I disagree about the software/cell phone analogies. The problem in software is that we we don’t yet have a mature software industry. People are still inventing new kinds of applications, and new applications are enough better that people are still willing to pay for them. But this is clearly showing signs of slowing down. Remember back in the 90s when you needed a new computer every other year just so you could run the latest?
But nowadays things have slowed down. Do you really need Office 2007 when you already have Office 2004? Or OpenOffice? What will the office suite business look like 10 years from now? There will still be people making money from it, but is it going to be the cash cow it is now? Same with operating systems. Sure, it’s a cash cow now. But in 10 or 20 years?
I think we’re going to see a move away from creating new applications and towards customization and service for existing applications. So a database software doesn’t cost anything. But somebody’s got to set it up, somebody’s got to figure out the front end, somebody’s got to enter/migrate the data, somebody’s got to figure out what happened when things go to hell, and so on.
Cell phones are a similar case. They aren’t mature technology–just look at the changes from just 15 years ago when people were still using beepers, for crying out loud. And now you’ve got your smart phones which aren’t quite able to replace your desktop or laptop, but that’s the trend. But what happens when the cell phone/smart phone matures? How many more bells and whistles are people willing to pay for? A phone that you can use to access the internet and listen to music and watch movies and take pictures is a far cry from the beepers of the 90s.
So people will pay for the latest and greatest–if the latest and greatest really is better. I take your point that given human ingenuity there will always be something that’s brand new that everyone wants, and the more human ingenuity is spent on coming up with new things rather than subsistence farming or working in a sweatshop factory, the more new things we get.
The trouble as I see it is that there will be lots of people that will be effectively unable to produce anything of much value in the future. Luckily for them, providing the basics of life will be very inexpensive. So inexpensive that it would be more trouble than it’s worth to force them to work for a living, because it would cost more money to make them work than they can provide.
So there’s going to be a society where lots of people have a comfortable living but don’t work and don’t have access to the latest and greatest. And the upper tier will work at jobs that don’t look much different than the jobs they have today. They work hard providing the latest and greatest but the only thing worthwhile for them to buy is the latest and greatest, because nearly free open source goods are there for the taking. And so their work becomes mainly about status, and the money they get for their work isn’t worth much.
People still want to be famous musicians and actors and game designers and writers, but not because of the material comforts those positions provide, but because of the status. And this tends to drive the fees they charge for their creative output down to zero, since they are competing against public domain/pirated stuff. They care about being famous, and it’s more important that 100 million people see their stuff than they get a dollar every time someone sees their stuff, because what good is $100,000,000? What are you going to buy with that that’s better than fame/respect/status?
Modern day entertainment/software fortunes are based on the idea of a million average guys ponying up $8.99 or $14.99 every few months for the latest music or game or movie. But how is that going to work when the average guy doesn’t have a job and doesn’t need a job? You can become rich by being a rock star, but the riches are just part of the status boost.
So I see a situation that isn’t anything like socialism, but where most things including entertainment and education don’t cost anything to the end user. People will work, but much of their work except for the really talented won’t be compensated work. People with an inclination will contribute, like people contribute to Wikipedia. There will be a capitalist economy, but it will be important only for some people. It might b that people will work really hard for goods that seem really esoteric to us. Never underestimate the human need for status. Or they might sit around and watch TV all day. Never underestimate human laziness either. I can’t predict the mixture, but I see most people as pretty lazy. It’s not like they’ll watch TV all day either–they won’t be tied to a particular location by their crappy job. They can do whatever they like as long as it doesn’t cost any real money.