Friday, 28 December 2012

The Political Economics of the Singularity

"The singularity", in some sense at least, is already happening, and has been for the past couple of years.

Look, if you will, at the disconnect between the technology sector (booming; "talent" (labor) in exceedingly short supply, salaries rocketing) and the rest of the economy (tanking, many people out of work, surplus of labor, salaries plummeting).

Technology brings many new and unfamiliar nonlinearities into the economy. Access to the mass market does not (in all circumstances) require mass employment - For example, I am one individual, working from my home office, and I can easily make improvements to and deploy a product used (indirectly) by millions of people with a few keystrokes -- No expensive bureaucracy, no factory, no paperwork, and no infrastructure beyond a handful of laptops, an internet connection, and a few dozen rented Amazon EC2 machines.

The funny thing is this: We all expected the singularity to swing the balance of power firmly towards the side of capital, away from labor. After all, surely capital would simply buy robots instead of employing labor? However, it is not quite panning out as we expected. Developing a new technology product is now ridiculously cheap -- capital costs have all but disappeared. Technology startups now look to investors not so much for capital, but for advice, access to customers, and reputation. Just as the need for labor has (unevenly) diminished, so the need for capital has also (unevenly) diminished.

It is becoming clear that (in some circumstances at least) the old balance of power between labor and capital has been swept aside, with both, in some sense, having been made irrelevant.

What replaces it? The answer to that question is not easy to discern. One thing is clear though: this new world is far more complex, richly textured, baroque and interesting, and the old political battle-lines will need to be redrawn with greater subtlety and nuance than they ever were before.