GENIUS FORUMS

I started to think about the economic consequences of a rapid emergence of super cheap energy such as Solar, which will eventually replace fossil fuels, and will become much more powerful.

The biggest question raised if what percentage of the price of every good and service is determined by the price of energy, and what will happen to the price of goods and services when a super cheap energy suddenly emerges on the scene.

I would suspect that as electricity drops to pennies per kilowatt hour, the price of most goods and services will also drastically drop in response. The end result is a period of rapid deflation never seen before, but such a period of deflation would not be the result of recessionary forces. Moreover, people's quality of living wouldn't suffer from this type of deflation.

However, because the price of most goods and services will decrease, one might suspect that a companies profit margins might also become tighter, and this would force them to naturally lower people's wages.

Super cheap energy will also make it much easier to solve many of the big problems that are coming over the horizon. For instance: there is a shortage of fresh drinking water, but with super cheap energy, it now becomes economical to use the current available methods to convert salt water to fresh water. Super cheap energy will also reduce the cost of education, technological research and all the rest of it.

Moreover, I think such an emergence will have drastic effects on the economy in ways that we cannot yet foresee... much like the internet.

There is no way that the world will have super cheap energy in the next 50 odd years.

Even if it can be produced cheaply, which is not the case at present, business (via self-interest lies and bullshiting) and governments (via taxes) will ensure that it is not retailed cheaply.

Jamesh,

Corporations do not have that type of power, to hold back progress indefinitely. They can slow progress, or stop progress in some areas for a period of time, but never stop it completely. I predict super cheap solar in the next 10 years, with quite a bit of certainty.

Corporations couldn't hold back the internet caused by the exponential growth of transistors in the 60s, and they will not ultimately stop the next technological leap, which is exponential growth of solar technology...

Example: The oil companies have tried to hold back electric cars, but they are still scheduled to arrive in full force within the next couple years. GM is putting all its energy into the Chev Volt, so Public opinion and Science are more powerful than pockets of corporate greed and ignorance.

Technological progress is like a tsunami governed by global causal forces, whereas corporations are much more feeble and limited, always trying to play catch up, stay competitive, and adapt to whatever changes technological leaps thrust upon them.

In my opinion, we are evolving to a economy beyond capitalism, and beyond currency altogether, a sort of managed socialism, where the automation of production will eventually be controlled by government when companies are no longer motivated for profit, and goods and services will be rationed fairly among the citizens. People will contribute, but only because they are very intererested in what is going on.

Technology will eventually make it so easy and effortless to survive that to be motivated for profit won't make sense anymore. Survival security will become easy for all to obtain with very little effort.

You could be right but I doubt it - our animal human natures are entirely selfish.

jamesh,

yes, we are selfish, but that isn't always a bad thing. Our selfishness also causes most of us to avoid exerting redundant energy when we do not have to, and so if there is an easier way to do something, human beings naturally gravitate towards it.

The end result that the world will embrace cheap energy with open arms, while some pockets of resistence may keep it out of certain nations for a period, but eventually even governments and corporations will lose control, and be unable to prevent new technology leaps.

Look at what the internet has done to communist regimes who are attempting to control the flow of information in and out of their countries. It has eroded their power to do so, and yes, there are countries such as China and North Korea that still attempt to heavily control the types of information that flow, but the developed nations serve as an example of how the world should be, and many residents within those countries are becoming aware of the differences.

Ryan, you make some interesting points and your optimism about the future is refreshing. I often enjoy reading your takes on technology and trans-humanism. I've investigated solar power for my house, and even with a government subsidy, and with the possibility of making money back by selling to the grid if I install a large enough setup, it's too expensive for me to afford. On a large scale, though, and in coming years, you might be right that it's going to be far more significantly affordable.

A recent episode of the Scientific American podcast was about solar energy:

Nuts, Bolts, Photons and Electrons of Solar Energy
Jeff Wolfe, the CEO and co-founder of groSolar, talks about solar energy's present and future.

Link to the Sci Am page/episode.

guest of logic,

I've investigated solar power for my house, and even with a government subsidy, and with the possibility of making money back by selling to the grid if I install a large enough setup, it's too expensive for me to afford. On a large scale, though, and in coming years, you might be right that it's going to be far more significantly affordable.

I think so, remember what cell phones were like, the first cell phones were huge banana analog phones that only the wealthy could afford, and they worked like crap, as all new technology does. Thank god the rich people can buy the crappy new technology long enough for it to get cheap and decent!

