse of the Soviet Union. Capitalism, like democracy, has seemed like the least worst option.

Things are changing, though. The shock of the 2008 crash and its mismanaged and uninspiring fallout, which continues to this day, has lead to widespread poverty, political chaos, and disillusionment. The warming planet is increasingly the object of our attention. And the future is obscure and troubling: smart machines threaten to take jobs and thus money at the very time as the world becomes older (and thus more requiring of costly aid) than ever before.

All these make living today feel like waiting. Whether we’re waiting for the postponed recession, the first first-world climate catastrophe (the first time we go hungry or thirsty), or the AI-ification of society, we know something big and new is coming, but we don’t know what.

Ideas are short on all sides. The populist right are either grifters seeking to enrich themselves or politically incoherent or both (Farage, Trump, Trump again), while the mainstream left is offering up a nice post-World-War-II big state alternative whose fit for the present era isn’t wildly clear. We need something new.

Aaron Bastani, in his book Fully Automated Luxury Commmunism, is the most recent voice claiming that the new thing that will make all the difference is technology, the development of which, contrary to what one might think, will eventually reveal itself as inconsistent with capitalism and usher in a new era. The silicon valley engineers, the new media wizzes, the venture capitalists — these are the people driving us towards a communist future and accidentally digging their own graves.

My aim here is to present a brief review of Bastani’s book, presenting his case for optimism, before presenting my own, more depressing but I think more accurate, case for pessimism about what technological progress will bring.

The basic idea underlying the technophile left is easy to grasp and turns on the idea that our economy is increasingly an information economy, and capitalism is no good at information economies.

The world provides us with raw materials, which we use to make the things we need and want. Increasingly, we are able to produce more and better things not because we discover more and better raw materials, but because we become better at working with the materials provided. We develop better instructions for dealing with them, which make it cheaper for us to produce what we want from the raw materials. As time goes on, the value of what we produce is increasingly determined by the instructions as opposed to the raw materials.

Thus imagine back in the day we have a field which we can work to get one barrel of wheat. If we want two barrels of wheat, in the absence of agricultural know-how, the only thing to do is get another field: increase the raw materials. But if instead we develop a smart new method of farming (which, because I’m an analytic philosopher, I’ll colourfully call The Method) that makes the land twice as productive, we can get our two barrels without increasing our raw materials. The two barrel output can be seen as a mix of the field input and the information input.

Economists speak of the marginal cost of something: this is the cost it takes to produce one extra unit of output. In our original example, the marginal cost of one barrel of wheat is one field (also things like fertilizer, and labour costs, but let’s ignore those for simplicity). But once we acquire the information, the marginal cost is half a field (information doesn’t go towards calculating marginal cost). By improving the quality of our instructions — information — we lower the marginal cost.

Acquiring information, then, lowers the marginal cost of production for many things. Of course, this would be moot if acquiring information were difficult: if it were as hard to come upon the instructions as it was to come upon the new field.

But information isn’t like that. In fact, the marginal cost of distributing or acquiring information is close to zero. This wasn’t always so. Back in the day, medieval scribes spent their day copying books by hand, a long and somewhat costly process (even monks have to be fed, clothed, and heated to continue in their scribing). It’s different today. Later today, many copies of this document, currently existing solely on my hard drive, will be made on Medium’s servers and on computers (hopefully, if people read it) round the world, instantly and at very little cost in time or money.

There’s, then, two things at play. First, there is the idea that improving instructions improves output, an idea that has been with us for as long as humans have been around. But second, there is the new fact that disseminating information is now close to costless.

Both of these things, Bastani thinks, will determine our future. We are getting better and better at exploiting the material world to produce things, promising a world of abundance. We can use — to continue our example — fancy gene-editing technology to massively increase the productivity of our field; then the information about how to do so can go on the internet for all farmers to use, so everybody can massively increase the productivity of their field.

Here’s a way to think of it. As time progresses, our goods become more and more informational, in the sense that a greater proportion of their value is determined by the instructions that went into their production than in the underlying matter they’re made of. Our field is originally non-informational; once we get The Method, it becomes half-informational. Once we get gene-editing tools, mostly informational. And that means that it becomes more and more like a good with zero marginal cost.

But economics struggles, at least in theory, with zero marginal cost goods. One way to see this is to note that if a good costs nothing to produce, then it also costs nothing to produce infinite times — it becomes abundant. But economics is based on scarcity: it is the science of how to allocate scarce resources (according to some).

