Towards a Closed Loop Economy

Innovation is Serious Business. It's the key to prosperity, national security, health, jobs, you name it, innovation will solve it. But for all the talk that gets thrown around about innovation, and innovation policy (at least in the circles I run in), one question which is largely unaddressed is: Can we innovate in any direction we want, or are there historical patterns that describe how technological change produces the social, political, and economic outcomes were aiming for?

The study of economic history is called cliometrics, and one of the seminal works in the field is Chris Freeman and Francisco Louca's As Time Goes By: From the Industrial Revolutions to the Information Revolution. Freeman and Louca develop a theory of innovation centered around Kondratiev Waves, decades long cycles of economic development driven by a “carrier branch technology.” They identify five Kondratiev Waves: water powered machinery, the steam engine, electrification, motorization, and computerization. Kondratiev waves display common characteristics, the carrier branch technology allows vastly more efficient use of resources, while creating new demands for raw materials, new technological innovations, and new forms of social organization. However, each wave's upswing is followed by a downswing, a structural adjustment as the limits of the technology are reached, and the quest for further profits and efficiencies instead leads to the elimination of jobs, and associated social and political unrest. I'll use the steam engine as the canonical example.

Steam engines were initially developed to pump water out of coal mines, and were relatively bulky and immobile. Improved metallurgy and machine tools allowed the creation of lighter, more efficient steam engines capable of driving locomotives on railroads around 1820. Railroads created a new market for coal, which was become cheaper thanks to better mining techniques, but more importantly, made it much easier to bring coal to market. Factories, which previously had to be located by fast flowing rivers, could now be moved closer to population centers and raw materials. Travel became a mass commodity, and millions of people could travel between cities cheaply and easily on a network of new railroads and steamships. Entrepreneurs became extremely wealthy, while many investors went broke in speculative bubbles. The sheer scale of railroad enterprises (thousands of employees as opposed to hundreds, and geographic dispersion) required new techniques of rational management, for example, the Harvard Business School was founded to train railroad executives, while timezones were imposed so that a nationwide train schedule could be coordinated. By 1870, market pressures had forced the creation of massive conglomerates, run by Gilded Age robber barons. Recession and labor unrest reverberated around the world, and wealth production did not begin in earnest until the start of the next Kondratiev wave in the 1890s, when electrification provided a host of new opportunities. Similar stories can be told about each of the other Kondratiev waves.

So what's the take away, the relevance to modern life? Kondratiev waves last about 50 years, in total. The start of the computer age can reasonably be traced back to the invention of the integrated circuit in 1959, or more realistically, the IBM S/360 in 1964, which was the first widely available general purpose computer. The exact date isn't important, what matters is that now, fifty years later, we've reached a point of saturation in terms of computers. Micro-controllers are in literally every possible device. 4.6 billion people have cell phones. Computer chip manufacturing is a cut-throat business conducted on the thinnest of margins. These facts are clear signs of a mature technology, and the downslope of a Kondratiev wave. The economic and political side matches as well. We're seeing persistent unemployment and social unrest the world over, from the United States, to Greece, to Egypt. While the proximate cause of the most recent recession was financial mismanagement (made possible in large part by the computerization of the financial sector, I might note), it seems more plausible that in fact we're experiencing a structural adjustment. Computerization is tapped out as a primary driver of economic growth. Incremental innovation in computers and related technologies will not restore prosperity. What is needed now is a new carrier branch technology.

Carrier branch technologies are big, they fundamentally alter every aspect of production and social organization. What in the pipeline might fit the bill? Nanotechnology is a perennial favorite, but molecular assembly is fifteen years away, and has been since 1986. Human enhancement and biotech is important, but I'm not sure how much it drives at the "means of production." Clean energy might work, but replacing coal plants with solar plants, and gasoline with batteries, doesn't seem big enough for a Kondratiev wave.

