Production methods used to lower cost of products when simplified for rapid personal/localized fabrication. These rely on open source technology for producing materials instead of buying them, by investing in additional productive capacity to capture a larger part of the value chain. The limit is autonomous production at the cost of solar energy (assuming Regenerative Economics.
- 1 Introduction
- 2 2015 and Before: From an email by Nathan Cravens of Effortless Economy
- 3 Summary
- 4 Productive Recursion Formula at $25/hour Labor Rate for Melting and $50/hour for Fabrication
- 5 Social Dynamics
- 6 Critique
- 7 Further Details
- 8 Economic Advantage of In-House Ability to Melt Steel
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. For example: a city that produces bolts and transistors using screw machines and clean rooms, which are standard parts of globally-distributed, Open Source Microfactories - instead of buying bolts and semiconductors from global supply chains. The advantage is drastic cost reduction when the technology is produced locally using open source, collaborative methods.
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 engine. Another example is milling one's own circuit boards instead of buying the circuit boards. Or producing bioplastic filament with the open source Bioplastic Extruder from trees instead of buying ready-made 3D printing filament.
The significance of this concept is the elimination of the 'consumer' and replacement with a 'producer' - or at least 'prosumer'. 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.
At the limit, we move down into trustability of integrated circuits to determine whether we 'know' what's inside. While this is possible in software with git and hashes, there is more room for tampering in hardware. See seminal article by Bunnie Huang - . The article provides a useful discussion of transparency in open hardware, noting the difficulty of transparency in hardware.
OSE's work on Technological Recursion, concept and practice of Toolchain Degeneracy, and building things in the Open Source Microfactory - all provide to increasing trust to minimize third party interference with the integrity of physical production.
This is something that we can potentially collaborate on with Bunnie Huangs' side as OSE moves into open source silicon in ~2028.
2015 and Before: 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.
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 for Melting and $50/hour for Fabrication
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. (assumptions - 300 lb melt/hour * 8 hours - 2400 lb virgin steel at 50 cents/lb in 2009) Thus, any given device - say $2k in material costs - can be recursed to $400 in labor (NB 2022 - assumes only 4 hours of work/day in melting), 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 (off-the-shelf) materials for a given device - such as $2k for the CEB press.
C_L is typically C_d, 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. The major assumption to prove here is that melting and rolling can be done by that single person - on the same day.
For most electromechanical devices of low complexity (Tractors, CEB presses, steam engines, etc), the cost structure is therefore:
C = C_d/10 + d/2 + 200 (dollars)
= $200 + 3 C_d/5
Or more generally -
C ~ $200 n + 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 ~ C_d
Let me put this another way: the open source recursion price of the product (including labor) is approximately equal to the cost of the very virgin materials if these are sourced from the mainstream industrial system!
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.
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 the same price as that of off-shelf materials - when labor is included at a competitive rate of $50/hour.
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 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.
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 question of recursion feasibility boils down to absolute simplification of design and optimization of build 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.
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 (not free, but not union, just economics of autonomous economies) 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% compared to the off-shelf materials 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.
Implications are significant. Replacing value with one's own labor is transformative - if one has effective tools, which themselves are open source and thus low cost/lifetime design (LCLD). This means that one is not producing $1k/day, but more, if there is a guaranteed market. Such a guaranteed market would exist in a Network State which has Digito-Physical Backing for its currency.