The Economic Math Behind Free Market Ecology
Originally published on Botsfordism Substack on January 24, 2025.
Sher examines how different economic systems approach optimization and their implications for humanity’s future alongside AI and robotics.
Pure Command Economy
In centralized systems where one person decides resource allocation, the outcome depends entirely on that individual’s judgment. Historical examples like Pol Pot’s Cambodia demonstrate the dangers. With advanced robotics, a single dictator could reshape entire planets or destroy civilization with poor decisions.
Communist Economy
Marx’s vision equated labor with value, but without price signals, planners couldn’t efficiently allocate capital. When AI eliminates labor entirely, the system becomes pure bureaucracy. Sher warns this creates a “doom loop”—leaders reduce population to increase per-capita resources, eventually leaving one person in charge (the “robot apocalypse”).
Capitalist Economy
Capitalism optimizes by reducing labor costs through tools and technology. However, when robots perform all work, Sher identifies a “divide-by-zero situation.” Only natural resources constrain production, leading to environmental collapse and resource conflicts. Eventually, bureaucratic resource management transforms capitalism into communism, repeating the population reduction cycle.
Free Market Ecology (FME)
Sher’s proposed alternative maximizes resource value—renewable and non-renewable. Each person receives an Environmental Sustainability Impact (ESI) budget for daily consumption. Automated production is free if within ESI limits. Profit comes from resource-efficient innovations, not labor savings. This prevents both environmental destruction and authoritarian collapse.
Future Evolution
Sher envisions humans powered by electricity through bioengineering—solar-panel legs and metabolic systems designed by AI. This enables space colonization while preserving Earth as a “vacation planet,” satisfying the “Crowded Galaxy Theory” that advanced civilizations only accept resource-respectful species.
Humans Remain Valuable
At 70 cents daily in electricity costs, humans remain more economical than machines for complex tasks like exploration and thinking, ensuring our continued relevance.