The first cd burner I bought in the late 1990s was $650, and it was a 2x burner, and it would crash my computer if I didn't have my anti-virus shut down, and if I was running other programs. Now, you can get a 20x cd/dvd burner combo for $35.

The same is happening now with solar. Only the wealthy are buying it because its hip and a status symbol to be green, but solar currently is crap for the amount of kilowatt hours its capable of. However, in 10 years - different story. People don't understand how fast exponential growth is. its not 1,2, 3, 4, 5X degress of magnitude. its more like 1,2,4,8,16,32,64,128 and so on. And each progression in the cycle takes a much shorter time than the previous progression.

Jamesh wrote:You could be right but I doubt it - our animal human natures are entirely selfish.

Nikola Tesla had the way with Radiant Energy back in 1901 with his patent, old JP Morgan and Westinghouse had their own ideas tho. The fast buck always trumps common sense.

Two good articles about Tesla's "Radiant Energy"

Nikola's Tesla's Radiant Energy System
by Bruce A. Perreault
Tesla's free-energy concept was patented in 1901 as an "Apparatus for the Utilization of Radiant Energy." The patent refers to "the sun, as well as other sources of radiant energy, like cosmic rays," that the device works at night is explained in terms of the nighttime availibility of cosmic rays. Tesla also refers to the ground as "a vast reservoir of negative electricity." (see diagrams)
http://www.nuenergy.org/alt/tesla_energy.htm

Radiant Energy: Unraveling Tesla's Greatest Secret
Of all the great inventions and discoveries of Nikola Tesla, nothing stood out with greater potential
benefit to the whole of humanity than his discovery of Radiant Energy in 1889.
http://educate-yourself.org/fe/radiantenergystory.shtml

PS to Ryan, good subject!!

Yep, Tesla was a champ.

I enjoyed reading the first 2/3rds of this essay.

THE PROBLEM OF INCREASING HUMAN ENERGY
WITH SPECIAL REFERENCES TO THE HARNESSING OF THE SUN'S ENERGY.

http://www.tfcbooks.com/tesla/1900-06-00.htm

There can be no doubt that, of all the frictional resistances, the one that most retards human movement is ignorance. Not without reason said that man of wisdom, Buddha: "Ignorance is the greatest evil in the world." The friction which results from ignorance, and which is greatly increased owing to the numerous languages and nationalities, can be reduced only by the spread of knowledge and the unification of the heterogeneous elements of humanity. No effort could be better spent. But however ignorance may have retarded the onward movement of man in times past, it is certain that, nowadays, negative forces have become of greater importance. Among these there is one of far greater moment than any other. It is called organized warfare. When we consider the millions of individuals, often the ablest in mind and body, the flower of humanity, who are compelled to a life of inactivity and unproductiveness, the immense sums of money daily required for the maintenance of armies and war apparatus, representing ever so much of human energy, all the effort uselessly spent in the production of arms and implements of destruction, the loss of life and the fostering of a barbarous spirit, we are appalled at the inestimable loss to mankind which the existence of these deplorable conditions must involve. What can we do to combat best this great evil?

And a quote from one of his other papers - this comment is relevant to the discomforts one feels when discovering and dealing with deep truths.

Gentlemen, some of the ideas I have expressed may appear to many of you hardly realizable; nevertheless, they are the result of long-continued thought and work. You would judge them more justly if you would have devoted your life to them, as I have done. With ideas it is like with dizzy heights you climb: At first they cause you discomfort and you are anxious to get down, distrustful of your own powers; but soon the remoteness of the turmoil of life and the inspiring influence of the altitude calm your blood; your step gets firm and sure and you begin to look—for dizzier heights.

It seems one of the most difficult things to consider, that a beautiful mind like Tesla's, an undisputed technical genius could at the same time venture into lunacy not unlike the mind of a John Nash or a Wilhelm Reich. Like an Icarus flying to close to the sun. It seems more than likely that a hard-nosed business man like Morgan realized this just in time to pull the plug from further descent into madness. To spare everyone more embarrassment he might have remained mute on the matter apart from discouraging others to fund a vision too far being from realizable or even realistic.

If Tesla really had theoretical or practical proof his ideas were right he would have worked on getting new investors. Instead his mind started to show cracks not because of this misfortune but because the cracks already were there to start with?

