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Deflationary Tendencies and Technology

AI Energy deflation

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5 replies to this topic

#1
BsafeBparanoid

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As a trained economist I understand the deflationary tendencies of revolutionary technology. In the near future we will likely face a combination of two economically earthshaking technologies. The first will be abundant and cheap energy, through solar, fusion, and other emerging technologies. The second will be the advent of Generalized Artificial Intelligence. Both of these technologies will undoubtedly create a recipe of strong deflationary tendencies within the economy of the world.

 

As far as my noetic faculties can reach, this will lead to something fiat economies are most endangered by. Namely, deflation. Mind you, even a small percentage of deflation will cause the super-rich to lose their minds.

 

Keynesian economics will most likely be on steroids due to this, and will be ineffective no matter how much money gets injected into the economy.

 

Is there anyway to prepare for this eventuality?



#2
Erowind

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Why would abundant energy and greater efficiency induced by AI cause deflation? Wouldn't both these technologies increase room for economic growth?

#3
R8Z

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Why would abundant energy and greater efficiency induced by AI cause deflation? Wouldn't both these technologies increase room for economic growth?

Going against mainstream economics (aka keynesian), according to the Austrian school of economics, deflation is expected from a wealthy and prosperous society and beneficial to the individual.

The logic is actually very simple: production increases due to technology advances plus more competitors come into play. This leads to a price decrease of products. This can also be seen as an increase in value for money, that is, deflation. It, of course, benefits individuals that can now consume the same amount of products with less units of money.

That leads to the conclusion that the constant printing of money to try to fight deflation (and create inflation) is not only based on faulty reason, but also going against the expected outcome of a good, and prosperous industrious society.

By the way, do we already have a topic discussing this sort of economic consequences of applied Keynesian theory? I honestly can't wait for "the bomb" that the FED has been creating to explode and see its consequences. Hopefully cryptocurrencies will come into play to save the day, one day or another.



#4
Yuli Ban

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The logic is actually very simple: production increases due to technology advances plus more competitors come into play. This leads to a price decrease of products. This can also be seen as an increase in value for money, that is, deflation. It, of course, benefits individuals that can now consume the same amount of products with less units of money.

Indeed, we see this in a place that's very near and dear to futurists: information technology. The price of computers today is literally otherworldly cheap compared to what it was even thirty years ago, and all this for vastly more capabilities and not taking into account wider inflation.

This due to mass production and increases in efficiency of said production of the various components of computers, from the plastic casings to MOSFETs to motherboards and so on.


And remember my friend, future events such as these will affect you in the future.


#5
CyberMisterBeauty

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It seens that in the near future the widespread use of 3d printing will cause a massive deflation if it becomes efficient, fast and being able to produce most materials. By the way anyone could have a personal factory at home producing their customized and personalized goods without the need to go to a store. It will be great.



#6
Metalane

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It seens that in the near future the widespread use of 3d printing will cause a massive deflation if it becomes efficient, fast and being able to produce most materials. By the way anyone could have a personal factory at home producing their customized and personalized goods without the need to go to a store. It will be great.

You think 3D printers at-least advanced enough to produce decent clothing will available for a decent price this decade? I've been telling family and friends for years that 3D printers will become the "new" printer and must-have utility, but no one believes me haha.







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