This comic [backup link] provides a hint. It tells the Malthusian story of reindeer on St. Matthew Island, where the population expanded exponentially until they hit their resource limit, and collapsed. While the only thing more predictable than a Malthusian prediction is that it will be overturned, the central tenet that in the long run, Earth is a finite system, is a physical fact. So let me speculate, what if the outputs of the economy were identical to the inputs? What if the human economy was a closed loop, taking in only sunlight, and producing the absolute minimum of waste? Stop burning fossile fuels, stop mining metals, stop depleting fisheries and upsetting nutrient cycles, and focus on minimizing

This would require the re-engineering of almost material artifact, every large scale technological system. The amount of human effort would be staggering, millions if not billions of jobs would be created. The potential benefits are large, not only would we be saving the planet, but we'd be growing the economy, because turning trash into wealth is the very definition of alchemy. Moving to a closed loop economy is not just ecologically sound, it's also cost efficient. As Neal Stephenson recently pointed out, sucking resources out of the ground and lighting them on fire as a way to create energy is a method that appears, from the point of view of hypothetical alien anthropologists, to be insane.

The actual policies involved in transitioning to a closed loop economy are far from easy. There are entrenched interests opposing any such shift. Not only is it cheaper to extract resources from the ground, and use the atmosphere as a carbon dump, but humans intrinsically enjoy being part of the larger world. As I've been thinking about this, the image of domed cities and hydroponic farms came to mind, a classic sci-fi dystopia. But as a start, we need to begin collecting information about the total life-cycles of products, and encouraging greater amounts of recycling. We need to identify what technological changes can be done easily, and what will be hard. There will be normative and cultural shifts; consumerism is not compatible with a closed loop economy However, in terms of the grand challenges of the future, the big economic picture, the creation of public policy and the role of individuals, there are steps that can be taken. This is the innovation we need, not only for prosperity, but for survival.

Collect Intelligence

As part of my day job, I'm setting up a futurism blog called The Prevail Project (it's in early alpha, so don't look). I have a backlog of interesting articles to work through, and the cool ones will be cross-posted to We Alone.

No matter how smart you are, you can't fix the problems of the world by yourself. Teamwork is the order of the day, and a new study by MIT suggests that the skills of effective teams might be more universal than previously thought. Researchers put small teams of two to five people through a battery different assignments, while monitoring how they interacted.

“We did not know if groups would show a general cognitive ability across tasks,” said Thomas W. Malone, the Patrick J. McGovern Professor of Management at the MIT Sloan School of Management, one of the authors of the paper. “But we found that there is a general effectiveness, a group collective intelligence, which predicts a group’s performance in a lot of situations.”

That effectiveness, the researchers believe, stems from how well the group works together. Groups whose members had higher levels of “social sensitivity” — the willingness of the group to let all its members take turns and apply their skills to a given challenge — were more collectively intelligent. “Social sensitivity has to do with how well group members perceive each other’s emotions,” said Malone. “In groups where one person dominated, the group was less intelligent than in groups where the conversational turns were more evenly distributed.”

The average intelligence of the individuals in the group had no effect on their performance. And interestingly, teams with more women were more effective than male dominated teams.

What's the take away? Now that scientists have the tools to study how groups work in detail, we can make smarter, more effective teams. The skills of social sensitivity, listening and taking turns, could be taught. Depending on how much technology a group was willing to accept, the methods of the MIT researchers could tell groups when they're being "collectively stupid" and cutting members out of the loop.

Small teams are particularly important for Prevail because teams can bring many different skills and perspectives to the table, and can adapt to the specifics of a new problem. While it takes years to master a body of knowledge, teams that can effectively integrate new members who are already experts can respond rapidly to emerging threats. Knowing how small groups work, and how they can be made to work better, is one way to Prevail.

The more things change...

