Artificial Super Intelligence, Artificial General Intelligence and their Implications on Economics Part 2

Scarcity is a cornerstone of economic theory and human behavior. It reflects the inescapable reality that while our desires are infinite, the resources available to satisfy them are limited. Yet, the advent of Artificial General Intelligence (AGI) and Artificial Universal Intelligence (AUI) challenges us to rethink this age-old concept. Could these transformative technologies eradicate scarcity, or are we constrained by deeper physical laws and social realities?

What is Scarcity?

Peter Jacobsen of the Foundation for Economic Education defines scarcity as the relationship between people, the ends they seek, and the means available to achieve those ends. In essence:

Humans want more than they can have.

Our means to fulfill these desires are limited.

Scarcity drives economic activity, shaping how individuals and societies prioritize resources. Jacobsen even argues that scarcity underpins all human action—if there were no limitations, humans would have no need to act at all. But is this view overly reductive? Some actions, like laughing or expressing love, are intrinsic to human nature and do not stem from a lack of resources. Defining every human action as a response to scarcity risks oversimplifying the rich tapestry of human experience. For the purposes of this discussion, let’s refine our definition. Scarcity is best understood as the tension between what we desire and the means to achieve those desires. AGI and AUI represent humanity’s potential to transcend current technological and intellectual boundaries. Imagine a world where physical limitations, intellectual challenges, and even the laws of physics are no longer obstacles. What would scarcity look like in such a world?

1. Near-Zero Cost Production

Digital products offer a glimpse of a post-scarcity economy. For example, an audiobook can be replicated infinitely without depleting additional resources, reducing its effective scarcity to almost zero. Could AGI extend this phenomenon to physical goods? Consider housing—a classic example of scarcity. It’s often said that not everyone in Britain can have a mansion with a swimming pool because there isn’t enough land. But what if advanced technology allowed us to construct these mansions in the sky? The question shifts from “Do we have enough land?” to “Do we have the right tools?”

2. Rethinking Class and Power

In a world where everything costs nothing, traditional notions of wealth and class could dissolve. If material goods are freely available, how would individuals assert social status? Perhaps through exclusivity, unique experiences, or intellectual achievements. However, power dynamics are unlikely to disappear entirely. Those who control advanced technologies might hold disproportionate influence, shaping society in ways we can’t yet predict.

3. New Ethical Dilemmas

With unlimited production capabilities, humanity faces unprecedented ethical challenges. Today, creating something harmful requires significant resources and collaboration, acting as a natural barrier. AGI could remove these barriers, enabling individuals to create destructive technologies with ease. Can humanity handle such power responsibly? How do we balance innovation with security? These questions highlight the moral complexities of a world reshaped by AGI. While AGI promises extraordinary advancements, certain physical laws remind us that true zero-cost production may remain out of reach.

1. Conservation of Matter and Energy

The universe operates on the principle that matter and energy cannot be created or destroyed—only transformed. Every product requires resources, even if these resources are reused or repurposed. This inherent limitation ensures that some level of scarcity will always persist.

2. Entropy and Decay

Entropy, the measure of disorder in a system, guarantees that energy and materials degrade over time. Even in a post-scarcity world, maintenance and replacement will remain necessary, imposing ongoing costs.

3. Resource Demands of Advanced Technologies

Future technologies may require staggering amounts of matter and energy. For instance, creating a wormhole for spacetime vacuum teleportation could demand astronomical resources. While the universe’s scale dwarfs human needs today, advanced technologies might push us to the limits of what’s physically possible. Scarcity has shaped human behavior and societal structures for millennia. What happens when it fades away?

1. Cooperation and Community

Many human achievements stem from collective efforts to overcome scarcity. Building bridges, curing diseases, and exploring space all require collaboration. If individuals can produce anything independently, will this erode our sense of community? Cooperation often provides meaning and purpose. In a world where everyone can act autonomously, humanity might face a spiritual or psychological scarcity—finding purpose in abundance could become our greatest challenge.

2. Opportunity Cost in a Post-Scarcity World

Opportunity cost, the concept of choosing one thing over another, drives much of human decision-making. If resources are unlimited, would opportunity cost still matter? Imagine being able to pursue every dream simultaneously—would this dilute the value of choice itself? Even with AGI, the laws of physics impose unavoidable limits:

Finite Resources: Matter and energy are scarce, even on cosmic scales.

Entropy: All systems degrade, requiring effort to maintain or replace.

Unimaginable Costs: Advanced technologies could demand resources on scales beyond our reach.

While AGI might reduce costs dramatically, true zero-cost production remains constrained by these fundamental principles.

Ethics and the Future of Innovation

Perhaps the most pressing question isn’t whether scarcity will disappear but how humanity will adapt to a world of abundance.

What defines value in a post-scarcity economy? If material wealth loses significance, will society pivot to valuing creativity, relationships, or unique experiences?

Can we manage abundance responsibly? History is rife with examples of misuse when power and resources concentrate in the wrong hands.

Conclusion: The Verdict on AGI and Economics

AGI and AUI will undoubtedly revolutionize economics, production, and society. Costs may plummet, and access to resources could expand dramatically. However, the foundational principles of scarcity, shaped by physics and human nature, are unlikely to vanish. Even in a world of near-limitless abundance, humanity will face challenges—ethical dilemmas, social shifts, and the enduring need for cooperation. Scarcity may evolve, but it will never truly disappear. What do you think? Are we ready for a future where AGI redefines the boundaries of scarcity, or are we unprepared for the profound changes it will bring? Let’s continue the conversation.

https://fee.org/articles/what-is-scarcity-really/