Humans are the universal economic bottleneck

by Dach3 min read18th Oct 202115 comments

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There's this idea in computer science wherein the maximum theoretical speedup that can be acquired with an arbitrary number of processors is related to the percentage of the program which can be parallelized. If we have two segments of code that take the same amount of time to execute with one CPU core in which the first segment can't be parallelized at all and the second segment is perfectly parallelizable, we can only run the program twice as fast, no matter how many CPU cores we have.

There's a similar idea in economics. It seems like the most powerful and civilizationally relevant feature controlling the medium to long term change in the price of goods is the extent to which the production of that good can be decoupled from the expenditure of man-hours. Some economic activity isn't "parallelizable" using current technology- we can't practically make that activity much faster without building powerful substitutes for humans, technology which is (for now) mostly out of our reach...

For example, it turns out that moving stuff over land is not easy to decouple from human labor without self-driving cars. There are two methods of overland transportation worth noting here: Cars and Trains.

Due to the nature of our road infrastructure, there's a pretty clear upper bound on how efficient car-based transportation of goods can get. There are legal limits on the allowed speed and size of vehicles, so without self-driving tech, we can't change how many man-hours need to be spent per cubic meter per kilometer.

Train-based transportation has its own problems which limit its ability to dominate overland transportation. Namely, our train transportation network is incomplete in that goods must still be ferried to their final destination by cars, so overland transportation is only some % "parallelizable".

Using this we can predict that overseas transportation would be really efficient compared to overland transportation. I suspect that Nautical miles per cargo container per hour per person can be pushed extremely high using current technology, laws, port and canal infrastructure, etc. 

And indeed this is true:

Be warned that overland freight for even short distances can often be almost as much as ocean freight for thousands of miles (I recently paid $2000 for a 20′ container to be shipped from Shanghai to Los Angeles and then $1100 for it to be shipped 30 miles from Los Angeles to San Moreno). 

Our ability to recursively reinvest our production is most strongly limited by these required industries which are mostly bottlenecked by the number of humans and how long they're willing to work, neither of which are easy to manipulate and neither brings the sort of powerful prosperity that characterizes modernity.

EDIT: Someone commented that other factors are at play that makes cargo ships efficient. I do not disagree- this was just an example of the sort of weak estimate which could be made using this idea. I am interested in determining how important this effect is in the case of cargo ships, so I will do a short analysis.

Compare to semi-trucks which can carry roughly 40,000 kg of material. We will say these trucks move at 100km/h. The wage of a semi-truck driver in the U.S. is roughly $20, so combing we have, so it costs $1 to move 200,000kg one kilometer- or rather, that is the wage component.

The distance between Shanghai and Los Angeles is ~10,000km, and the limit weight of a 20ft shipping container is about 80,000kg. Assuming wage costs for ship crew are negligible (this should cancel out with previous generous estimates), we have 800,000,000kg * km for this trip for this container. If the same wage were required per kg per km as in the semi-truck case (note much is ignored here for the sake of approximation), this would cost an additional $4000. For comparison, according to this site, the cost of shipping 80,000kg from Shanghai to LA is $14000.

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Humans also bottleneck the maritime side of cargo shipments via artificial scarcity in the form of cartels and monopolies. The referred $2k shipments could have costed even less, but there's rent capture in it driving final transportation prices higher than they could be, and payments to on the ground operators lower than those, too, could be, the resulting spread going into the hands of the monopolists who successfully work around legal impositions from as many jurisdictions as possible.

I think part of the reason overseas transportation is so cheap is energy use - ships use far less fuel per cubic meter per kilometer than any other form of transport.

I would expect fuel efficiency to be related to the size and complexity of the engine. Producing some amount of force is going to require the same amount of fuel assuming energy loss due to resistance/friction is the same, and the engine is the same.

If true, we could e.g. have absurdly large trains on lots of rails? I would expect energy loss due to rubbing on rails and changing elevation to be similar to energy loss due to rubbing on water.

As you double each dimension, capacity octuples, drag quadruples, but rolling resistance octuples.

Ships only have drag from the water, but trains also have rolling resistance from the tracks.

This means trains don't get significantly more efficient as they grow larger, but ships do.

Interesting, thank you.

Is the quadrupling of drag and octupling of rolling resistance related to the assumption that drag is proportional to the surface area of the side on which the drag is produced, and that rolling resistance is proportional to weight? Either way, cost would still decrease due to larger and more complex engines, as rolling resistance per kg would not change. 

Of course, railway sizes are fixed, so there is little to be done. I was just speculating where the relative efficiency of cargo ships comes from. I made an edit at the end of the post which contains a very rough approximation of how large savings on wages are in the case of cargo container ships.

Is the quadrupling of drag and octupling of rolling resistance related to the assumption that drag is proportional to the surface area of the side on which the drag is produced, and that rolling resistance is proportional to weight?

Yes. It's a little more complex than this since rolling resistance is irrespective of speed, whereas drag increases with speed. But if you're aiming for efficiency you'll go at low speeds, so we can hold speed fixed and see what happens as we scale.

Either way, cost would still decrease due to larger and more complex engines, as rolling resistance per kg would not change. 