Jamesh wrote:Yep, Tesla was a champ.

And a quote from one of his other papers - this comment is relevant to the discomforts one feels when discovering and dealing with deep truths.

Gentlemen, some of the ideas I have expressed may appear to many of you hardly realizable; nevertheless, they are the result of long-continued thought and work. You would judge them more justly if you would have devoted your life to them, as I have done. With ideas it is like with dizzy heights you climb: At first they cause you discomfort and you are anxious to get down, distrustful of your own powers; but soon the remoteness of the turmoil of life and the inspiring influence of the altitude calm your blood; your step gets firm and sure and you begin to look—for dizzier heights.

Yes sir. Thank you for this.

It seems one of the most difficult things to consider, that a beautiful mind like Tesla's, an undisputed technical genius could at the same time venture into lunacy not unlike the mind of a John Nash or a Wilhelm Reich. Like an Icarus flying to close to the sun. It seems more than likely that a hard-nosed business man like Morgan realized this just in time to pull the plug from further descent into madness. To spare everyone more embarrassment he might have remained mute on the matter apart from discouraging others to fund a vision too far being from realizable or even realistic.

Yes I imagine he was a schizophrenic - induced by the sort of autism related to his extraordinary ability to picture images. This ability is not that uncommon, some here have it to a degree. I don't.

A long time ago, when I was a boy, I was afflicted with a singular trouble, which seems to have been due to an extraordinary excitability of the retina. It was the appearance of images which, by their persistence, marred the vision of real objects and interfered with thought. When a word was said to me, the image of the object which it designated would appear vividly before my eyes, and many times it was impossible for me to tell whether the object I saw was real or not. This caused me great discomfort and anxiety, and I tried hard to free myself of the spell. But for a long time I tried in vain, and it was not, as I clearly recollect, until I was about twelve years old that I succeeded for the first time, by an effort of the will, in banishing an image which presented itself. My happiness will never be as complete as it was then, but, unfortunately (as I thought at that time), the old trouble returned, and with it my anxiety. Here it was that the observations to which I refer began. I noted, namely, that whenever the image of an object appeared before my eyes I had seen something that reminded me of it. In the first instances I thought this to be purely accidental, but soon I convinced myself that it was not so. A visual impression, consciously or unconsciously received, invariably preceded the appearance of the image. Gradually the desire arose in me to find out, every time, what caused the images to appear, and the satisfaction of this desire soon became a necessity. The next observation I made was that, just as these images followed as a result of something I had seen, so also the thoughts which I conceived were suggested in like manner. Again, I experienced the same desire to locate the image which caused the thought, and this search for the original visual impression soon grew to be a second nature. My mind became automatic, as it were, and in the course of years of continued, almost unconscious performance, I acquired the ability of locating every time and, as a rule, instantly the visual impression which started the thought.

Ryan Rudolph wrote:I would suspect that as electricity drops to pennies per kilowatt hour,

It already does cost pennies per kWh.

The average cost of residential electricity was 12¢/kWh (DOE) in the U.S. in April 2009. The average household used 936 kWh/mo. in 2007 (DOE) and would pay about $108 for it based on the April 2009 average rate. DOE also has historical rates.

source: http://michaelbluejay.com/electricity/cost.html

I suspect that, if energy got vastly cheaper, uses would expand to absorb it (replacing other resources), just as a desktop computer today uses vastly more memory and processing power than one from fifteen or twenty years ago (because it is cheap to do so).

Dhodges,

I suspect that, if energy got vastly cheaper, uses would expand to absorb it (replacing other resources), just as a desktop computer today uses vastly more memory and processing power than one from fifteen or twenty years ago (because it is cheap to do so).

I don't follow your logic here. As computers evolved, they utilize less energy, and they are able to do millions more tasks simultaneously. The first computer was a simple calculator that took an entire room to fill, and I suspect that it used hundreds or even thousands times the electricity that a contemporary desktop computer uses now. I would suspect that if every home tried to run one of the first calculator computers from the 60s, their power bill would run into the thousands of dollars every month.

Moreover, as technology evolves, it becomes cheaper, more efficient, and much more powerful. How powerful the technology becomes has no limit, and it will eventually destroy the principles of capitalism as we know it. Capitalism has been necessary because survival has been so crude and difficult, but we are headed on a trajectory where all that is going to change, and change rapidly. Exponential growth of one thing that causes exponential growth of another is very rapid.

