My uncle closed an email discussion about long-term economic prospects about two months ago with the line “We can’t all get by just giving each other haircuts.” Quite true, of course, and reminiscent of my observation that entire towns in NH seem to survive by sharpening each other’s saws – but not survive very well.
Yet in another sense we can, and that’s what we do now. If our ancestors from 200 – heck, from 100 years ago observed us at work, they’d see a lot of us doing jobs that didn’t exist then, not actively engaged in making anything they could relate to. Few of us supply the home with more than a hobbyist’s amount of food, fuel, or clothing. We are not much engaged in primary provision. There have always been inns, services, and entertainment, but nothing of the magnitude we now enjoy. The percentage of Americans involved in this would seem to great-grampa that we were all just giving each other haircuts.
There have been magical energy sources on the far horizon as long as I can remember. More recently, the expectation of these proving out has moved from the decades measurement to the years measurement, at least for prototype and small-scale. So, push that out 20 years, and one of these science-fiction ideas turns out to work. What we would now view as unlimited electricity, very cheap. So we can build things we can’t afford now, like desalination plants or pipelines from Great Slave Lake, because the heavy building equipment can all be electric. Electric transportation – if we’ll even need that, if virtual realities improve enough (No one wants to go to Fake Vienna now, but if an evening in Fake Vienna, darn close to the real experience, can be bought for $200, will anyone shell out $2000 for the honor of the real thing, which is only marginally better? Some, but that would be a specialty item.) – with electricity costing pennies, would be easier. Growing food, making clothes, and certainly all our entertainments, could be had on the cheap.
Even if it’s 40 years out, it’s still a world-changer. Their lives would look to us as our lives would look to our ancestors. We would be making our livings by providing extra value in service, attention, entertainment, design – that is, by giving each other haircuts.
I expect that unlimited energy would create unexpected problems, perhaps even ones that are unimaginable now. That’s what’s happened with every other technical advance – general improvement, but at a cost. We might not even like that life very much compared to the one we have now. Comparative wealth might go completely kablooie, with incomes as stratified as in the Middle Ages. But even the poorest would be rich by current standards. As we are now by older standards.
We might find that comparative wealth is more important to human happiness than absolute wealth – that the feelings, both noble and ignoble, of having to determine your own status and importance turn out to be 90% of the wealth equation beyond subsistence and safety. Perception of wealth or poverty might be the basic driver. If that turned out to be true, all of our current economic systems might produce comfortable, even wealthy, but dissatisfied people.