"[T]hus it is, by slow steps of casual increase, that our knowledge physical, metaphysical, physiological, polemical, nautical, mathematical, enigmatical, technical, biographical, romantical, chemical, and obstetrical, with fifty other branches of it, (most of 'em ending as these do, in ical) have for these two centuries and more, gradually been creeping upwards towards that Ἀκμή of their perfections, from which, if we may form a conjecture from the advances of these last seven years, we cannot possibly be far off."

[Laurence Sterne, The Life and Opinions of Tristram Shandy, Gentleman (1759)]

"When that happens, it is to be hoped, it will put an end to all kind of writings whatsoever;—the want of all kind of writing will put an end to all kind of reading;—and that in time, As war begets poverty; poverty peace,—must, in course, put an end to all kind of knowledge,—and then—we shall have all to begin over again; or, in other words, be exactly where we started."

The Ethics of Nanotechnology

It's time for some serious social science. The EU Commission has released guidelines for ethical nanotechnology. Much of it is pretty sensible advice as to openness and encouraging the use of nanotechology for socially beneficial goals, but there are some sections that deserve critical review.

First, 4.1.11, that research bodies should standardized terminology. Nomenclature is more than word games, it shapes the ways in which think about the world. Calling for standard terminology would be an early step in the closure of nanotechnology. Do we want standardization to allow clearer collaboration, or are the many definitions of nanotechnology necessary for a diverse and expanding research community?

In the prohibition section, there is a call for not violating fundamental ethical principles, with new viruses given as an example. We should strongly consider the implications of military nanotechnology, particularly for targeted assassinations and robotic soldiers. Their call for non-therapeutic human enhancement is more problematic. I believe that we are going to see a blurring of the lines between medical (health is a social construct), commercially necessary (can you afford not to be as smart as your nano-enhanced colleagues) and recreational body modification. We are already cyborgs, why are nano-cyborgisms so dangerous that even research into enhancement technology is prohibited?

An aside on the topic of drugs. Commonly available mechanosynthesis would be a massive boon to drug users. Right now, synthesis of illicit drugs is controlled by monitoring their precursors. Mechanosynthesis uses the same elemental building blocks for all its products, so it essentially putting a drug lab in every home. How can we prevent personal fabricators, both macro and nano, from undermining laws that right now we consider necessary for society?

Technosphere/Biosphere

An excellent and imaginative post from Everett.

The upcoming climate/energy crisis is the product of a clash between two competing ecosystems, the biosphere and the technosphere. This is not to say that machine and animal are automatically in opposition, the issue is that the biosphere is unable to react to the technosphere fast enough to maintain equilibrium. Evolution is a process that affects all entities with heredity. The biological process of evolution is an established fact. Evolution in machines is a more radical idea, but one espoused by many STS theorists. To summarize, technologies are built on previous technologies, that is to say they express a heredity. The course of technological development is guided by selection pressures of technical possibility, and the desires of human actors.

The biosphere and technosphere are incompatible, because technical evolution occurs on a time scale orders of magnitude faster than biological evolution. Without protection, the biosphere will be forced back by technological artifacts that occupy the same macro-niches, in terms of land and resources. The technosphere, areas substantially altered by human technology, now occupies most of the land area of the planet. With its speed enhanced efficiency, without external pressures, it will expand to cover the entire world.

I cannot predict the state of the post-crisis equilibrium. The biosphere will survive, as the rocks and seas that existed before life remain. But as Mike's post postulates, we may see a convergences between biological and technological. Biology will take place on technical substrates rather than physical ones. Genetic technologies will decrease the timescale of biological evolution, perhaps providing a method for the biosphere to compete with the technosphere. Of course, a genetically engineered organism is a technical process, so this is another means by which the biosphere is being rendered obsolete.

Timescales: Expect mankind to become extinct when posthuman evolutionary timescales significantly outpace human evolutionary timescales by an order of 5-10.

There are 1.2 billion people alive today who were born before the molecular basis of life was discovered

This is for those who claim that some of the questions we ask today will never be answered.

(Population data from here. Using the central dogma of molecular biology, articulated in 1958, as a somewhat arbitrary cutoff point.)