The destiny of solar is within the next 10-15 years, you will be able to spend hundreds of dollars to buy enough panels to meet all your energy needs, while this development will cause nanotechnology to eventually move into a realm where matter can be created from any other matter. This will totally destroy the value of what we believe any good is worth because now you can have a machine in your home that creates any good you want as long as you have some type of disposable matter, and the engineering software to tell the nanomachine what to do.

garbage in, gold out... is where I think we are heading.

you will be able to empty your garage into a machine, and get a dozen apples on the other end. And when this takes place, our economic system as we know we no longer makes sense. When security becomes so easy for us to attain, our only next move will be to look to the stars and expand and conquer.

"As the technological/transhumanist transition begins to occur, some will marvel and embrace, others will be dragged along blindly, while others still will tremble and take up arms to protect the old safe traditions of a better time that never existed"

Ryan Rudolph wrote: As computers evolved, they utilize less energy, and they are able to do millions more tasks simultaneously.

What Dave meant I suppose is that the computers when seen as boxes do not utilize less energy, often actually more than comparable computers (eg Pentium IV 300W vs IBM PC5151 63W from 1981).

The computational power increases but is quickly filled to the brim with all kinds of application, with varying level of actual usage (meaning: contributing anything instead of just dissipating heat).

Actually if you'd add all the extra PC's in a household, additional hardware and internet services, and the human time and effort wasted to keep the thing running, I'm tempted to put the power usage of a modern PC at a five or tenfold of the models 25 years ago. Still the case could be made that the increase in possibilities and efficiency are a hundred fold or a thousand fold. Of course vast increases in waste production as well, including wasting time and health on the thing.

Will electricity prices drop in the future? Even when cheaper sources become available, one has to calculate in the price of environmental management, to repair damages done in the past when energy production was more "raw" and short-term. The environmental tax alone might prevent prices to fall for the coming decades.

Diebert van Rhijn wrote:The computational power increases but is quickly filled to the brim with all kinds of application, with varying level of actual usage (meaning: contributing anything instead of just dissipating heat).

That was the point, the extra computational power is used because it is there and is very cheap (compared to other resources, such as the time it would take to write very efficient code).

If energy was very cheap, then a lot more of it would be used, replacing other inputs (which would be relatively more expensive) where possible. There would be no reason to use energy efficiently.

Diebert,

Will electricity prices drop in the future? Even when cheaper sources become available, one has to calculate in the price of environmental management, to repair damages done in the past when energy production was more "raw" and short-term. The environmental tax alone might prevent prices to fall for the coming decades.

Yes, but if energy is very cheap, the costs of fixing the past problems will be much cheaper as well, so the taxes will be cheaper. My point is that cheap energy affects the value of everything, and with other developments, we could reach a point where the pillars of capitalism no longer have a stable foundation to stand on. And then we will need to modify the system will have now to meet the new economic rules that technological progress creates.

Another important point to make is that we are in a period of wage inflation because people with no meaning in their lives derive pleasure from attempting to charge as much as possible for their services per hour, this greed creates a sort of wage war to the top, where the quality of everyone's living suffers because everyone is overcharging for their labour. We have that problem here in Canada where companies will charge the government triple or more times the price because they justify it by saying, oh well, the government can afford it, but the bill is being paid by taxpayers so companies are shooting themselves in the foot because they are tax payers. And then they complain about why the government is ripping them off with high taxes. Well, if contractors are all overcharging the government, they need to raise taxes to make budget.

And on the individual level, this is happening as well. People charging themselves out as $50/hr to other private citizens. Why do you need to make this much money? because any other service that requires a little bit of skill is also overcharging their labour rates as well. And people want to make as much as they can, and they never question what affect this has on the overall economy. It is like the arms race, the more arms ones accumulates, the less secure everyone is. And so the higher the hourly rate people charge out for services, the harder life becomes, and the more credit is needed to survive.

Lately, I've been shopping for services on Kijiji, where laborers work for far less than the large corporations advertised in the yellow pages. A electrical job that could have cost me $300, cost me $60 because I looked around for laborers who were pricing their services more fairly relative to wage inflation norm.

Dhodges,

If energy was very cheap, then a lot more of it would be used, replacing other inputs (which would be relatively more expensive) where possible. There would be no reason to use energy efficiently.

Are you suggesting that people will use more energy if it becomes cheaper simply because they can?

