The cost of living is, in truth, inherently deflationary. In spite of this, we continue to push a 150-year old agenda to grow GDP at great cost to human and planetary wellbeing. With the accelerating revolution in technology, It’s time we embraced a different paradigm.
“Technology is deflationary, [and] we are entering into an age of deflation unlike any the world has ever seen.”
So writes Jeff Booth in his excellent book, The Price of Tomorrow.
“Our economic systems were built for a pre-technology era when labour and capital were inextricably linked — an era that counted on growth and inflation, where we made money from inefficiency. That era is over, but we keep on pretending that those economic systems still work.
We need to accept deflation and embrace the abundance it can bring. Otherwise, the same technology that has the power to bring abundance to us and our world will instead destroy it.”
Booth’s central point is that the cost of production — for nearly everything — invariably lowers with advancements in technology, science and operations, and that for many things human beings need, it should be approaching zero.
Why, instead, are those same goods and services—including our food, where we live, how we learn, the medicines we take, and the cost of transportation—rising instead of lowering, often dramatically, thus becoming less affordable for the majority, whose wages have stagnated?
Consider these facts, from the Economic Policy Institute:
- Middle class incomes have shrunk by 23% relative to overall market growth, since 1979
- Non-executive wages grew just 9% against a productivity increase of 74% overall, since 1973
- CEOs now make 296 times what an average worker in their company does, up from 20 times, in 1965
- Wages for college graduates have been falling since 2000, and yet, the cost of an education has increased by 180%
- If home prices grew at the same rate as inflation since 1970, the median home price in the US today would be…