Sunday, October 23, 2005

Globalization and Economic Progress

In this post I ask the question 'what is the relationship between economic progress and technological acceleration?'. This question arises because of the current state of globalization and its impact on human activity.

I argue that exponentially accelerating economic progress is a necessary accompaniment of the application of exponentially accelerating technology and vis versa. This thesis is the conclusion of how I define economic and technological progress.

Economic progress can be defined as a continuous gain in the relative efficiency of the coordination and utilization of goal directed human labor; while technological progress can correlatively be defined as a continuous gain in the knowledge of how best to coordinate and utilize goal directed human labor. This may seem like a rather strange definition of technological progress to some. The reason for this is because technology is popularly understood to be the physical products of our science like computers, and cars, and ipods etc. These products are not technology however: they are merely the products of technology. This is because technology is not a thing but a knowledge - specifically the knowledge of how to do or make. And whenever humans are doing or making anything they are performing goal directed labor. So if anyone figures out how to do or make anything better, then that is technological progress; and if that knowledge actually gets applied and people begin doing and making things in a better way (better is defined as accomplishing your goal with less work) then that is economic progress. When the definition of each is put forth in this way it becomes obvious that economic activity and technology are two sides of the same coin and are cyberneticaly related.

It is this fact that explains why societies that are technologically advanced are also wealthy.
But why do societies progress at all?

One reason is because societies often come into conflict over resources. As resources become scarce societies must figure out more efficient and effective ways to coordinate and utilize labor (technology) and then apply that knowledge (economy). If a society that is in competition for resources with at least one other fails to progress economically and technologically enough then that society will eventually be dominated by a society which has.

Until recently (in terms of world history) this phenomenon has only had a small and mostly regional influence but this is because hyperbolic trends start seemingly linear. However as the acceleration of the world-historical technological/economical snowball begins to pickup speed it becomes hard for any careful observer to miss its exponential nature.

This brings us to the present time in which we are witnessing the most advanced state of this global acceleration in technological and economic progress. In large part we can understand this present state of world affairs as the outcome of a grand global contest which took place between two competing economic/technological world systems.
The two systems were the top- down totalitarian system of command economy and the bottom-up liberal system of democratic capitalism.
Both of these systems emerged out of the philosophy of the enlightenment at the end of the nineteenth century as competing systems vieing for global supremacy.

The key difference between these systems is how they understand man. The totalitarians conceive of man as part of a materialist cosmology in which he is to be understood as cog in a linear, cause and effect, machine that can be manipulated for the best by a top-down central authority. This anthropology descended from a materialist understanding of the cosmos and found its apotheosis when Marx applied materialism to the interpretation of human history.
The liberals, on the other hand, (such as Jefferson, Locke, Kant, and Hegel) viewed man as a fundamentally self-determining and moral creature. These thinkers believed that if institutions which hinder man's freedom, such as hereditary social castes and superstitious dogmas, were removed that mankind would be able to self-organize and advance without limit.
It now appears as though the liberal philosophy of the Enlightenment has won the war against its totalitarian brother. Dialectical materialism was wrong. The invisible hand was right.
But what does this mean for the present? Just what did the central planners get wrong and what can learn from this?

To begin we must understand the holistic nature of the biosphere and mans relationship to it via the noosphere. Through the mathematics of complexity theory we are beginning to understand how novel properties can supervene on the properties of lower order systems through a process known as emergence. The importance of this insight is that it completely changes our understanding of what constitutes a "mechanism" and thereby makes irrelevant most of the materialist thinking of the turn of the last century. We now understand that the cosmos is not a mechanism of linear causation but rather an unimaginable web of feedback systems which interact in ways that are inherently unpredictable.

When this is understood then it must also be understood that the economic and technological progress of man cannot be attained through top-down, authoritarian, centralized planning. This was the mistake of Marxism. Man is not a cog but an intellect and an agent.
And this is what the liberals got right. If man is essentially a self-determining and moral agent, then the highest role of government is to preserve man's freedom and responsible autonomy by establishing his duties and protecting his rights - and only that.


Unfortunately, Moore's law will not last forever. In fact, it appears increases in clock speed have already hit a wall (3Ghz CPUs were around 4 years ago, and we still don't have a 4 Ghz for sale). This link gives the details:
Transister count continues to grow quickly, and this may continue for a few more years, but we are rapidly approaching theoretical limits in this area as well. Quantum computing will bring about significant improvements, but its impact on consumer electronics will likely not occur for at least a decade (more likely 2 decades).
The most important thing I want to point out, however, is not about computers but rather economics. Technology is certainly the end result of economic progress, and technological progess in turn makes use of some resources more efficient and hence increases economic efficiency. However the fuel for this economic machine is cheap access to energy. The world economy is extremely dependent on cheap oil. We have already used about half of the world's easily (economically) accessible oil, and the remaining half will not last us another 100 years because we are using it at a much faster rate. The "end of the oil age", as some are calling the next few decades, will result in a very big strain on the world economy. This means technological progress will not continue at anywhere near the pace that it is now. I used to be a believer in the Kurzweilian prediction of limitless exponential technological progress. However my research into energy economics has caused me to believe that the logic behind Kurzweil's prediction is fundamentally flawed. The world economy and technological progress are at this point literally fueled by cheap oil, and this fuel is not going to last much longer.

By Anonymous Hallucinojon, at 28/10/05 02:59  

I apprecieate your perspective but I disagree with your conclusion. I agree that oil is running out and that it will strain the economy. I also agree that the source of the economy is energy (see my last post). What I disagree with is that oil is the only cheap source of energy. In fact I think that using oil at this point is slowing us down. What we need is a nuclear economy and decentralized solar economy and once the market really demands it it will appear. As for the end of Moore's law - of course it is about to end. Did you think that we would use transistors for ever? The point of Kurzweil's Law is that a greater and greater ability to process information is an inherent attribute of the evolution of the cosmos. I don't know if you have read "The Singularity is Near" but it deals at length with this criticism. Also quantum computation is only one possible avenue for overcoming Moore's Law. There is also photonic and 3D computation. You should not underestimate what the ability to manipulate atoms can do for both computation and energy.

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