It seems to me that there are types of technology that are more efficient, and if people choose to use them, then their consumption levels go down because each person has a limit on what they naturally consume. I bet if you conducted a survey, you will find a normal distribution curve with an average on consumption for most people, but if everyone converted to more efficient products, obviously the average for that normal distribution curve should decrease. That seems like an reasonable goal to me.

Ryan Rudolph wrote:Are you suggesting that people will use more energy if it becomes cheaper simply because they can?

Yes, exactly.

It seems to me that there are types of technology that are more efficient, and if people choose to use them, then their consumption levels go down because each person has a limit on what they naturally consume. I bet if you conducted a survey, you will find a normal distribution curve with an average on consumption for most people, but if everyone converted to more efficient products, obviously the average for that normal distribution curve should decrease. That seems like an reasonable goal to me.

When energy is extremely cheap, there is no incentive to be efficient.

Ryan Rudolph wrote:My point is that cheap energy affects the value of everything...

and

.... everyone is overcharging for their labour.

Labor itself affects the value of everything and how labor gets exchanged, including the whole context that makes or breaks the well being or motivation for the average "work".

Think about this: even when the price of pure energy would drop to near zero because of some super-duper solar power generation with 99% efficiency, the costs are still there in the transport and storage. Fuel cells still have to be built, batteries, new types of power grids, management and so on. This relies on metals, plastics, chemicals and all the involved production processes. The whole infrastructure needs a lot of labor to function, no matter how many machines are built since even intelligent machines need management, upgrades, supervisions and so on.

Even the supposed scientific progress as the result of the near free electricity provides might not change this fundamentally.

Energy generation will become cheaper but what if securing and manipulating this energy will get more expensive? The complex dynamics involving effects on our climate of the oil age might still carry a price tag that free energy generation might not solve.

People still need to put effort in activities, in improvements and change and there will still a market for this which sets the prices. It's like free software: it didn't make computing cheaper since one needs still expertise and when the software gets more self-configuring only more software gets bundled and connected, creating the need for management, security awareness, helpdesk, government regulation and oversight, etc.

In my view the wages are not too high but probably too low (even inflation corrected) considering the increasing dependency on for starters the bureaucratic universe and the complexity of what makes humans feel 'happy' these days and what they believe their 'rights' are. All of this I think is reflected in wages. The money itself doesn't mean much, it reflects the over-complexity of our modes of production! And consumption.

Dhodges,

When energy is extremely cheap, there is no incentive to be efficient.

maybe, but by that time, it won't matter anyway because energy should be both cheap and green to the environment so consumption levels will not by as relevant.

Yes, exactly.

this may happen in some cases, but in my opinion, the novelty of "free consumption" will eventually wear off, and people will revert to more of a necessity based consumption pattern. Basically, It may spike in the beginning when free energy seems new and exciting, but it will eventually level off and return to a more normal distribution.

Diebert,

Think about this: even when the price of pure energy would drop to near zero because of some super-duper solar power generation with 99% efficiency, the costs are still there in the transport and storage. Fuel cells still have to be built, batteries, new types of power grids, management and so on. This relies on metals, plastics, chemicals and all the involved production processes. The whole infrastructure needs a lot of labor to function, no matter how many machines are built since even intelligent machines need management, upgrades, supervisions and so on.

yes, but we are also moving into a world of less labour and increasing amounts of automation by intelligent systems. Production factories employ less labourers than ever, and this will only continue to decrease into the future. We are moving into an increasingly labourless world, an automated world, where the value of everything will drastically deflate.

In my view the wages are not too high but probably too low (even inflation corrected) considering the increasing dependency on for starters the bureaucratic universe and the complexity of what makes humans feel 'happy' these days and what they believe their 'rights' are. All of this I think is reflected in wages. The money itself doesn't mean much, it reflects the over-complexity of our modes of production! And consumption

.

Yes, reality is complicated, but some people's consumption patterns are also excessive, which creates the necessity for all to charge more for their services. Some tradespeople in my city want $150 per hour for their service, while others charge $30 per hour for the same service, and they are able to survive as well. What does that tell you? something is amiss.

Ryan Rudolph wrote:...we are also moving into a world of less labour and increasing amounts of automation by intelligent systems. Production factories employ less labourers than ever, and this will only continue to decrease into the future. We are moving into an increasingly labourless world, an automated world, where the value of everything will drastically deflate.

