Productive Recursion

Production methods used to lower cost of products when simplified for rapid personal/localized fabrication.

Introduction

Technological recursion means the substitution of information and productive capacity to produce something from parts or from raw materials instead of procuring an off-shelf product. An example of deep technological recursion is when one uses an induction furnace to produce useful metal from melted scrap instead of purchasing that metal from a supplier. Another example is replacing the power unit diesel engine on LifeTrac with an open source, modern steam engine. Another example is milling one's own circuit boards instead of buying the circuit boards.

The significance of this concept is the elimination of the 'consumer' and replacement with a producer. While few people today are producers, technological recursion allows more people to become producers. This is consistent with principles of post-scarcity, the Star Trek 'Replicator', and notions of unlimited production at everybody's fingertips. It is the limit of open source software (ready access) applied to hardware.

From an email by Nathan Cravens of Effortless Economy

A recently adopted word, "recursion," has been useful in considering what is needed to create "a thing." Recursion is something touched on when describing casting the metal for LifeTrac. Some may want to purchase the product of the cast and save construction time. Others, knowing it is well worth the time toward the effort itself, will go "one recursion down" to reduce the financial cost of construction. The further up the constructive recursion, the greater the financial cost; the lower down in the constructive recursion, lesser financial cost follows.

As a general example, 4 hours to produce a design will mean not laboring for 60 days / 8 hours a day to purchase the same part for construction. The identification and presentation of contrast along these lines will, I am at liberty to suspect, fuel this work into a widespread revolutionary movement. This example would also further dampen Luddite critique which argues "technology as toil." Contrasting design construction time with labor market time at minimum wage in addition to stressing the usefulness of the design in diminishing toil will assure the 'technological transfer acceleration' of the OSE format.

Summary

The section below shows rather than paying $3000 for at cost production of the CEB press ($2k in materials, $1k in labor) - already a substantial factor of 10 lower than the competition - we intend to produce it at $1400, half of the previous cost - for factor 20 cost reduction over the industrial counterpart. This cost includes the labor of machine production. If typical industrial product is 4-6 times above cost, we are saying that we can produce items at 8-16 less cost than the mainstream industrial production. This is a hint at abundance economies, though it requires physical proof for validation - by building the item in question from scrap steel in a flexible, community-supported fabrication facility.

Productive Recursion Formula at $25/hour Labor Rate

Based on production rates in a foundry - $1000 per day of value generated (see Factor e Live Distillations Part 6) - and labor of $25 per hour for that time - or $200 - and one sees a 5:1 ratio of value generated to labor used.

Thus, any given device - say $2k in material costs - can be recursed to $400 in labor, or cost/5. To that, one needs to add the value of raw feedstock - say $200 if the $2k device weighs 2000lb, and we assume that scrap steel is 10 cents per pound. On top of $2k, one typically has cost/2 in labor - as for example with the CEB press, we are expecting the machine to require 20-40 hrs in labor at $25/hour - or $500-$1k.

So the price formula evolves to:

C = C_s + C_L + C_F

where C is the total cost, C_s is the cost of scrap steel, C_L is the cost of labor, and C_F is the cost of foundry labor.

We've observed that C_s is typically C_d/10, where C_d is the cost of a virgin materials for a given device - such as $2k for the CEB press.

C_L is typically C_d/2, as observed empirically from the CEB press. C_F = $200, or one day's worth of labor at foundry duty, which can produce at most 2400 lbs of cast parts per day, and can produce the necessary steel for most objects in one day - assuming say 8 shots, with multiple castings per shot.

For most electromechanical devices of low complexity (Tractors, CEB presses, steam engines, etc), the cost structure is therefore:

C = C_d/10 + C_d/2 + 200 (dollars)

 = $200 + 3 C_d/5

Or more generally -

C = $200 n + 3/5 C_d

where n is the number of days to produce the steel castings.

For devices of 2000 lb or greater weight, the formula is essentially

C ~ 3/5 C_d

Let me put this another way: the open source recursion price of the product is lower than the cost of the very virgin materials if these are sourced from the mainstream industrial system!

For the CEB press, we come up with C = $200 + 3/5 * 2000 = $1400 for the recursion cost where we went down to metal casting of components.

This is the most basic formula that includes one recursion, but with several recursions (say not only structural metal, but also components like hydraulics, or components of components ) - the formula may get more complicated. However, we know that the upper limit of the 3/5*C_d term is C_d - the industrial cost.

