What might serve as a medium of exchange in a nanotechnological society?
The need for a medium of exchange will not disappear; bartering labor becomes
very inconvenient in multi-party transactions, and there needs to be a unit
of account for land transactions.
The medium of exchange cannot be the traditional gold or silver, since their
special value as materials will disappear when superior new materials can
be constructed out of common building blocks such as carbon atoms, and their
rarity will disappear when the cost of separating them from seawater or
other low-concentration sources becomes negligible.
The most likely medium of exchange would be based on land, the only remaining
physical item of enduring value. Shares in collections of rented land could
be kept in checking accounts and checks written against them, or certificates
could be issued for use as cash. Land will always be rented, due to the
persistent demand for transient lodging, especially with increased time
and resources available for travel.
The concept is little different from writing a check against a money market
fund balance today. Indeed, a checking account balance in today's society
could feasibly be denominated in something other than dollars--another national
currency, grams of gold, shares of corporate stock, or shares of a group
of corporations. Multiple units of exchange can easily coexist provided
that all units are conveniently divisible and mutually convertible. A simple
mechanism for converting paper assets to direct ownership of some of the
land would eliminate the current problems of closed-end mutual funds trading
at a discount to asset value.
I will not attempt to predict the relative values of land and labor in a
The birth rate in a nanotechnological society is likely to decrease. Time
will be of value to people who are not bored, and children will generally
be viewed as a burden by those whose purpose in life is to alleviate boredom.
Only people with a strong desire to spend their time bringing up children
will continue to reproduce. The desire for children will not be solely due
to religion; some will look upon child rearing as an esthetic, artistic
Many of today's remaining economic incentives to have children will disappear.
There will still be psychological pressure from parents to produce grandchildren,
but many people will choose to ignore such pressure once economic incentives
such as current financial help or future inheritance become less tempting,
and the transportation costs of moving further away from relatives decrease.
The rapid decrease of the death rate--to near zero--will produce more sociological
problems than economic effects. People today have trouble accepting the
evolution of relationships with people as their circumstances change. People
form a mindset of their relationship with a particular person-- especially
a perceived inferior--and don't willingly or lightly change it. Older relatives
often find it difficult to accept mature relationships with younger relatives
whom they knew as infants. More experienced colleagues in business or leisure
activities often find it difficult to accept the rise past them of a person
previously lower in the pecking order.
All of these problems will be aggravated in duration, and increased in frequency,
by increased longevity--and in particular, by increased longevity in prime
condition. People in uncomfortable positions in such relationships may find
it easier to move elsewhere and start over.
Space settlement will occur, spurred by
such pressures as increasing population, the urge for adventure, and a desire
to get away from past personal relationships. Space settlements will not
destroy the value of land; land will be of value on all planets, and not
everyone will want to move off any particular planet. Even if the population
of a single planet were to decrease, land would not lose all of its value.
Before nanotechnology or another technological advance makes space travel
really inexpensive, space settlements might become less free than Earth.
If the cost of emigration to space is high, requiring years of saving, and
the cost of emigrating again is high enough to restrict individual choice,
tyranny could flourish. The advent of nanotechnology will drastically reduce
the cost of space travel, restoring the individual option of repeated migrations,
and drastically reducing the likelihood of such tyranny.
One side effect of space settlement will be the end of the brief era during
which instantaneous communication with any other member of the human race
has been possible. As Arthur Clarke pointed out in a 1976 speech, ours is
the only generation for which this instantaneous communication will exist.
However, space settlement will still occur. Some people will not mind the
loss of instantaneous communication; others will actively seek to lose it.
The human race will regain some of the diversity that it has lost in the
last 50 years, especially after interstellar settlement occurs.
Interstellar settlement will not be stopped by the fear that separation
is permanent. Some will seek such separation; others will accept it, just
as emigrants leaving Europe for America 100 years ago did. Finally, increased
longevity will make separation less likely to be permanent.
Such a nanotechnological society will be very different economically from
today's society. But many of its economic changes are already well under
way as a result of technological advances already achieved.
