April 22, 2013
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Blogger Reference Link http://www.p2pfoundation.net/Transfinancial_Economics
Humanity is now entering the fourth economic paradigm. First we were hunter gathers, second farmers, third the industrial revolution. Now the fourth paradigm, where transhuman entrepreneurs, utilizing both neurological and machine augmented intelligence, are replacing capital as the economic driving force in free market economies.In the last 40 years computers and robots have replaced humans in more than 9 million traditional jobs. This trend is accelerating as Intelligent Self-Educating Computer Systems (ISECS) like WATSON, WolframAlpha, Quora and others are moving from the lab into the cloud.
Humanities golden age? Possibly, but like the start of the industrial revolution it is the transition that’s scary, creating unemployment, pain and suffering. Today transhuman entrepreneurs are pulling us into a new age where bioinformatics, nanotechnology, 3D printers, ISECS, and robot slaves will do our work, freeing us for love, play and fun.
For this document we define Transhumans to be free thinking, courageous doers, who, use augmented intelligence, to harness the frontiers of human knowledge and technology.
During the industrial revolution vast amounts of capital were needed to start and build railroads, steel mills, auto factories and giant retail businesses like Montgomery Wards. The world economies were driven by the need for capital, hence the name capitalism. Today most American steel mills have closed, General Motors has filed for bankruptcy, and Montgomery Wards is history.
The fourth economic paradigm is being created by transhuman entrepreneurs who use the internet and advance computer systems to augment their intelligence, enabling them to better utilize our growing scientific and technological knowledge. Look at the market value of companies started by transhumans like Bill Gates, Steve Jobs, Peter Diamandis, Ray Kurzweil, Larry Page, Sergy Brin, Mark Zuckerberg and thousands of others. Rather than needing capital, these companies are generating trillions of dollars of surplus capital.
Golden age of opportunity: Because scientific and technological knowledge is developing exponentially, there are more entrepreneurial opportunities today than at any other time in human history. Best of all. there are no formal educational requirements, school dropouts like Bill Gates, Steve Jobs and other entrepreneurs with even less education outnumber those with Ph. Ds..
Today 90% of all scientists and inventors that have ever lived are alive and working. They are producing more new opportunities every 15 years, then were produced in the last 100. And the last century was very inventive with TVs, computers, space travel, washing machines, airplanes, autos and much more! Check out the website http://www.kurzweilai.net/, where their daily newsletter documents five to twelve new scientific and technological advancements. Many of these discoveries point to new products and industries.
Entrepreneurs themselves are a major source of new opportunities. When the Wright brothers invented the airplane they created opportunities for airplane manufacturers like Boeing. They also created thousands of second tier opportunities. These, for the most part are low tech, like food services, airport support, travel agents and manufacturers of airplane seats, etc.. It is in this second tier where historically businesses have earned the most money and created many new jobs. So, the more entrepreneurs there are, the more new opportunities there will be.
Oh yes, there are going to be shortages, this is great news. Because history shows that shortages are opportunities for creative problem solvers. Look at energy today, while doom and gloomers are crying in their beer, there are over one hundred-thousand scientist, and inventors working on the energy challenge. Those who find answers will win big. Already companies are earning millions and creating new jobs, building wind turbines, solar collectors, and biofuel plants.
Another way transhuman entrepreneurs create jobs for others is by spending money. Buy a wool coat, and you create work for the coat maker, the weaver, and the sheep rancher. And when an entrepreneur banks money the banker loans it out to someone who spends it. And the billions entrepreneurs give to charities, are also spent creating more jobs. In fact the source of all paying jobs on planet earth is people spending money. So unless entrepreneurs burn or bury their money, every penny they earn goes to create work for others.
Check out the following to get a glimpse of the awesome world that todays transhumans are creating. 1) ABUNDANCE by Diamandis & Kotler an awesome book about transhumans who are creating the future. 2) Wikipedia’s list of emerging technologies - a very exciting and long list indeed. 3) Kickstarter and other innovative ways of funding transhuman entrepreneurs.
Evolutionary blind side. The big challenge is to deal with a linear bias rooted in millions of years of human and pre human evolution. Exponential rates of change are counter intuitive. I find that my own misjudging of exponential rates of growth to be embarrassing for I have been a systems programer for 30 years dealing with binary numbers and have read and reread Ray Kurzweil’s awesome book the Singularity is Near. Yet when I ran the following number problem through my spreadsheet, I still said wow, when I saw the answer.
Gather 20 handfuls of firewood, each weighing one pound and you end up with a pile that weighs 20 pounds. On the other hand if each handful gathered increases in weight exponentially, 1, 2, 4, 8... pounds then gathering 20 times will result in a 1 million pound wood pile, and a denuded forest. (wow?)
Not only do exponentials move into warp speed after the knee of the curve their slow start makes them look benign in the beginning.
Robots are a good example, 40 years ago people were making wild predictions that robots would soon be taking over everybodys jobs. But it didn’t happen for robots proved too expensive, stupid and slow. Yet in 2011 Foxconn announced plans to install a million robots in it’s Chinese factories replacing low cost Chinese workers. For the last 40 years the cost of robots has been dropping exponentially, and their intelligence and speed increasing exponentially, it looks like today robots have passed the knee of the exponential curve and the rate of deployment will be?
Caution: As capitalism rolls over and dies millions will suffer under it’s decaying corpse. One sign of a major paradigm shift is when yesterdays good advice no longer works.
Forty years ago going to college was a financially smart thing to do. Today according to government statistics 54% of college freshman will drop out without getting a diploma. Then of the ones who earn a diploma 51% will after graduation end up working at a job that doesn’t require a college degree, like flipping burgers. This means that 77% of those entering college, spending money and time, taking out student loans, will end up being harmed financially.
But look at the numbers, doesn’t it pay to go to college? Yes, and No. It works like this. Out of 10 million graduates 5 million are surgeons, doctors, dentists, lawyers, engineers etc. many with years of seniority. On average these 5 million are earning $70,000 a year. And then there are the other 51% who have had to take jobs that don’t require a college degree, secretaries, delivery drivers, or flipping burgers etc. and their average income is $15,000 a year. Add all the earnings together and divide by 10 million and you get an average of $42,500 a year and this is the impressive number told to high school students. What would you think of a drug company whose drug harmed 77% of those who took it but who advertised using only testimonials from the 23% who benefited?
Forty years ago governments could stimulate their economies by increasing the money supply. But companies started by transhuman entrepreneurs as of 2012 have billions of dollars of surplus capital. Consequently they don’t need all of the easy money.
So what are investors and financial institutions doing with this flood of easy money? First thousands of large and small outdated businesses are borrowing more money than they can manage effectively. Results? A sharp increase in bankruptcies. Then there are the bubbles, remember the dot-com boom and bust when millions of people and their dogs bought blue sky dreams. And of course there was the great housing bubble, when financial institution sitting on billions of dollars of excess liquidity, with inflation nipping at their heels. They became ever more desperate to put their cash to work, there came along some clever people who devised mortgage-backed securities, which allowed banks and others to offload mortgages with little or no accountability. As the flood of capital continued to grow, many of these financial institutions made ever more marginal loans. Then when the increased capital didn’t create a high growth economy, the housing bubble burst in 2008.
Forty years ago we help and encourage poor third world countries to set up colleges and universities. We trained many of their young people who returned home and became professors. Now these third world universities are very demanding, with more work and less social life than most American schools. The majority of students are majoring in engineering, math and science. The result has been more highly educated young people then these third world economies can employ.