We hear the term "free" being used a lot of times in relation to online services.
Can anything truly be "free" though?
(Just to clarify I mean free in terms of price rather than liberty.)
I've only read about 10% of this book so far but like some of the best reading material it has stimulated a lot of thought for me.
I am not an economist and so will apologise in advance for any misunderstandings or errors I make.
The Atom Economy vs the Bit Economy?
Anderson uses two terms to describe the different types of economy that we have now:
The "atom economy" which is based on products which are physical and the "bit economy" which consists of computer software based products.
Atom based products generally get more expensive in price mainly due to:
- Component material scarcity.
- Comparitively high cost involved in production and duplication.
- The logistical costs of transporting a physical entity.
Bit based products get cheaper in price over time due to:
- Moore's law and other technological advancements resulting in a reduction in computing/server/network costs.
- Nearly zero cost of duplication of digital data which dimishes over time in line with point 1.
- Nearly zero cost of transportation using the web which also diminishes in line with point 1.
Note the above points assume that both types of product require similar amounts of human input for sake of simplicity.
Bit and atom are not completely separate
It is obviously a bit more complicated than that because computing is based on the atom economy.
You can't compute without physical devices to do the computing.
Also Moore's law is not guaranteed to always exist and there are current problems with shrinking transistors further as we have seen in Intel's recent adjustment to it's Tick-Tock cycle.
It is nevertheless a good simplification to make when discussing these issues from a theoretical and philosophical perspective.
This got me thinking along an interesting philosophical line.
Can we ever have something that is truly free?
Energy is the main cost if we remove humans
Right now you still need humans to put in time and effort to create both types of product but one could envision a future where AI removes that role at least in certain cases.
At that point I envision the main cost being the energy expended in producing them and manipulating them.
This is the main advantage for the bit economy vs the atom economy.
The energy cost of manipulation is exponentially smaller than for physical products and it is continuing to get smaller all the time.
Could it ever be free though?
Let's put aside the issue of the first law of thermodynamics for purposes of a thought experiment:
Let's say someone discovers a form of what is described as "free energy" which anyone can tap into and does not run out (already it is sounding implausible).
This might appear to reduce the gulf in the cost advantage between atoms and bits to a degree, although material scarcity would still be a factor.
Would bit based products essentially be free at this point?
Bits STILL need atoms even with "free energy" hence there will always be a cost even if it is small
This brings me to the crux of my argument and it all goes back to the point about the fact that bits can't truly be seperated from atoms.
We will always need atoms - i.e. physical items in order to interact with the information in the form of bits.
Further the energy we use will also need to be extracted and manipulated using atoms. This will always introduce a cost.
The cost may proportionally get smaller and smaller with time but it will always be there.
So in my opinion "free" in the absolute sense is an abstract and theoretical concept that cannot exist in the universe as we know it.
One analogy would be to think of it like infinity. A lot of people talk about it like an actual thing but it is essentially a theoretical construct.
Actually free vs practically free
One practical definition of free might be that a point may be reached where the cost of a product becomes so low that it plunges below the lowest measurable value within the economic system.
This may sound far fetched but if we look at it from the point of view of information then one might consider that every system has a level of quantisation and resolution.
I'm not sure if I have the intellectually capability to even describe this concept adequately. I will apologise if that is the case.
Anyway I will attempt to explain using an analogy:
My clumsy analogy
Let's say our entire system is based on the dollar. Each dollar is composed of a hundred cents.
Let's say in this hypothetical world we only ever round up or down by one cent. One cent is the limitation of resolution in our world.
It is the threshold of cost. In this hypothetical world everything with a value of equal to or greater than 0.005 cents has a cost that can be expressed. Anything less than that is invisible to our financial system.
So if the cost of a particular item or service multiplied by the number of transactions involving it falls to less than this threshold value it becomes "practically free".
Obviously in our actual world things are a lot more complicated but there may be a threshold where the same effect occurs in that the cost of an item becomes so low that it is essentially below the threshold of quantifiable value in the system.
At that point it becomes practically free. In my opinion (which could well be completely wrong) this is the closest we can get to something actually being free.
What do you think?
I'll end it there and leave it open for everyone else to discuss. I'm not an economist so I will apologise in advance if I have made a fatal flaw in any of the reasoning here. I find this subject to be fascinating though.
Please have your say in the comments below - let's get back to having more of the vibrant discussion we used to have in the early days of Steemit:)
Thank you for reading.
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