Now here’s Bastani’s claim: many more things are informational goods, or will become so, than we think. What we think of as hard limits of nature can be supplanted if we just know how to deal with that bit of nature. And once one of us knows how to deal with it, that knowledge will tend to get out, and we’ll all know how to.

For example, just like the farmer increasing the yield of their field, so we’ll be able to use information and the right tools to edit our genes using technologies like Crispr. Only instead of getting one more barrel of wheat, we might get one more year of life. But not only that. Say you don’t like wheat but have tons of it. To modify — perhaps in a biologically implausible way — one of his central cases, new technology allows us to make artificial meat from non-meat matter, and maybe even to make meat from wheat.

These are both game changers. Editing our DNA, making meat from matter that costs much less, in suffering and resources, than animals — these open up new vistas onto life. And they are at least possibly within reach, as Bastani documents in two chapters of his book.

These might sound a bit sci-fi, morally objectionable, or even plain weird. But there are other parts to Bastani’s case. The pressing issue of our time is whether we will (indeed, whether we can, whether it’s not too late) divest ourselves of fossil fuels before the planet is irreparably damaged. Bastani presents the case for thinking that not only is this possible, but it’ll very soon become economically prudent. The sun provides us with more than enough energy for our needs. We just haven’t, until recently, had the information we required to unlock and harness that energy in a cost efficient way, but we are getting better all the time. Similarly, although we have so far done better than expected outrunning Malthusian limits — the risk that we’ll use up all the raw materials the earth has to offer as our population grows — we can’t expect that to continue. But it doesn’t matter, Bastani says, because we’ll soon be able to harvest minerals from outer space.

Finally, there’s AI. You’ve surely heard the reports about self-driving cars, surely asked yourself what it means when so many jobs, even solidly white colour jobs like you probably work, are automated away. Again, Bastani presents some of the evidence that typically gets offered to suggest that widespread automation is indeed coming.

I benefited from this part of the book, having been relatively ignorant of some of the things he discusses; it is a good compendium of the sort of information you can get from reading long-reads on the various topic (but probably unnecessary if you’ve already read those long-reads). He makes it seem much easier than it will be, though, and it would have been nice to hear about the obstacles that will need to be overcome to arrive at a post-scarcity future.

The overall role of the first half of the book, then, is to argue that scarcity is close to being overcome in life, food, energy, materials, and leisure time. We are looking at a future in which we have an abundance of all of them. The pressing question then becomes: what will we make of this?

Added 23 June 2020: From summer 2020 I’m going to move my occasional writing from medium to tinyletter. If you want to read more from me in your inbox, please consider signing up: https://tinyletter.com/mittmattmutt. I’ll post relatively infrequently, and hopefully interestingly, on the same sort of themes as the blog, so: popular philosophy/explainers, culture, literature, politics/economics, etc. I might also do things like brief reviews of books I read and so on.

Fully Automated Luxury Communism, is Bastani’s answer. Depending on how au fait you are with various leftist circles, you might have heard this (to my ears annoying) phrase: the idea is roughly that our increasing mastery of nature via technology will remove the need for us to work to produce the things we need to subsist, and so we will cease to need to work. And that will leave us free to pursue the things that matter to us, directing our own lives, unbent by desk jobs and the unfreedom they cause.

But … will it? Let’s grant that Bastani’s right that the arc of technological progress is bending towards abundance. Why think that this abundance will be used to further the goal of human flourishing?

In some moods, Bastani seems to think that this world of abundance is inconsistent with capitalism, which can only operate under conditions of scarcity. He writes:

[C]apitalism emerged in a world fundamentally different to the one now coming into view. That meant it accepted a different set of presumptions — ones it took as permanent, but which were, in fact, contingent. Faced with a limitless, virtually free supply of anything, its internal logic starts to break down. That is because its central presumption is that scarcity will always exist.

At other times, the claim seems to be weaker. It’s not that capitalism can’t function in the presence of scarcity, it’s that it shouldn’t. When talking about the possibility of medical technology being used to cure illness, he writes:

[R]ather than propping up the profits of private business while putting millions of healthcare workers out of a job, that should mean free, universal healthcare for everyone. The alternative of allowing market rationing amid conditions of such abundance, and for matters of literal life and death, is barbaric.

The claim here is evaluative: not that it won’t, but it shouldn’t. This is a much weaker and less hope-inspiring claim, because as if familiar is and should often diverge.

And indeed this seems to be the settled stance of the book: that we have a possibility, but we need a politics appropriate for it. To that end, last third of the book presents some ideas about politics that are meant to see in FALC.

Those ideas are (more or less) familiar statist ones: ‘the return of the state’ with ‘universal basic services’, the development of new and local institutions for financing new and local businesses, and ‘a broader programme to politicise central banks as central planners and democratise these supposedly ‘neutral’ institutions’.