The question remains what exactly labour is, how many forms and shapes it could take in an evolving society. It's actually a rather deep question and I'd challenge you to define it better.

There's the common definition of any " physical or mental exertion" or the Marxist idea of labor power:

Marx wrote:"By labour-power or capacity for labour is to be understood the aggregate of those mental and physical capabilities existing in a human being, which he exercises whenever he produces a use-value of any description.

Both approaches need a broader, more abstract take, I believe. Clearly when producing value we only want certain labour: an optimal, specialized application. Here the differences between physical or mental exertion already start to blur: it's the direction or the intent, perhaps the "organizing power" which makes a certain valued result come into being, not to be measured just in Watts or Joules, or drops of sweat.

Now again back to your "increasing amount of automation by intelligent systems". This clearly is an act of supreme efficiency and organization: the programming and design of systems which wouldn't require much oversight and repair (this is a condition here because anything less would lead to new industries and human labor and as such value and price).

So the value of this automation is represented by the "aggregate of all mental and physical action" that would lead to realization of it as well as its continuation within certain parameters. This will determine the real cost of these intelligent systems and seen from this perspective it might be hard to get rid of human labour and as such high value when it comes to technology.

Still, there's a possibility that the concept of labour is not limited to humans but could translate quite well to autonomous machinery. And when we do that, with it could come the concept of a price to pay, to the machinery? Since with labour comes the ability to organize, optimize and redirect, a self-organizing goal oriented behavior which might include negotiations. Go figure.

Some tradespeople in my city want $150 per hour for their service, while others charge $30 per hour for the same service, and they are able to survive as well. What does that tell you? something is amiss.

Some people do not pay for the product but for other factors, like the convenience not to think about it too much :)

Diebert,

The question remains what exactly labour is, how many forms and shapes it could take in an evolving society. It's actually a rather deep question and I'd challenge you to define it better.

I define labor as physical and mental effort by humans, but intelligent systems and machines are agents of humans, which would be owned by corporations and government. And if they are free conscious agents, then this raises different questions which will be explored later.

This clearly is an act of supreme efficiency and organization: the programming and design of systems which wouldn't require much oversight and repair (this is a condition here because anything less would lead to new industries and human labor and as such value and price).

the question remains: Does the evolution of automated services and products always leads to new industries for humans indefinitely, or is there a plateau point where the number of things to do for humans decreases? And if so, what are the ramifications for society, what would such a society start to look like?

So the value of this automation is represented by the "aggregate of all mental and physical action" that would lead to realization of it as well as its continuation within certain parameters. This will determine the real cost of these intelligent systems and seen from this perspective it might be hard to get rid of human labour and as such high value when it comes to technology.

so you're saying that technicians will always be needed to fix the automated systems right? ok, but will the amount of needed technicians meet the demand of the labourers lost due to jobs replaced by automation? and what are the ramifications of that for the long-term?

Still, there's a possibility that the concept of labour is not limited to humans but could translate quite well to autonomous machinery. And when we do that, with it could come the concept of a price to pay, to the machinery? Since with labour comes the ability to organize, optimize and redirect, a self-organizing goal oriented behavior which might include negotiations

yes, but why do we require payment for in the first place? to survive, to buy the things we need right? Now, will autonomous machinery require money to survive in the same sense as human beings do even if they are intelligent machine with some form of conscious experience? I question whether they would value things in the same manner as us at all.

Ryan Rudolph wrote:...why do we require payment for in the first place? to survive, to buy the things we need right? Now, will autonomous machinery require money to survive in the same sense as human beings do even if they are intelligent machine with some form of conscious experience? I question whether they would value things in the same manner as us at all.

The only type of autonomous machinery I can imagine would define for itself what it needs. If it needs still people to define it, they wouldn't be autonomous. If they were not able to define its own needs, free to tweak it where and when deemed necessary, they couldn't' be autonomous in my opinion, like adapting to changes, creating solutions, etc.

So they might not value "money" or things in the same manner as us at all. But chances are some interaction might evolve with the remaining free roaming humans and a whole new form of exchange might occur, creating value again with people laboring over attaining it. Or just people working for their own survival in the face of their new overlords :)

Diebert,

you seem to have given the AI subject some thought, so here's a question: what science do you think is more key or essential to breakthroughs in A.I? Computer science, biology, neuroscience/psychology? nanotechnology? Other?