The economy is going to collapse and never recover. What will take its place is something almost entirely inconceivable by modern standards, and yet it’s something that a good number of us will likely live to see.
So that’s just a bit alarmist.
Ok, let me back up a few paces.
First off, let’s assume that sometime in the next forty or fifty years, we develop clean, inexpensive energy. Like so cheap that it’s really pointless to charge anyone more than a pittance for it. This could take the form of, say, fusion generators or something similar. Something that is very efficient and very cheap. This will happen eventually, the only question is when. Once that happens, the stage is set for the economy to go bye-bye because of another interesting technological development.
Have you heard about nanotechnology? I’m sure you have. At its most basic, nanotech is the manipulation of atoms and molecules. This by necessity happens on a very small (nano) scale. Among other things, it lets you move around atoms, molecules, and possibly even sub-atomic particles. A few moments thinking will reveal that this enables us to quite literally turn lead into gold simply by making a few adjustments at the atomic level. Indeed, this is already possible, and can provide you with gold provided that a: you don’t mind paying several times the amount of money for the gold you’ll get, and b: you don’t mind that gold being highly radioactive. Also, it’s got an insanely short half-life, so you’d best spend it quickly.
But this shows that the basic premise of turning one element into another is possible. If we can do that, then surely we can rearrange molecules to change from one thing to another, right? Take some basic material and turn it into something else, like for example turning molecules of sugar into molecules of water by adding and removing the necessary elements.
If you can do that, then you’re on the path to, say, turn a pile of dirt into steak. Or turn some rocks into silk. Or, indeed, turn lead into gold and have it be stable.
I’m not going to pretend that this will be easy, won’t consume tons of money, or is going to happen tomorrow. But it seems likely that it will at some point happen in a cost-efficient way. Once that occurs, game over for the economy. Why?
Because as soon as you have one machine that can, with reasonable energy use, turn a clod of dirt into anything else, you’ve utterly destroyed the agricultural, manufacturing, and financial industries. If I can turn dirt into dinner, what do I need to go to the grocery store for? If I can transform another pile of dirt into a new tablet PC, what do I need to buy one for? If I can transform a third pile of dirt into blocks of gold, then doesn’t the financial system lose all meaning?
This happens as soon as you have one machine that can do this, because that machine will presumably be able to replicate itself. I’m sure there would be all sorts of safeguards and regulations against using them to do that, but I’m equally sure that people will find a way around those. I can promise you that within only a few months, maybe two years, of someone inventing a machine that can do this, it’ll be basically everywhere, especially if it coincides with cheap energy.
Now if all this sounds familiar, it’s because there’s a certain sci-fi franchise out there that has done much to popularize the concept.
In Star Trek, especially from TNG onward, they had something called replicators. These used very localized versions of transporter technology to create various items from base materials (maybe. It might have also been a direct conversion of energy to matter). This was used for food, drinks, toys, whatever.
The result of this, and the very cheaply-produced energy that the Federation has, was that no one had to work anymore, and that money didn’t exist. Oh, you’d have some people who worked because they enjoyed their jobs (most of Starfleet, the Picard family with their vineyard, Sisko’s dad with his restaurant), but no one worked because they’d starve if they didn’t. The concept was pretty much alien to the people of the Federation, as was the concept of money, especially to humans. Jake Sisko was often genuinely baffled by the idea of money when he and Nog discussed it, and he’s not the only one. It’s clearly and repeatedly established that the Federation doesn’t have or use money (caveat: there was mention of “credits” in TOS, but that might have simply been something Federation personnel were given to use in places outside the Federation’s economic zone).
The Federation is what’s called a “post-scarcity economy“. This means just what it seems it would; production of the basics for survival is so incredibly cheap that it’s basically free, therefore no one does without. This sort of economy is inevitable once you have something like replicators with energy production so cheap as to be basically free.
Also, the Federation is, as a result, basically a Communist utopia in the proper, Marxian sense, but that’s a discussion for another time.
I think we an all agree that life in the Federation is basically pretty super, and that it’s a great goal to aim for. The tough part is what’s going to happen in the early years when we first have this sort of technology come into our lives; namely the permanent collapse of our economy as it currently exists.
Time for one of my thought experiments!
It’s 2059, five years after the first of these “replicators” winds up appearing. Within a few months, most everyone had one. Layoffs began very quickly, as industry after industry realized they couldn’t sell anything. Oh, a handful continued to exist, because there will always be snobs who want to say, “This food I’m serving you was actually grown! And that chair? Someone built that thing!”, but for the most part, no one was making anything physical anymore. The agricultural industry shrunk to a small group of hobby farms serving the vanity crowd I mentioned above, and the banking industry almost completely vanished. Why wouldn’t it? Nothing physical has any value anymore, and even if people have money, what are they going to spend it on?
Rapidly, people wind up being homeless. No job means you can’t pay your rent. Of course, your landlord also now can’t afford to do anything with their property, and possibly won’t even be able to pay their property taxes, so that’s a thing. This leads to a bizarre situation where people have no homes, but they have their replicators, or access to someone else’s, so they’re sleeping on the streets, but doing so in silk-lined sleeping bags, on top of comfortable air mattresses, and eating steak at every meal.
Now five years after this began, unemployment is well over 80%, with the only real jobs being those in the entertainment and information sectors (people do still want art, sports, and the like, after all). At this point…
At this point…what? I genuinely have no idea what happens next. I know that at some point in this scenario, we basically end up with something akin to the living standard the people of the Federation have, but what happens to get us to that place? There’s massive unemployment, huge numbers of homeless people, and the government hasn’t even got the money to step in and help. So what gets done?
I have no idea, but I do know that in 2059, I’ll only be 87, and with technology moving as it has been, there’s a good chance I’ll be alive at this point. I hope I am, and I hope we do get technology like this. The transition from what we have now to what things will be like after this technology is going to be terrifying, exciting, fascinating, and in the end, the best thing that’s ever happened to our species.