Fab labs are going to rock the world economy like no technology has since the advent of the internal combustion engine. People wonder about the future potential of the Internet – this is a big part of it.
At first, fab labs will be a novelty. They will be hailed as a way for U.S. manufacturers to compete with cheap overseas labor. For the most part manual labor will be eliminated altogether. These first fabricators will be large machines capable of a narrow range of manufacturing. Consumers will be happy with the new goods, mostly plastic toys at first, cheap and marked "Made in America." The Chinese will grumble.
Then some electronics manufacturer, perhaps even a Japanese firm like Sony, will begin single-step fabrication of electronics in factories close to the markets – often right here in the U.S. These electronics will be cheap and tough. The toughness is fortunate because they won’t be repairable. They will be a solid piece of plastic with the electronics embedded within. The electronics will be embedded, printed really, within the plastic like another layer of ink on a page. Again, consumers will be happy.
Around this time a large home-building operation will start fabricating homes. The homes will be compared to Henry Ford’s Model T. A three-man crew will be able to run a fabricator capable of producing a completed home within three days. The homemaker will run three shifts so that the fabricator can operate night and day.
Homebuyers will love these new cheap homes. Homeowners will grumble as home prices dip.
But the real shakeup will begin when some enterprising computer firm offers the first home fab lab. It will connect directly to the computer and look like a large printer. But it will also "print" solid objects. The first models will be capable of fabricating simple things. Manufacturers will laugh nervously at these first models. "Who wants to pay $5,000 to wait 48 hours to print a toothbrush?" they will ask. And they’ll be right. At first just a few nerdy enthusiasts will have them. But they’ll begin writing and exchanging fab plans.
That whoosing sound you’ll hear will be money flying out of the manufacturing and distribution sectors into computer companies (and elsewhere). The home fab labs will get cheaper, faster, and more capable.
And the file sharing black market will grow by leaps and bounds. There will be congressional hearings as companies like Apple and Motorola complain that their intellectual property, the plans for iPods and telephones, are being cloned or just flat stolen and posted on the Internet. There will be efforts to outlaw or limit these devices. People will be jailed for fabricating illegally powerful new fab labs. Others will go to jail for intellectual property theft. But consumers will demand better and better fab labs. Ultimately the majority will rule.
We’ll get the fab labs, but intellectual property theft will be prosecuted more and more seriously. Other types of petty theft will become less common. Why shoplift when you can steal the fab plans for the Playstation 5 off some obscure website or file sharer? File sharing will be heavily policed, but the black market will always be with us.
There will be other changes. Brick and mortar retail stores will be converted to public spaces or abandoned. Some public spaces will be restaurants, coffeehouses, clubs, bars, and churches. But multi-use space will be in increasing demand as connectivity tools allow easy coordination of impromptu events.
My puzzles: Say this were true. What general investments should you make? Would we expect real interest rates to rise or fall? The growing wealth of the future suggests that the marginal utility of future dollars will be very small. That suggests high real rates of interest (intuition: future dollars aren’t worth so much, so you need a high return to "deliver" dollars into that period). That being said, time preference would be relatively low, given higher wealth. The average product of capital would be high but how about the marginal product of capital? Capital would be so plentiful you might do very trivial things with it. When Western economies were relatively stagnant, were real rates of interest higher or lower?