I must confess I have no idea how these policies will usher in FALC. Even on relatively neutral assumptions about the relation between taxation and entrepreneurship, surely you’ll think i) such an expensive statist package will require very high tax rates and ii) this will decrease production in the private companies whom we’ll probably need to develop the technology.

Finishing Bastani’s book, I was left thinking that while FALC sounds pretty good, it seemed like it’ll be a struggle to get. I wanted to know more about how we get from the claim that FALC should be implemented to the claim that it will be. And not seeing that, I thought some more about what would happen if the technological progress happens but its fruits aren’t shared.

Fully Automated Luxury Capitalism

Bastani’s utopia, I grant, would be pretty great. And, in fact, it doesn’t seem ridiculously implausible to me that, at least in part, some of it should happen. Solar power and AI are almost certainly coming sooner rather than later, and the later is surely going to require some fundamental changes in the amount we work and the means by which we sustain ourselves, changes the answer to which is very hard to guess at.

At the same time, it seems extremely unlikely, and nothing in the book convinced me otherwise, that capitalism will go gently into that good night. So here’s a question: what would a capitalist post-scarcity society look like? Commonsense and economics not only suggest answers, but that we’re already in part there.

Imagine that the utopia comes — leisure time, energy, food, etc. become abundant. As we’ve seen, Bastani suggests this will cause problems for capitalism, because capitalism requires scarcity.

But there’s another possibility. Instead of giving up the ghost, capitalism will just move to areas where scarcity prevails, or — as Bastani notes — will make artificial scarcity. The latter is probably easier to see, so let’s begin with it.

There are a couple of ways to think about artificial scarcity, depending on the good in question. When it comes to mining asteroids for precious minerals, you could imagine Elon or Jeff just keeping back their stash from the market so as not to crash prices, as apparently the De Boer brother did with diamonds (maybe; what the right thing to do in such circumstances is hard to think about).

Perhaps more helpful is considering how informational goods work, because industries have arisen, seemingly successfully, to make profit in the presence of abundance. Thus think about companies like Spotify and Netflix. Many of us subscribe to Netflix. Yet we could, with a little industry, benefit from the fact that the cost of reproduction of an mp4 is very low and go to torrent or direct download sites for our entertainment. That is, movies and TV shows are abundant but capitalism has adapted. Asking ourselves how, we can make predictions as to how it might adapt to abundance of everything.

Shuman Ghosemajumder’s Open Music model was proposed as an answer to how to deal with music piracy in 2002, and has proved prescient. He predicted that people would make a move from owning mp3s, even if they were free, to paying a monthly fee for access to them without ownership provided certain conditions were met.

To see this, think about why we use Netflix. Partly because it has a wide selection (we wouldn’t have hard disk space or time to torrent its whole catalogue), partly because it’s easy (downloading pirate media is an annoying experience that consists mostly in closing windows advertising pornographic computer games based on Game Of Thrones (???)), partly because our friends do.

So here’s a prediction: as goods become informational, as music did, we move to a rental model, based on choice, ease, and network effects. Only, because everything is abundant, what we will rent will be … everything.

Companies could sell us ‘lifestyle packages’. Their pitch goes: instead of acquiring the things you need separately and time-consumingly (spending time at letting agency websites, supermarkets, reading reviews, etc.), we’ll provide them all. We offer the ‘hipster package’ — short term accommodation in one of our London or New York or Berlin apartments, cold brew, Apple, mushroom foraging expeditions, etc. Or we offer the settled package: five years rental contracts in areas with good schools, white goods, less fancy technology, cheaper prices. For every segment of the market, there’s a bundle of goods and services they offer you, so you don’t have to make the difficult decision of choosing in an abundant world. In any case, you don’t buy anything, you get access to it, and you can change whenever you wish.

Lifestyle packages are to the abundance of everything as Netflix is to abundant media. It offers us choice: we don’t have to be tied down to any place or stuff (unless we want to be). It offers us ease: we don’t have to spend a lot of time acquiring stuff. And it offers us network effects: it will be very easy to meet and interact with like-minded people if they subscribe to the same lifestyle package.

On this — I admit, wildly speculative — proposal, we could imagine capitalism adapt by in essence making abundance a feature not a bug. There would be too many things to choose from, and money could be made by curating our lives. In sum, then, it doesn’t seem to be obvious that in the presence of abundance the capitalist edifice must creak and fall, because we’ve already reached abundance in media and it seems Netflix and Spotify are doing OK.