Even if the engine is 100% efficient, you still lose energy to drag and rolling resistance, so sooner or later increased engine efficiency doesn't buy you very much.

I was just speculating where the relative efficiency of cargo ships comes from.

I think it's the fact they're so much larger, and so drag/capacity is very low.

Indeed.

Travelling by boat/ship, and transporting things by boat/ship, is 'Lindy', as are bicycles.

If you’re not already aware, you would like Henry George’s Progress and Poverty in how it deals with a framework for thinking about Labor and Capital.

Can you expand on what you mean by "universal economic bottleneck"? Given two bottlenecks - say humans and capital investment in a sector - are you saying humans are:

 - always slower? not true imo, sometimes all the humans already interested are not rich, so they need to wait for the rich folks to come invest in physical resources

 - more necessary? not true imo, both are just as necessary, project is dead in the water without capital or physical resources

I agree with your statement is as broad as "human innovation is responsible for exponential tech" - but then I'm not sure if that's new info. Ofcourse apes would not grow at the same rate we do.

For everyone to become richer without working harder, we must develop technologies that allow more work to be done per man-hour. Aside from working out distribution inefficiencies and similar, this is the unique limit on prosperity. This is what I mean by "humans are the universal bottleneck"- we only have so many man-hours, and any growth is going to be of the form "With the same amount of hours, we do more".

Some segments of the economy have not had as much growth in the above department. For example, houses are assembled manually- all major parts must be done by hand, many with the assistance of only hand-held tools. Because we require shelter and the choice way of getting that shelter is owning a manually built house, this is a drag on the economy. 

Domains such as this which have not been as revolutionized by automation have scaling costs due to how directly they are pegged to the price of labor- in particular, houses of constant size cost the same general fraction of our income (if not more) despite real GDP per capita having grown significantly over time, because richer workers demand more pay. Why aren't houses cheap? This is one of many reasons, and doing some quick googling on how many man-hours are required to build a house, the main factor in many areas of the united states.

Is this way of thinking "new"? Surely not to humanity, but hopefully to the reader.

Aside from working out distribution inefficiencies and similar, this is the unique limit on prosperity.

Why is this limit unique? Why can't we be working on "distribution inefficiencies and similar" for the next 100 years?

Maybe I'll ask this, does your statement regarding universal bottleneck apply explicitly to humans? Or does it also apply to apes and bacteria and AI? Cause some of it seems tautological - doing more total work means finding ways to do more work per unit time.

Why is this limit unique? Why can't we be working on "distribution inefficiencies and similar" for the next 100 years?

In the case of real GDP per capita per hour worked, this limit is exactly unique- "distribution inefficiencies and similar" doesn't apply. Indeed, this is tautologically true as you say. Think about what it would look like for an increase in real GDP per capita per hour worked to not have the form of "Something allowed for more work to be done per hour per person". It wouldn't look like anything- that doesn't make any sense.

I would completely ignore my comment on "distribution inefficiencies and similar" until you know what I mean by this. To explain my comment, real GDP per capita per hour worked is not the same as the nebulous "prosperity" I was referring to, which also contains some level of preference for how material goods are distributed.

Maybe I'll ask this, does your statement regarding universal bottleneck apply explicitly to humans? Or does it also apply to apes and bacteria and AI?

Because we particularly care about how much work humans do, and how wealthy they are. We do not really care about the work hours or prosperity of bacteria. Economic productivity is measured relative to how much money people have and how much they must work to get it. Just read my previous comment and/or the post again- this would seem to be a really basic sort of confusion that I can't fix for you.

Yes, and to go further: the value that humans bring to these economic activities, and on which they are bottlenecked, is almost entirely their mental capabilities.

There are a few jobs where people joke about just doing things that a trained monkey could do, but it's only funny because a trained monkey couldn't actually do them, especially when things don't go entirely to plan. There are plenty of jobs that rely on social competence in dealing with other humans, but that's still mostly mental capability.

There are also plenty of jobs that couldn't (at least at first) be replaced by smart robots with AGI, but they're not really so relevant to questions such as limits on economic growth.

I am not convinced of the statement in the title based upon the argument presented in the text. For one, I expect that very soon, trucks will be self-driving, and even if not, there is not enough generally applicable logic or variety of specific examples to support a claim of universality.

Self-driving technology is advancing and will soon(ish) allow us to move cars without humans being directly involved, except in terms of maintenance and management. This will be a major boon because it will partially remove humans from the equation- the bottleneck is partially removed. This has no real bearing on the title statement- I even remark about this in my post.

The "universality" here is trivial- here is a copy-paste of part of my response to a similar comment:

For everyone to become richer without working harder, we must develop technologies that allow more work to be done per man-hour. Aside from working out distribution inefficiencies and similar, this is the unique limit on prosperity. This is what I mean by "humans are the universal bottleneck"- we only have so many man-hours, so any growth is going to be of the form "With the same amount of hours, we do more".

Imagine if every area of economic activity was automated- humans were fully removed. This would look very sci-fi: think of von Neumann probes. In this situation there is no practical limit- the probes will expand and convert our entire light cone. Assuming constant population, per capita wealth would approach 50 billion stars, I guess.