In his book The End of Poverty, Jeffrey Sachs discusses the global poor and how to eliminate poverty within a generation. The idea is that global poverty, described as those who live on less than a dollar a day, could be eliminated by the year 2025 with the careful use of development and aid. He describes the problem as a poverty trap in which the global poor are unable to reach the “bottom rung” of the economic ladder; once that rung is reached a country and a people could pull themselves out of poverty and into the market economy. The dilemma that Sachs attempts to tackle is how to boost the world’s poor to reach that rung.
Economists love simple theories and the poverty trap is no exception. The mechanics of it are very straight forward…your income today influences your income in the future. What you have today directly impacts the food you can buy, the medicine you can buy, what you can invest in your children’s education, the seeds you can buy to grow more food these are all determined by current income and thus determine what you will have tomorrow. If you cannot buy enough fertilizer to improve your crops, generate more income, and increase spending power you are trapped in poverty. Imagine the game “Shoots and Ladders”, but every ladder leads directly to a shoot. To deal with the poverty trap dilemma Sachs advocated for a clinical economics stating that countries like people require a unique diagnosis to treat poverty.
I am not entirely convinced that the poverty trap exists as I don’t typically put stock in the rational actor model, which is implied by the poverty trap for reasons I will not address here but is discussed in the book Poor Economics. However, for the sake of argument lets say that it does exist and the world’s poor really do need a boost to get out of poverty. Enter the singularity…
In math and physics the “singularity” means something not behaving as it did, but instead growing by leaps and bounds. It is the threshold in the predictability of human development where past and present models can no longer be used to give reliable descriptions of the future due to the creation of a strong A.I. or enhancement of human intelligence.
Sound to outlandish? The expanse of technology is exponential as each piece builds upon the advances of the last. Think about the advance of technology in your own life. In the 1969 the U.S. put a man on the moon and one of the biggest expenses was being able to fit a computer into one room, forty years later your iPhone is thousands of times more powerful and at a fraction of the price. Not to mention it fits in your pocket. It’s not unreasonable to think that the iPhone 20 will be the size of a red blood cell, connect to a new internet we haven’t imagined and cost 50 dollars. This is also known as Moore’s Law.
So whats this got to do with macroeconomics and the global poor? Simple. This is the next technical frontier that represents a post industrial economy. Nanotechnology represents the ability to make things very cheaply. Nanotech could produce food, building materials and fuel without the energy intense process of the Industrial Revolution because it builds on an atomic level, thus, is the best form of recycling. Give me your tired, your poor. Your broken and used molecules yearning to be free…and I’ll make you a house and a hamburger.
In short the singularity allows the global poor to climb out of poverty traps that Sachs mentioned because food, shelter, clothing and medicine will be no cost. In the post industrial economy the productivity (GDP/hoursworked) is hugely greater because technology has radically reshaped our global society.