Computer technology is now essentially free.
A high performance PC either the size of a USB stick or a beer can now costs $100. I bought one and tried it out. Windows 10 is included, but the PC costs less than Windows 10, so the actual cost of the PC is less than zero.
This is the result of Moore’s law (coined by Intel chairman emeritus Gordon Moore 51 years ago in 1965 when he worked for Fairchild R&D). It’s something you’ve probably heard of but don’t really understand. I’ll try to explain briefly:
- Circuits are reproduced on silicon wafers by essentially photographic means, i.e. maybe some setup costs but almost free after that.
- To make the circuits smaller, shorter wavelength light is used (and a few other tricks). By 2020 TSMC will be making circuits on contract to anyone with feature sizes of 5 nanometers using ultraviolet lithography. That is only about 10 times the size of an atom. Intel makes 7nm chips today. But don’t worry about the party stopping because of atomic dimensions. That is a distraction from the real counter-force to Moore’s law, which is social.
- The smaller circuits run faster, just because they are smaller and have less area-based capacitive loading and shorter distances for signals to travel. The area-based improvement is a square law, so they get a lot faster.
- The smaller circuits use less power for the same reason, the area-based capacitive loading, and this is a square law also, so they use a lot less power. Instead of bulky power cables like laptops, the new PCs just use USB phone chargers. Soon they’ll run off of ambient solar or thermal noise.
- At the smaller size, more circuits fit on a wafer, and this is a square law also. So we have kind of an agricultural-like productivity, and indeed a decade ago transistors became cheaper than grains of rice. Soon powerful CPUs will be cheaper than rice grains.
Now let me explain the social consequences:
- To make the same revenue and avoid stock price collapse, more applications must be found. This has to follow the square law. So, lots more applications. $100 PCs mean I can have one on every TV, even TVs I don’t often use, say at vacation homes. But this is current. What about the future? The answer is the IoT: internet of things. Initially these will be fairly dumb, but web connected devices. You won’t have any choice. Everything you buy will be internet connected. Like digital controls on microwaves, nothing else will be available. But as Moore’s law progresses, they will become very smart. Every device in your house will have a camera and microphone and be able to converse with you, within about 6 to 8 years. Annoying, I know, but that is not the real problem.
- The real problem is what businesses use the surplus computing capacity of Moore’s law for. They have long since run out of genuine value added ideas, and the only thing they can think of is productivity increases. Since we already have an inflation free, deflation tending economy, this does not mean more stuff (except for tech stuff, of course). It means every business created in the last two decades or so has been jobs-negative, by intent.
Is there a solution?
There is no Moore’s law for economics. It is easy to form a Utopian vision of a future in which there is no need for labor, and material goods are free. However, no economist – ever – has put forward a vision of a practical transition plan.
Instead, as jobs disappear and countries fall into economic chaos (Greece, Syria, Tunisia), social chaos appears. And it spreads. Migrants flood the well-off countries and jobs disappear there.
Humans are very adaptive. They can adapt to most anything in about one generation (20 years) in developed countries. Tradition bound countries, not so fast.
- The Middle East is little changed since 1900, or for that matter 700 in many places, and of the vast number of schemes by many governments and organizations to change it, the number of successes is zero.
- China still behaves much as the Chinese empire did in the 1700s, exporting while refusing to buy anything other people make. At that time it was tea rather than technology. Britain’s attempt to extract itself from this trade deficit led to both the Opium Wars and to the American Revolution (as they tried to rig the tea distribution system with unequal taxation).
- India exports gurus, only now they are tech gurus instead of yoga gurus.
- Africa exports unskilled forced labor, only now they are “economic migrants” instead of slaves.
The bottom line?
As the cost of Gigahertz class computing substantially disappears in a single generation, and this is used to automate everything, even complex tasks like driving and brewing beer and waiting on tables, the percentage of jobs disappearing in a single generation will at some point exceed the ability of any society to adapt. Given no economic theories, this means jobless-induced civil strife will spread to all nations.
Civil – of or relating to citizens; polite, courteous, etc.
If we take the civil out of civilization, it won’t matter how much tech we have. We won’t have civilization. Therefore, it appears to me that the endpoint of Moore’s law will not be atomic dimensions, but its ability to undermine the civilization that powers it.
So don’t blame Trump or Obama, blame Gordon Moore.