Remaining Scarcity

But there’s a second, and perhaps more fundamental point. No matter how abundant however many things get, some things will remain scarce. Attention, friendship, love … what people do and people in general will remain limited (this point is implicit in the previous one, which in essence points out that even in things are abundant, our time to choose between things won’t be, and so we might pay to winnow down or decide between our options). Even someone whose brain has been altered to always concentrate can only do so for 24 hours a day; even the most ardent polyamorist has only 24 hours a day to love the many they love.

So here’s a second play for the capitalist: get into the attention, friendship, love business. Find ways to take advantage of their inherent scarcity to profit. It might seem prima facie hard to think of how the capitalist can profit from love. But, famously, they have form when it comes to encroaching where they seem unwelcome.

Consider the various inclosure acts, which made land that was previously open and usable by everyone private property owned and controlled by its owner. To the person of that time, it must have seemed like the most natural thing in the world that there was common land for us all to enjoy, and the most heinous upheaval when it was taken away. That some could take control of common land might have seemed hard to believe. But it happened, and we should be alive to the possibility of something similar happening in other domains.

Indeed, we should have some confidence that this will happen, because it is already happening, somewhat disturbingly. How do you meet people nowadays? Well, sometimes through work, friends, etc. but very often through Tinder and other apps.

Imagine a not wildly hypothetical future in which this is carried to completion: all meeting happens on Tinder, and just as formerly online dating was thought weird, convention changes so that meeting in real life is now the aberrant thing. That would mean that if you’re not on Tinder, you can’t meet people.

But here’s the thing: Tinder isn’t free, it is enclosed just like the fields, and we have to pay to access it. In exchange for using Tinder, you give them ever so much detail about your romantic proclivities, whether it’s cats or bathroom selfies or the appearance of the word ‘dour’ in someone’s profile that gets the right swipe. Details like how often you use it (how much you want to meet someone); like how often after a ‘see you tonight’ message you’re back swiping the next day (how successful you are at doing so), and so on. That’s a lot of info to be handing over to a company whose business model is based on exploiting information about you.

The point stands more generally: to congregate online, to make friends and chat and so on — to participate in the basic activities of being a human — you have to give Facebook and Twitter your data. The inherent scarcity of human beings and doings has already been monetized, and if Bastani is right that everything else will become abundant, we should expect this to continue ever more, because those beings and doings will be the only scarce things there to be monetized.

The underlying point is this: it seems there are some hard limits to what can be made abundant. And provided scarce things still remain, it’s not hard to imagine the capitalist gravitating towards them. And since those scarce things — human things — are the things we care about the very most, we should be concerned that a transition to a post-scarcity society will strip life of what matters, by making profiteering of necessity focused on it.

(A final thought on this. Are some things inevitably scarce? Can Bastani’s argument be extended to human beings and doings? Well, yes. Take sex. Soon enough, probably, various hardware and software will lead to simulations of sex that are completely realistic. Would that serve to make the scarce sex abundant? Well, that’s a deep philosophical question (what is called, more or less, the experience machine argument). Does a perfectly simulated experience of something count as much, or even half as much, as the actual experience of it? Would people treat simulated sex as real sex? Maybe, if they’re willing to treat crispred humans as real humans, and genetically modified stuff as a hamburger. One might think that the arguments in the book are a slippery slope the end stage of which is that we should all jump into a computer simulation as quickly as possible, where everything could be entirely abundant, if only we could persuade ourselves the simulation was real (fancy new drugs could help here). Is this a reductio ad absurdum of the logic of the book? Maybe.)

What this suggests to me is that the most important political issue that face us short-term is to make online spaces that aren’t enclosed, that aren’t only accessible in exchange for data. Rather than race to a speculative future, we need to fix what we’ve inherited in the decade or so since social media and the smartphone became ubiquitous.

In part, thanks to the freeness of information, that isn’t so difficult. We could make a non-profit alternative to Twitter or Tinder tomorrow using open source tools and tutorials — coding the thing is relatively trivial. But on the other hand, it’s very difficult, because not only do we need to build it, we also need them to come — to use the service.

This is a problem sufficiently big that Uber, for example, in their battle to dominate the online space concerned with moving people from place a to place b, have spent millions in VC-funding to subsidise rides to get people to use their service.

We need to find ways to fight against this mountain of money, against these modern day enclosure acts that have arisen. Before we can move beyond capitalism to a better future, we need to understand and face off with it in its current and future manifestations, and Bastani’s book is valuable for making these manifestations salient, and making clear the challenges that lie ahead, even if he himself underestimates these challenges.