Implications of a machine economy

Availability – not ownership – for items we don’t use much

To have everything our heart desires is a primitive drive in life. But our ecological footprint1 is problematic as it is already. Our environment cannot sustain ever increasing consumption. And that’s with an existing inequality in material possessions in the world right now. What happens when Southeast Asia and Africa go to western levels of consumption or above? We argue that the solution is moving from an economic system of ownership to an ‘availability economy’. Autonomous machines are making this paradigm shift possible.

What do you think will happen if the light parts get the same ecological footprint as the darkest part? Source.

The issue with current patterns of consumption

Right now we are able to produce and dispatch goods at an ever increasing speed due to advances in automation, and fossil fuels replacing human labor. This means consumption is easier than ever. But at a severe cost to the environment. Even if we could hyperoptimize the production and logistical processes, it’s unlikely we’ll be able to supply the worlds future demand within its biocapacity2.

This way overconsumption is becoming a huge social and ecological problem, but not one that is easily contained. If it can be contained at all. It’s sort of a Pandora’s box. Once people get used to a certain level of material wealth, it’s hard to revert that.

Rather than fight a primal instinct or accept the inevitable, we think there is another way out. The idea is not new (because it boils down to the sharing economy), but the perspective is new.

The availability economy

We propose shifting away from capitalist consumption3 towards consumption as the usage of goods: the availability economy. The idea for redefining consumption goes back to the original meaning of utility: a measure of pleasure or satisfaction.4 In economics utility is used to understand the choices people make, by trying to combine happiness or satisfaction with monetary value.

Utility from ownership

Historically, goods (‘stuff’) were scarce. Automation during the industrial revolution increased the supply, but the availability was still limited by logistics. Shipping a good still required extensive human involvement. This cost a lot of time and effort, and therefore limited the ability to enjoy that good. The logistical component created additional scarcity on top of the physical scarcity of a good.

Because of that, up until recently, ownership of a good has been the preferred state for utility. If you own it, it is available to you at your convenience.

Ownership comes at a cost: the cost of initial investment, storage, maintenance, and depreciation for instance. But generally the balance tips towards ownership being favorable to not owning the good. Especially with the price of goods dropping due to reduced marginal costs of production and shipping. We experience high utility from ownership of goods, because – again – it makes stuff available when we want it.

Enter autonomous machines

Autonomous machines completely revert the cost-benefit analysis of ownership. When a robot can bring the good you occasionally need and pick them up when you’re done, is it still beneficial to buy, store, and maintain a host of tools, devices, and gadgets? Only to find out they are not ideal for the job when you want to use them? Or would you rather pop up an app, order the best tool for the job, and have it delivered just in time when and where you need it?

Availability – not ownership – for items we don’t use much
The things you own can end up owning you.

Utility from availability

With industrialization, machines and robots reduced the scarcity of good by taking over parts of the production process from humans. Now autonomous robots will reduce scarcity from logistics. An example from a previous post illustrates what this would look like:

“I don’t want a drill, I want holes in my wall”

Instead of owning a drill, we could have an app to order a high powered drill when I want to hang a painting or some shelves. And once I’m done, I want to be able to throw my drill out of the window, and it should be up to the drone to catch it and take it to the next person who needs it, or go to some storage until it is needed again.

The result would be that instead of 1000 households in a neighborhood owning a suboptimal power drill that is used twice a year, there could be a DAO5 that has 20 of the best drills you can buy, for a fraction of the price. The drone gets its energy from solar panels, which allows distribution to be emission neutral. Regarding availability: if requests suddenly spike the system could work on a first come, first served basis or prices could go up to discriminate between the utility the drill would have for the people who demand it.

This example has its technical challenges, but they are hardly insurmountable. The mechanism however is an interesting blueprint for sharing all kinds of goods among a population. Autonomous logistics reduce the need for individual households to own such goods. This implies huge efficiencies in mining, production, and recycling, with increased usage of the goods that are produced. But most importantly, we’ve reduced the material footprint of the goods while increasing utility!6

But how would that work?

We’ll discuss the intricacies of the availability economy, its economic impact and how it can benefit sustainable energy in a future post. We realize that this new ecosystem depends on high availability of relevant data, development of autonomous technology, the ability for machines to be independent economic actors, changes in tax and regulation, and perhaps most importantly a shift in mindset from consumers. It also needs a form of shared ownership that benefits the community, instead of the investors that propped up the idea and monopolized it, like Uber and AirBnB. But we think this idea allows us to have our cake and eat it too. All the while reducing our ecological footprint by reducing industrial output, instead of increasing it. This gives us quite a bit of pleasure and satisfaction.

About the author

Hanna van Sambeek

Macroeconomist with a heart for sustainability, looking for the next challenge. My goal in life is to leave the world behind a lot cleaner, healthier and fairer than I found it.

Bas van Sambeek

Communications strategist, specialized in the positioning of high tech products. I help innovative start-ups and fast growing companies in high tech industries clarify their story through positioning and storytelling.

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Implications of a machine economy