Everything you 'need' at your finger tips...

...at a low cost, of course.  Dr. Don Boudreaux has this stimulating post at Cafe Hayek, and is re-posted here:

A Source of Wealth or Stagnation?

Here’s a familiar but fun scenario to ponder:

Suppose a replicator, similar to the one in Star Trek, is invented.  And what an invention it is!  Each replicator can itself be produced for only pennies.  Its inventor – either out of carelessness or magnanimity – doesn’t patent it.  Competition among replicator producers soon drives the price of replicators down to $7.99 each.

Each replicator allows its owner to produce a wide assortment not only of foods and drinks at near-zero cost, but also flowers, clothing, detergents and other cleaning materials, paints and inks, personal-hygiene products such as soap and toothpaste, contact lenses and eyeglasses, and even antibiotics and other medicines.  Within a couple of years, nearly every household in America has its own replicator.

One plausible consequence of this invention – and the material wealth it makes possible – is that Americans’ demand for leisure rises significantly.

What happens to GDP?  Would the replicator’s failure to ‘create’ lots of jobs cause it to be thought an innovation not quite on par with, say, the assembly line or the automobile?

Should we lament the invention and near-universal use of the replicator?

And my answer (in comments)

Almost instantly every American would be richer, the poor much more so. Now incomes that made it hard to make ends meet, now go much further, and they even have access to other goods they maybe did without before, like vitamins or other things that wasn’t a priority before. And they’re not only made richer in dollar terms, but also time. The time it takes to go to the store and buy items, and prepare food and drink items will also dramatically fall.

There no doubt would be impact to a wide variety of industries, the need for agriculture and most industrial goods would be eliminated (I’m assuming large industrial goods will still be needed to purchase, such as cars and the appliances that remain useful). However the people in these industries are not excluded from the benefits of the replicator, so the income they can make or the savings they have will go further. However, and at least initially there will be resistance to this new technology – almost assuredly there will be “experts” and “scientists” that will come up with studies that show that this device is harmful. However, assuming that the replicator produces items at the same quality and substance (meaning, there is NO difference between a replicated item and the original item), then over time these will subside.

One would hope that the change to the market place will be so rapid that these industries will be unable to justify a Farm or Industry subsidy. One can hope…

Investment in these areas will leave these sectors, but it will show back up in the leisure and services sector – at a higher, lower or the same amount won’t be seen until after the fact. The increase in leisure is given in the question, but there will also be an increase in services, because the replicator does have one input – the imagination and knowledge of the user. Some have better imaginations and more knowledge than others, and therefore there will be a market for “Replicator Consultant Services” that people will look to make exchanges for (either by money or barter), creating a new field.

The enormous increase in the demand for leisure will take many forms, some new will emerge that are unknown now, but what we do know is the resources used to create these Agricultural and Industrial goods before will be ‘repurposed’ by the market to meet the new demand needs, given the increase in price for these items. Fields of crops will be turned into golf courses, nature preserves, and amusement parks to meet this demand.

Again, one would hope that this tremendous increase in the wealth of all Americans would decrease the need for Government expenditure for entitlements and welfare, reducing the role of government everyone’s lives. However, there will probably be an attempt to justify their role by claiming that “these replicators need to be monitored because Americans are replicating to many pizzas and not enough broccoli,” and so on. So, one can hope…

What is certain is that the coming years will be a period of radical transition. All measures of GDP will have to be adjusted, and until everything has had a chance to emerge, it will be difficult to know how that will be measured. First, the consumption of the items that were produced are still being produced and consumed, they are just produced at a much much much lower cost than before, so the consumption portion of GDP should be at least the same, and very probably, Consumption should increase considering the increase in leisure and services. So (C) will be higher. Investment (I) very probably will be near the same or higher, but probably not as much as (C) because most of that is reallocation. And (G) could be lower, but it’s difficult to tell. My hope would be that it would shrink to the point that is not as significant a proportion as before.

So, the short answer is no, we should not lament an invention of this “replicator”, surely it makes everyone’s lives better.