If Technology Is Supposed to Make Things Cheaper, Why are They Getting More Expensive Instead?
Technology is trying to bring abundance to us but we’re missing out. Why?
**I recently attended a talk with Jeff Booth. I was inspired to think more about his insights and write about it. So here it is — I hope you enjoy!**
Subscribe to The Misfit newsletter here:
Friends,
Rather than becoming more free and wealthy with technology, we’re working multiple jobs to pay the bills, enjoying less time with our families, taking on more debt, and growing anxious over our financial circumstances. Things should be getting cheaper. Life should be getting easier. But it’s not.
Instead, prices keep rising. We can’t afford the same things we used to. And it’s getting harder and harder to simply get by. Why is that?
If technology making things cheaper was the whole story, perhaps we'd see those prices coming down. But there's another force at play; the inflationary nature of our economy, and in particular, our monetary system.
Hang with me here as I explain each part of the equation.
In the Long-Term, Technology Helps Make Everything Faster, Cheaper, Easier
Overall, technology helps make things cheaper. In the long run, it even gives us many services for free. Take a look at your phone. It used to be for texting and calling. Now, it’s used for emails and photos, music and meetings, networking and banking. More and more of the apps and services we used to pay for are now free.
“Prices fall to the marginal cost of production [because of technology]…That is why a calculator app on your phone is free. It’s why your photos are free. That’s why everything is moving to free.” – Jeff Booth, author, entrepreneur, investor and bitcoiner
Over the last little while, we’ve seen the explosion of technology and what it can do for the prosperity of humanity.
We’ve plunged deeper into technology with innovations like ChatGPT, an artificial intelligence chatbot that appears to have all the answers at its fingertips while menacing to take away jobs (everything about this terrifies me); robots getting prepared to run brick-and-mortar shops without needing downtime, coffee breaks or bathroom breaks; and cars that promise to drive themselves without human intervention.
All of this, supposedly, to bring us cheaper goods, better standards of living, and more free time to spend our income. And yet, we’re stuck in a hamster wheel that never stops spinning – and that’s just to get by!
So what’s the missing link here?
Our Inflationary Money System is Making Everything More Expensive
In our credit-driven world, people are able to spend more money than they actually have. This artificially inflates the demand for goods and services, raising prices over time.
We also take on a lot of debt, which means our jobs and the economy are our lifeline. So we need a strong economy to keep us paying our debts.
As a consequence, central banks are under pressure to keep the economy stimulated. One way of doing this is to print more money (at an unprecedented rate if I may add), which is literally like inventing money out of thin air. Sounds wonderful, doesn’t it?
Well, supply and demand tell us that if there's more money supply in the system, our money will naturally lose value. The loaf of bread that used to cost you $4 now costs $5. So in dollar terms, prices are inflated.
This manipulation of money – and ensuing inflation – means that many of our day-to-day purchases are more expensive. It’s why we’re noticing groceries getting pricier.
“Technology should be driving everything cheaper, [but] rent, housing prices, fuel, food, and many other costs are rising… driven by an enormous rise in credit and debt… Debt combined with deflation is a toxic combination, because borrowers have to pay the same for their interest payments while earning less.” – Jeff Booth, author, entrepreneur, investor and bitcoiner
Let me put it another way.
Central bankers are printing more money, pushing prices up. This new money does not flow into the economy fairly. It flows into the economy from the top down. Those closest to the money printer benefit the most.
A side effect of this is that the wealthy see the impact first by having more money at existing prices (before these prices eventually rise with higher demand thanks to more money). And they get richer with their growing stocks.
Meanwhile poorer people – whose wealth exists in cash – see the value of their money decline. It’s also why we’re seeing poorer families cutting down one meal per day as they can’t afford higher food prices.
It’s not a fair system, yet few stop to question it.
The Problem with the Current Inflationary System
An inflationary system stimulates higher consumption, higher production and the loss of our time and quality of life because we’re trying to afford more consumption. Not only that, but it's our planet and environment that suffer from our constant need to consume more. Our monetary system is literally a catalyst for environmental destruction.
"You can't solve climate change from a system that needs to grow forever by manipulating money on a finite planet." – Jeff Booth, author, entrepreneur, investor and bitcoiner
So, those are the two forces competing against each other. In one way, the deflationary nature of technology is trying to make us more free, more productive, and more wealthy, while inflation is making us less free, and more tied to manipulated systems that can only make us poorer.
No wonder we’re all losing our minds.
What Does the Future Look Like – Deflationary or Inflationary?
I don’t know, but I know someone who seems to have a clear idea: Jeff Booth. He’s an author, entrepreneur, investor, bitcoiner, and the inspiration behind this piece.
Jeff Booth thinks we’re headed towards a future where technology will inevitably win and our existing inflationary system will collapse. Why? Because deflation and technological innovation is too powerful of a force to stop. It will grow faster than our ability to manipulate money and maintain the status quo. After all, there’s only so long governments and banks can prop up our banking system. Eventually, the house of cards will fall.
“Technology is deflationary, we are entering into an age of deflation unlike any the world has ever seen.” – Jeff Booth, author, entrepreneur, investor and bitcoiner
If – and when – all this happens, bitcoin will be positioned to do well given it is deflationary money. It would seem logical that when an inflationary system collapses, we would need new money to replace the old, inflationary money – and bitcoin seems like a natural choice.
“The reason that [bitcoin is] a deflationary currency is because there’s a fixed number of coins, but the demand for people to hold those coins has increased over the years, which means the price per coin has increased over time.
On the flip side, the value of the dollar has generally decreased over time against other assets, as it’s an inflationary currency.
Bitcoin is a deflationary currency while the dollar is an inflationary currency. Even if you’re not a huge fan of bitcoin, I think it’s important to recognize the current environment we live in and think about how you want to position yourself as an investor.” – Jeff Booth, author, entrepreneur, investor and bitcoiner
So, friends, how do you prepare for a future being carved by the furnace of technology?
Perhaps, it’s by advocating for a money system that is deflationary by nature. By earning and saving in a type of money that is technology-forward, open, untethered by location, innovative, accessible to all, and un-censorable. Like bitcoin. Perhaps the time has come for technology to revolutionize our outdated money system. Some feel so strongly that they have done everything they can to transition to a Bitcoin standard.
Perhaps a happy middle ground for you is hedging your bets and holding both bitcoin and fiat currencies (like the dollar). Whichever you choose to do, make sure to do your research and understand why you’re positioning yourself this way for the years to come. Think exponentially. Not linear.
Now I’ll leave you with this. Maybe as we continue to observe the pitfalls of our current monetary system, it's time to consider the alternatives. Maybe bitcoin isn’t so crazy after all. Maybe bitcoin is the answer. Maybe not. But either way we can be sure that the status quo is not it.
To infinity and beyond,
— Ayelen
Coming Up On The Misfit Podcast
Tomorrow I have the incredible honour of interviewing a brilliant friend: Amiti Uttarwar! She’s the first known woman Bitcoin Core contributor and an absolute guiding light.
What questions would you like to ask her? Let me know in the comments section below.
A Blast From the Past: The Misfit Podcast.
Nozomi Hayase is a philosopher, journalist, and prolific writer in the Bitcoin space. We talked about the liberating power of Bitcoin for our financial, mental, and spiritual well-being. And how Bitcoin is creating a new renaissance for humanity.
If you’re not listening to The Misfit podcast – this is your moment.
Listen now on Spotify or Fountain app or wherever you get your podcasts from.
As always, please give me feedback. Did you enjoy this piece? What do you want more or less from The Misfit newsletter? Let me know by replying to this email.
pretty mindblowing perspective, really makes me think!