The Economics of Mad Max and Star Trek
By Tom StreithorstJune 21, 2015
The second is more dramatic and less idyllic. Desperate and hungry gangs of thugs roam a post apocalyptic landscape littered with the detritus of our decadent civilization, battling over the last tanker load of gasoline. In the aftermath of ecological disaster, all legitimate authority collapses and anarchy reigns. The dream we can call Star Trek, the nightmare Mad Max.
Although opposites, each story resonates because both extrapolate from current trends. Star Trek notes our remarkable technological advances and recognizes we are hurtling towards a post-scarcity economy. Mad Max reminds us our depredations of the planet may prove untenable and the Earth might just bite back.
Humanity’s fate hinges on the outcome of this race. Our scientific prowess and our destruction of the planet: which will be the first home to roost? One hundred thousand years ago — a mere blip in the history of the earth — only a few million humans roamed the savannahs of East Africa. We lived off the fat of the land, hunting and gathering, fitting easily into our ecological niche. Today we are seven billion and everywhere. If our planet is a living organism, then we humans are a virus. We replicate ourselves compulsively. We spread. We devour our host.
Your family and mine alone consume as much energy as all of humanity put together did during the Middle Ages. The oceans are acidifying, the planet is heating up, 30 to 50 percent of all species may be extinct by the middle of this century. The last time so many species died, an asteroid hit the planet. Today, that asteroid is us. Its velocity began 10,000 years ago when man invented agriculture. With the Industrial Revolution, its speed grew exponentially. Every day, the impact crater gobbles up a bigger share of Earth’s bounty and we are sensible to fear that some day, the planet will strike back.
The economics of Mad Max echo those that followed the fall of the Roman Empire. During the Dark Ages, precious resources became scarce, and men from regions devastated by famine swarmed more prosperous lands. So too in the Mad Max world: desperate to feed our families, we pillage one another. We bring war to once peaceful territories, and the brutality shatters a precarious stability. Order crumbles. Governments fall.
Without a state of courts and laws, trade becomes precarious. Transaction costs rise. When contracts are unenforceable and counterparties are as likely to rob you as fulfil their obligations, violence replaces commerce as the means by which we satisfy our needs. When armed bands roam the roads outside of towns, the result is autarky. Farmers produce for sustenance, not sale. The cities can no longer feed themselves. We move to the countryside. The cities collapse. Eventually some sort of feudal arrangement emerges: warlords become hereditary noblemen, their knights and samurai extract goods and labour from ordinary citizens desperate for protection. Life is nasty, brutish, and short. It is an ugly world, but one historians will recognize.
But Mad Max is not inevitable. Pessimists have been predicting disaster as long as I have been alive. Forty years ago, the Club of Rome argued convincingly that we would run out of basic commodities by the year 2000. Growing up in the 1970s, it seemed reasonable to expect that by 2015, a nuclear exchange between the United States and the Soviet Union would find me warming myself by a fire in the ruins of a once-great city. Instead we dress better and eat better than our grandparents could have dreamed.
William Jevons, one of the inventors of modern economics, calculated in the 1880s that economic growth could not continue at its blistering pace of one percent per annum because Britain would run out of coal. He was right. British coal stocks were insufficient to maintain Victorian levels of growth. But we found other sources of energy. Today, gross domestic product rises faster than Jevons dreamed possible.
What ecological pessimists forget is that so far scientists have always been able to stay ahead of resource scarcity. They have always found better, less toxic replacements for what we’ve lost. In the cities of the developed world, rivers are cleaner and air is more breathable than they were 50 or 100 years ago. In 1900, transportation in Manhattan was based on horse and carriage. Authorities predicted that by 1930, horse manure would fill the streets three stories high. The rise of the car has created its own problems, but it certainly solved the horseshit crisis.
Prophets of doom have always been too eager. The man who wrote the Book of Revelation expected the horsemen to arrive in his own lifetime.
Now our great and terrifying fear is global warming. Droughts are becoming more common; the Sahara is expanding; the Greenland ice shelf is beginning to melt. My personal nightmare: the Gulf Stream stops flowing and Northern Europe becomes as cold as Northern Canada. When the Sahel stops producing enough to feed its people, they may come north, pillaging Britain like the Anglii and Saxons did 1,600 years ago.
But the cost of solar power is falling much faster than anyone expected, even a few years ago. Experts are predicting that within 30 years renewable sources will provide more energy than fossil fuels. If we manage to stop burning oil and coal and somehow find a way to scrape the carbon dioxide already in the atmosphere, we might yet dodge this bullet as we have so many before.
I suspect Star Trek is more likely than Mad Max. We have never yet failed to become richer; as a species, our lives have always gotten better. You wouldn’t know it from the headlines, but Greece today is more affluent than the Germany of 1974. Even the least among us own technology that would have been science fiction just a dozen years ago. Our ancestors would be amazed at the splendor of our lives, and by this I mean our grandparents, not cavemen.
No, we haven’t got the replicator or the transporter quite yet. But technological advances once unimaginable now strike us as mundane. We think nothing of flying halfway around the planet. We can Skype Zimbabwe for free. Peasants in Iraq watch Manchester United play live via satellite, and peasants in Mexico dress in inexpensive clothes manufactured in Sri Lanka. Objects and experiences that were once the purview of the elite are these days commonplace. In the absolute, 21st century welfare recipients are wealthier than 19th century noblemen.
Our prosperity requires productivity growth: technological advances that continue to allow us to make goods and services more cheaply. Star Trek is the extrapolation of this trend. If it costs hardly anything to produce goods, then everyone can afford almost everything. In Star Trek, the whole Federation is as affluent as upper middle class Americans today and they get longer vacations. You no longer have to work much to satisfy your needs. Star Trek is socialism by unlimited technological supply, no violent uprising against the marketplace required.