Accelerating technological change results in a shorter-term
Accelerating technological change results in a shorter term economic
horizon--for sound economic reasons. Production-oriented capital equipment
can always become technologically obsolete, reducing its value. This can
occur either because new technology performs a task better, or (more dramatically)
eliminates the need for the task. Since the value of such equipment is tied
to the value of the future production to which it contributes, accelerating
technological change implies accelerating technological obsolescence. As
an example, a computer need not be very old before its annual operating
costs exceed the purchase price of a more capable machine. Therefore, equipment
need not be built to last as long as it was 50 years ago.
Similarly, any human production skill--any type of production labor--eventually
becomes technologically obsolete. Any person who does not continually learn
new skills should expect to see a decline in relative standard of living,
unlike the clerks of 100 years ago who had a fairly high relative standard
of living with very little change in skills during their careers. The increasing
ability to automate repetitive manual labor and, more recently, repetitive
mental labor, reduces not only the value of such labor, but also the quantity
An increasing average level of education will cause the gap in value between
the most educated labor and the least educated labor to narrow, not widen.
This economic turnaround will occur when the number of people who are not
well educated decreases faster than the number of people still needed to
do undesirable jobs which have not yet been automated; this appears to be
occurring in Japan today. However, the decreasing gap in rewards between
educated and uneducated labor in the US is a political artifact, not an
Information becomes less valuable when people value appearance, conformity,
and other people's opinions more than quality. Capitalizing snob appeal--often,
in effect, past advertising expense--becomes more important than capitalizing
production technology. As an example, consider the balance sheet of a beer
producer. Economies of scale in production are far less important than economies
of scale in advertising. The "goodwill" referred to in corporate
takeovers is a reflection of the capitalized value of past advertising which
will sell more beer tomorrow.
Entertainment labor which can contribute to sales of anything--even more
entertainment--becomes relatively more valuable, and production labor, relatively
Thus, with or without nanotechnology, accelerating technological change
will encourage the movement from an information society to an entertainment
society. Most of these current trends in value are simply results of advancing
technology in general. While some have been exaggerated by political forces,
the direction of change is likely to continue with future advances in technology.
The most stunning specific effects of nanotechnology will be the magnitude
of the changes, and the near disappearance of value of physical goods.
Unfortunately, not all of the effects of nanotechnology will be purely economic.
Humans are not only economic animals, they are also political animals. They
will attempt to acquire by means other than fair exchange. Political systems
distort values, and produce distributions of wealth and income other than
what one would expect from a purely economic analysis; these distortions
will affect relative values in a nanotechnological society.
Some human wants are political, not economic. Too many humans have a desire
to control others, without paying for the privilege by economic exchange.
They wish to control others not to advise them of what might be in their
best interest, but to force them to behave for the benefit of the controller.
Unfortunately, there will be no end to the religious and ethical disputes
which have plagued the human race throughout history: religious practices,
abortion, and mind-altering drugs. However, some political control will
be more difficult once such drugs can be produced in individuals' basements;
an improvement in surveillance technology will not completely compensate
for this. Fanatics will still want to stamp out these "evils"
everywhere, even when they take place entirely in individual homes; and
fanatics will continue feuds to death over religious and racial differences.
Another form of political want is the desire for relative status, as opposed
to absolute economic affluence. The vast increase in the standard of living
will not make some people happy as long as any member of the human race
has more income or wealth than them. One form of this want is the desire
of some members of the upper class in a society to stay on top, even at
the expense of foregoing absolute improvements in their own standard of
living; this phenomenon explains the persistence of both "Mercedes
Marxists" and anti-technology Luddites among this class. The proportion
of such people seems to have increased, not decreased, in the last two centuries
even as affluence has grown to unprecedented levels. We should not expect
it to disappear.
One effect of political forces will be to decrease the value of land relative
to labor. It is easier to confiscate land than labor, and coercively obtained
land is much more valuable than uncooperative coercively obtained labor.
This skewing of values will be strongest where the ethics of governments
Individual desires to control others will also lead to the formation of
groups to control others. Governments have attempted to control the masses,
for the benefit of the rulers, over most of the planet for most of history.
