Because of technological advances, we now have an abundance of resources, but this also means we have a deflationary surplus. It’s just that we don’t live in a world where prices are expected to fall.
Jeff Booth, a tech entrepreneur, investigates the challenge of adjusting to a world where deflation due to technological advancements must be factored into a financial system accustomed to inflation in his book, The Price of Tomorrow (2020).
He believes that if we learn to accept the benefits of abundance, which could include a society in which people do not need to work, we can avoid an impending economic crisis.
At the end of this book review, I’ll also tell you the best way to get rich by reading and writing.
Without further ado, let’s get started.
Lesson 1: Ponzi schemes are an investment fraud.
Ponzi schemes are all about investment fraud. Ponzi schemes appear to make money by repaying early investors with contributions from later investors. The system will eventually fail because there will not be enough new investors to cover the payouts to the old ones.
How is our economy different from a Ponzi scheme if it requires perpetually rising inflation and credit growth? Easy credit is today’s society’s sole source of economic growth, and it is being generated at an astounding rate. The global economy will implode if debt levels continue to rise.
QE is the term used to describe the central bank’s practice of printing and injecting large amounts of new currency into a country’s economy. Unintentional currency depreciation is unavoidable. When the government prints more money, it does not create more assets; rather, it simply represents its assets with more currency units, lowering the value of each currency unit in the process.
Monetary easing has been tried on a global scale as an experiment without fully considering the potential outcomes. The experiment was a success for the wealthy. Much of their wealth and privilege are not the result of their own intelligence or effort, but rather of the deliberate action of governments around the world in issuing currency.
At the same time, those who have not been saving and investing for the future find themselves on a treadmill that is speeding up and they are unable to keep up.
Inequality caused by QE isn’t the only source of the resentment, discontent, and populism that paved the way for Trump and Brexit. Furthermore, the economy suffers gradual damage until it eventually collapses. Bailouts of billionaires and major corporations by the Federal Reserve do not prevent crises; they only delay and exacerbate the next one.
Lesson 2: Documented biases in the mind number around 150.
There are approximately 150 different types of cognitive biases. The big four are anchoring, sunk-cost bias, confirmation bias, and the proverbial “blind spot.”
The anchoring effect causes us to give too much weight to the first piece of evidence we encounter when making decisions. The term “sunk-cost bias” refers to the tendency to continue engaging in an inefficient activity because of previous emotional or time commitments. Confirmation bias occurs when we seek evidence to support our existing beliefs. Bias blind spot occurs when we recognize bias in the decisions of others but are unable to recognize it in our own behavior.
Experts, like the rest of us, are prone to cognitive biases and tend to think in predetermined ways. This occurred during the 2008 financial crisis. As a trend continues, experts gain confidence in their ability to explain and defend their conclusions, making it more difficult for them to notice details that someone with a more objective perspective would notice right away.
As a result, when dealing with significant societal changes, we should not rely on those who have been around the block for a long time, but rather on those with new perspectives. If our societies are to thrive in today’s highly technological world, we will need all the data-driven insight we can get.
Lesson 3: Our lives have been profoundly improved by advances in technology.
We can now make the most of our time on Earth thanks to technological advancement. The majority of jobs today are supported by the waste and inefficiency that technological progress will eventually eliminate. Because of technological advancements, it is now possible to have fewer people working fewer hours for less pay. Furthermore, this situation jeopardizes the growth and inflation that underpin our economy.
Recent technological advances, such as 3D printing, virtual reality, and self-driving cars, are now widely available and will have far-reaching economic implications.
In 2017, traffic-related deaths, injuries, and property damage cost $413.8 billion. Because human error causes 94% of accidents, autonomous driving will drastically reduce these factors, but it will also result in the loss of a large number of jobs in the transportation industry.
Similarly, technological advancements are lowering the production and distribution costs of renewable energy, which has numerous environmental benefits. In fact, the day when solar power is widely available and affordable is not far off. Solar energy is already cheaper than nearly every other form of energy, and the cost will continue to fall as technology improves and widespread adoption grows.
Traditional energy, on the other hand, remains an important part of our economy, accounting for about 9% of global GDP. The traditional energy sector alone employs approximately 5.6 million people in the United States. All of these professions are threatened by the proliferation of renewable energy sources.
Lesson 4: As technological advancements have increased access to information and knowledge, artificial intelligence is the logical next step.
Artificial intelligence is simply the next logical step in a long line of technological advancements in terms of increasing people’s access to information and knowledge. It’s unprecedented, and its significance will grow with each passing year. Robots may overtake us as the dominant species on the intellectual ladder sooner than we think. This may sound fantastic, but we are struggling to keep up with the exponential growth of data and AI.
Can we be certain that any job is safe now that computers are outperforming us in so many different areas? While AI will eliminate thousands of jobs, it will also create thousands more that we haven’t even considered. However, preparation is essential.
If AI creates more jobs in the future than it destroys now, a large number of people will need to be retrained into new occupations. We can also expect social upheaval comparable to that experienced during the commercialization of electricity.
Lesson 5: Inequality breeds extremes when abundance is attainable by some but not by others.
To put it bluntly, extreme inequality is unavoidable in a world where some people have abundant resources while others do not.
Extremism is on the rise as the gap between rich and poor grows wider. This extreme viewpoint has resulted in the rise of leaders who promote simplistic and inflammatory us-versus-them narratives. Such leaders have had and will continue to have negative effects on society.
Instead of arguing about our differences, we should work together to establish a set of larger goals that we must all achieve for the sake of humanity, and then use those goals as motivation to make the world a better place and build better systems.
Communities may be able to mitigate the negative consequences of non-cooperation if they combine the majority’s will with effective incentive systems. Our society as a whole cannot function with a system that benefits only a subset of its members. However, the fact remains that we are all members of the same human race.
Lesson 6: With the spread of technology, deflation occurs at an expected rate.
Why not embrace deflation instead of fighting it? This is an illustration of what that could look like.
Deflation is expected to follow the spread of technology. Deflation is cause for celebration because it allows us to buy more with the same amount of money. Affluence is ours to have, and we choose to accept it. We let things go unchecked when technological advances cause prices to fall to zero.
The general public will no longer be forced to absorb rising consumer goods and services prices. We may be left with no other viable options, so despite its radical departure from the status quo, it’s worth considering this scenario.
We as a culture have no idea how to function without work, so this idea is easy to dismiss as absurd. Our jobs are more important to us than the money they bring in. Our jobs shape who we are, and our networks and social standing are frequently the outcomes of our jobs.
Because we are afraid of the unknown, it is difficult to imagine a future in which we do not have access to jobs and the sense of worth that they provide. However, accepting prosperity without labor may usher in a new era of enlightenment in which we learn to fully appreciate the benefits of technology.
How To Get Rich By Reading and Writing?
You must be an avid reader who is hungry for knowledge if you are reading this book review. Have you thought about making money using your reading and writing skills?
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