There is a third option. It is likely and it is ugly.
Even a technological wonderland can create a pernicious society. Technological progress can create dystopia even if ecological disaster is avoided. What if the benefits of productivity gains are monopolized by the top one percent, as they largely have been for most of the past 30 years? This is the world of Margaret Atwood’s Oryx and Crake, a terrifying, but familiar world of gated communities and genetic engineering, with generalized poverty for everyone outside the corporate elite.
Imagine a machine that creates gourmet meals out of thin air. It is solar powered, cheap to use, can be manufactured for less than a plasma screen TV. You can bake pizza, sauté trout meunière, slice sushi, roast Peking duck better than the finest chefs, all just by pushing a button. Some Silicon Valley genius invents this device. The world rejoices. Every restaurant in the world goes out of business.
Chefs, waitresses, and dishwashers lose their jobs. The marginal cost of manufacturing goods falls to nearly zero, but if the technology for such a machine remains proprietary, then the replicator’s food is only as free as its designer decides. Our Silicon Valley whizkid, free of competition, charges as much for the food we now make in our kitchens as we might’ve once paid in a five star restaurant. A few app designers, the .01 percent, make fortunes. The one percent who serve them do okay. The rest of us, redundant and unnecessary in a world where oligarchs do not even require an underclass to cook their dinner, are reduced to begging for scraps.
This isn’t just my own attempt at science fiction. The rise of robots threatens to eliminate 47 percent of all existing jobs. More goods will get made and at a lower cost, but jobs will evaporate. Up until now, automation has mostly destroyed blue-collar employment. But as machines become more efficient, fewer workers will be required. Sheffield, the ancient heart of the British steel industry, today manufactures more steel than it ever has. But since modern steel making requires a fraction as many workers as it used to, increasing the production of Sheffield steel is no longer creating an affluent working class.
Craftsmen were eliminated by the assembly line. Factory workers were eliminated by more integration. Bank tellers were waylaid by automatic teller machines. Today, lawyers, doctors, and accountants are threatened by software that can do their job faster and cheaper and more proficiently than they can. Technology will make things much more affordable, but if it also eliminates jobs, then perhaps hardly anyone will be able to buy them.
Technology has mostly solved the problem of production. We still need to solve the problem of distribution. A basic income guarantee, a cash payment to every citizen sufficient to purchase the necessities of life, might be the best solution, allowing us to harness the innovative might of capitalism while avoiding the poverty of a jobless future. In Star Trek, consumption is no longer linked to work. As productive capacity expands while need for workers declines, employment could become a choice, not a necessity.
Our collective memory still holds an image of an economy where work is pleasurable and needs are satisfied with hardly any effort: The Garden of Eden. There, life was easy. There was no danger. Food was available for the picking.
It is a story, of course; a myth written by Bronze Age agriculturalists hankering for the idyllic life of the hunter-gatherers before them. I have said that our course has always been toward affluence, but it was only after the invention of agriculture that the sweat of our brow nourished our daily bread.
Without agriculture, humans would never have taken over the planet. We would be much fewer, just another smart species of ape. But subsistence farmers had a harsher, much harder life than their hunter-gatherer forebears. Hunter-gatherers worked less, ate better, and lived in far more egalitarian societies than their agriculturalist descendants. Average adult human height, an excellent proxy for childhood nutrition, only returned to Palaeolithic levels in the late 19th century. Hierarchy, slavery, and oppression — all of these emerged only in the wake of agriculture. Before that revolution, we might hunt cooperatively a few hours a week, gather berries for a few more, and spend the rest of our time amusing each other telling stories. Work before farming resembles what the rich do on holiday today.
Subsistence farmers worked far longer hours than their ancestors. They died younger and lived more miserable lives. The sole upside was that farming allowed the same plot of land to feed many more people. Agriculturalists took over the planet because they had more children, not because their lifestyle was more attractive. If health and happiness are the measures by which we assess the quality of human life, then the agricultural revolution was a peerless disaster in our history.
But perhaps we can come full circle. If the benefits of technological progress continue to accelerate and are allowed to percolate freely throughout society, we might be able to once again have a leisure society available to all. We may again be able to satisfy our needs by working only a few hours, the rest of our time spent socializing with friends, enjoying ourselves, and nurturing our loved ones. This time we’ll even have nice clothes and smartphones.
A robot can make a driverless car, but it cannot buy one. If jobs keep disappearing, and we do not institute a basic income guarantee, then we may have the cruellest irony imaginable: a marketplace of unlimited supply without consumers capable of shopping. Such insufficient demand would doom us to a permanent recession: eventually, we might lose the whole thing. If the benefits of technological progress continue to accrue only to the richest among us, Star Trek might end up as feudalistic and impoverished as Mad Max, the worst of both worlds, with geeks replacing warriors as the noblemen. We can do better. We must imagine a world of plenty, right before our eyes. The basic income guarantee may well be the last best hope of capitalism.
Tom Streithorst has been a union member, an entrepreneur, a war cameraman, a commercials director, a journalist.
Tom Streithorst has been a union member, an entrepreneur, a war cameraman, a commercials director, a journalist. These days, he mostly does voiceovers and thinks about economic history. An American in London, he’s been writing for magazines on both sides of the pond since 2008. He is currently working on a book on how the incredible productive power of capitalism and technology have the potential to bring us all prosperity and happiness but so far, we keep screwing it up. He also writes a regular column about economics at pieria.co.uk.
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