Technological advances will make monumental repression more practical. Before
the introduction of large-scale agricultural technology in the last 150
years, the lack of technology limited government repression. If the government
killed a sizeable fraction of the peasantry, less food would be produced,
and the bureaucrats in the cities would starve.
With no need for any production labor, a tyrannical government in a nanotechnological
society could proceed to kill off a very large fraction of its population.
A pessimist would argue that only the desire of the rulers to have an audience
of slaves left to admire their handiwork would keep the level of slaughter
below 100 percent.
In the unlikely event that all of the means of production of nanotechnology
were in the hands of a small percentage of the planet's population, there
would still be a large demand for labor. After all, one percent of billions
of people is still tens of millions, and ten million people have a large
quantity and variety of needs. People would still be able to acquire a very
high standard of living compared to today in exchange for very little of
their time. However, this would not be true if the number of people in control
of the technology were extremely small--tens or hundreds of people--as it
might be if governments control the technology.
Another disturbing possibility is that nanotechnology will likely shift
the balance of power between attackers and individual defenders from the
defense to the offense--a shift which traditionally has benefited the state
at the expense of the individual. Between 1000 and 1400, the offense prevailed--an
armored knight on horseback could attack a random individual, with no significant
likelihood of the individual inflicting any damage in return. Individuals
were forced by this into seeking protection from other armored knights,
and a feudal society resulted. Between 1500 and 1900, the bow, the musket,
and the rifle gave the individual a chance of inflicting damage in return.
When raids on individuals were no longer riskless propositions, they became
The enormous advantage which nanotechnology appears to give to the attacker
should not lead us to expect the revival of a feudal society. A group defensive
effort does not appear to be more likely to prevail against nanotechnological
attack than individual efforts; thus the protection motivation for the rebirth
of a feudal society appears to be absent.
To evade attack, some people may leave the planet--and the solar system.
The most successful defense may be to simply spread across the galaxy, thinly
enough to avoid detection, without leaving records of where one went. After
all, technology places limits on the size of an empire. The Roman and Chinese
empires of antiquity never exceeded a size that could be spanned by communication
in weeks, or by transportation of troops in months. Empires larger than
this would be too likely to successfully rebel. Thus planetary-system empires,
with communication measured in hours and transportation in days, would be
very possible, but interstellar empires are implausible in the absence of
faster-than-light travel and communications.
Should one be optimistic or pessimistic? Well, if the human political animal
does not prevent it, the human economic animal will enjoy life in such a
technologically advanced society.
Dr. MacGillivray is a member of the MIT Nanotechnology Study Group with
a background in physics.
In a past issue we requested help with quantum chemistry calculations; thanks
to Prof. Peter Lykos of the Illinois Institute of Technology Dept. of Chemistry
for offering assistance.
For arranging lectures on nanotechnology in Switzerland we thank Prof. H.-J.
Güntherodt (University of Basel), Heinrich Rohrer (IBM Zurich), and
Thomas Rauschenbach (World Economic Forum). For arranging lectures in Japan,
we thank Prof. Naomasa Nakajima of the University of Tokyo.
We appreciate receiving technical news and other information from Jim Conyngham,
Jerry Fass, W.C. Gaines, Marie-Louise Kagan, Leonard Micko, Ed Niehaus,
Anthony Oberley, Mark Reiners, Frederick Reynolds, E. Clayton Teague, and
Michael Weber. Thanks to Chris Fry for recommending the book Molecular
Thanks to all those who commented on our last issue; many felt it was the
best so far. Especially favorable comments were received on Jeff MacGillivray's
piece on economics (completed in this issue) and Dan Shafer's profile of
Marvin Minsky. Russ Mills's technical column continues to be a favorite
In setting up a new office, FI finds itself in need of the following equipment,
new or used: a small photocopier, two fax machines, and a second Laserwriter
printer. Note that donations of equipment or funds are tax-deductible as
charitable contributions. If you can help, call our office at 415-324-2490.
Also needed are volunteers to translate a small number of German and Italian
news articles on nanotechnology.