On a side note, this theory is worthless, even if the simplest case - until we gain empirical evidence. For example, we should be able to show that we can produce the CEB press at $1400 if we start with scrap steel - which would be a testable experimental proposition.

Recursion Formula at $50/hour Labor Rate

Based on production rates in a foundry - $1000 per day of value generated (see Factor e Live Distillations Part 6) - and labor of $50 per hour for that time - or $400 - and one sees a 5:2 ratio of value generated to labor used.

Thus, any given device - say $2k in material costs - can be recursed to $800 in labor, or cost/2.5. To that, one needs to add the value of raw feedstock - say $200 if the $2k device weighs 2000lb, and we assume that scrap steel is 10 cents per pound. On top of $2k, one typically has cost in labor - as for example with the CEB press, we are expecting the machine to require 20-40 hrs in labor at $50/hour - or $1-2k.

So the price formula evolves to:

C = C_s + C_L + C_F

where C is the total cost, C_s is the cost of scrap steel, C_L is the cost of labor, and C_F is the cost of foundry labor.

We've observed that C_s is typically C_d/10, where C_d is the cost of a virgin materials for a given device - such as $2k for the CEB press.

C_L is typically equal to C_d, as observed empirically from the CEB press. C_F = $400, or one day's worth of labor at foundry duty, which can produce at most 2400 lbs of cast parts per day, and can produce the necessary steel for most objects in one day - assuming say 8 shots, with multiple castings per shot – or assuming continuous casting using an induction furnace.

For most electromechanical devices of low complexity (Tractors, CEB presses, steam engines, etc), the cost structure is therefore:

C = C_d/10 + C_d+ 400 (dollars)

= $400 + 1.1 C_d

Or more generally -

C = $400 n + 1.1 C_d

where n is the number of days to produce the steel castings.

Since 2400 lb can be cast/worked per day, we have 400<<2400, so

C ~ C_d=C_L

For the CEB press, we come up with C = 2000, or essentially the cost of labor.

This makes sense in the most general sense, in that the cost of something is the labor required to turn raw resources into human-usable form. We are stating here that in an open source economy, each individual will have the option to generate their own wealth while bypassing the paleoindustrial complex that was born from the so-called industrial revolution.

The point to note here is that in this formula, individuals are essentially capturing the full value of their own labor.

Social Dynamics

Who organizes the method of production above? The productive agent is someone like Factor e Farm - who organizes crowd support of a fabrication facility. The price above (8-16 cost reduction) applies to turnkey products, which may be sold as kits. DIY fabrication allows one to produce infrastructure from scrap.

Who is accountable for the production facility? There is no mystery there. The producer maintains the production facility - the crowd supporters reap the benefits of its existence. But the supporters are not required to maintain the production facility, so that accountability is placed in the correct hands.

Critique

The Gingery books show an example of constructing an entire metal workshop from scratch. This is a sad case, however, for replicability - as it takes many months to accomplish this feat, while ending up with relatively light-duty equipment.

This is NOT what we are after.

The open source Multimachine is a more replicable example. This project is technically sound from the heavy-duty perspective - but it also lacks a level of standardization that makes the project truly replicable. So does MechMate, the free router table plans - where specialized parts require a laser or plasma cutter to fabricate.

The question of recursion feasibility boils down to absolute simplification of design and optimization of casting technique to make it feasible. These are the two issues that need to be solved for the recursion formula to be proven.

In particular, what is the most effective and quick route to metal casting? Molten metal can be had, but it appears that the ability to make quick molds for casting is the limiting step. It is worth exploring whether casting can be as effective as suggested above.

Further Details

The discussion above does not even begin the possibilities of technological resursion down to the level of smelting minerals. A whole new frontier of ecotech has yet to emerge with materials science based on local resources, under the assumption of abundance of electric power.

Economic Advantage of In-House Ability to Melt Steel

We have provided calculations above that – for melting steel from scrap - the cost of labor required to generate the steel, compared to the value generated - is negligible. Therefore, ability to melt steel allows the owner-producer to capture the entire value of steel as the value of one's labor. This has the practical effect of replacing materials sourcing costs with the cost of scrap steel. Further, this provides an advantage to the customer, as it can be shown that the sales price is reduced by about 40% over the open source price of the machine by melting scrap steel compared to buying steel from outside suppliers. In absolute terms, the advantage goes from a factor of 10 cost reduction over industry standards to about 20 cost reduction over industry standards.