I am an assistant professor of economics at George Mason University, and was previously a researcher in artificial intelligence at NASA and Lockheed. I have a social science Ph.D. from Caltech, and a physics M.S. and philosophy M.A. from the University of Chicago. I have been thinking about nanotechnology since 1985, when I read a draft of Eric Drexler's first book, and have specialized somewhat in economic analysis of future technologies.
By "nanotechnology" I have in mind human-engineered consumer goods designed and built to atom-scale precision. That is, we put the atoms pretty much where we want them, and do so with enough parallelism that such artifacts cost no more per pound than typical consumer goods today.
My view is that such technology will probably be available within the next half century. As with any new technology, there will be transition costs, and as with any technology with broad applicability, it will have some military and terrorist applications. Nevertheless, nanotechnology should overall have substantial and broad benefits for the world economy, and so its progress should be encouraged. Having stated my overall view, let me now make two brief comments that illustrate how economists can contribute to such discussions.
First, the overall economic effect of nanotechnology, by itself, is probably substantially less than some people hope. At best, the direct effect of nano-factories building other nano-factories is to substantially reduce the cost of physical capital for manufacturing. But since manufacturing is only about 15% of modern economies, and physical capital is less than 30% of the cost of manufacturing, this only offers less than a 5% direct improvement in economic efficiency. Cheaper manufacturing may allow more efficiencies in other areas of the economy, but such effects will probably be modest. Even so, there is little doubt that a 5-10% net growth in the world economy is a very good thing.
Second, the potential for dramatic destabilizing military or terrorist applications seems to be greatly over-estimated by some people. A narrow technology like an atomic bomb, which has a few mostly military applications, and which suddenly gives a single group an ability many orders of magnitude stronger than that of other groups, is very different from a general purpose technology like the computer, which has wide applicability and which is steadily improved by many diverse groups.
Nanotechnology is far more like general purpose computers than it is like atomic
bombs. One group's computers might suddenly become twice as cheap as others
for a time, but such changes are now frequent and temporary, and of little cause
for social concern. Similarly, as long as nanotechnology is primarily pursued
by many economic actors who compete to profit from its many potential applications
through small improvements, I see little cause for special social concern about
nanotechnology. There will of course remain the standard technology policy concerns
of intellectual property, standards, externalities, inequalities, and so on,
as with all new technologies.
Assistant Professor of Economics, George Mason University