5 ms·

The most exciting thing is that because of the accelerating pace of technological deflation, the cost of almost everything is asymptotically approaching $0. Ac

by dstein 16y ago

The most exciting thing is that because of the accelerating pace of technological deflation, the cost of almost everything is asymptotically approaching $0. Access to all information, global communication, books, entertainment (movies, tv shows, music etc), software, and even hardware are getting cheaper at an alarming rate. The entire body of human knowledge (art, history, science etc) is being interconnected into a global application that will be instantly accessible and practically free (in inflation adjusted dollars). It will be interesting what effects this will have on our socio-economic system.

CWIZO 16y ago
Umm, what exactly is approaching $0? Some examples please.
- gwern 16y ago
  > Access to all information, global communication, books, entertainment (movies, tv shows, music etc), software, and even hardware are getting cheaper at an alarming rate >> Some examples please.
  - CWIZO 16y ago
    Yeah those aren't really examples. Books, tv, movies, music: you have to pay to get it (unless you are a pirate). Some software is free, but you have to pay for the, well, paid one. You have to pay for your global communication (internet). And you most certainly have to pay for your hardware. So which of those things is rapidly approaching 0$ (except maybe some apps on appstore)?
    - woodall 16y ago
      Not at your local library.
    - farnsworth 16y ago
      Watch a tv show in 2000: Buy a TV, pay for cable, watch TV with many commercials. Watch a tv show in 2010: Go to your library's computer (or the computer you probably already have), access hulu.com, watch for free with minimal commercials. Buy a song in 2000: Drive to a store, buy the CD for $15 and cd player Buy a song in 2010: iTunes or Amazon for $.99. The point is not that nothing is free, or that it may never be free, but that it's very cheap and very accessible with less effort and fewer different orthogonal pieces of specialized hardware.
- bryanlarsen 16y ago
  "asymptotically" means that it never actually reaches $0.
  - CWIZO 16y ago
    Didn't know that word (not a native speaker). Thanks. My question still stands though.
    - bryanlarsen 16y ago
      In my experience, non-English speakers with degrees tend to have a good grasp of technical words like "asymptote". It's the little stuff that tends to trip them up. Maybe like the transformation from "asymptote" to "asymptotically". :) This rule of thumb does seem to apply much more strongly to the speakers of Asian languages than the speakers of European languages, though.
- dstein 16y ago
  Let's see if I can explain it another way. The price of everything eventually reaches $0. There is only a certain period of time from which you can profit from any particular good. If you make a hamburger, you have probably 2 hours to sell it before it goes bad and is worthless. And likewise, if you create a cell phone, you have maybe 2 years to sell it before nobody will want it. And if you make a movie, you have a few months where you can sell the movie (in a theater) and make money from it. Once the movie hits the internet the ability to make money off it decreases (piracy will happen more in the future, not less). Make a new app for the iPhone and you have a few months where you can make money before a free alternative arises. This is technological deflation. And the pace is increasing. The time you're able to make money is decreasing rapidly. Mathematically, as that time approaches 0, the effective price of everything starts reaching $0. Why buy anything today, when it'll be effectively free tomorrow?
  - jodrellblank 16y ago
    I don't really follow - the hamgurger wont be free tomorrow, it will be mouldy tomorrow and you'll be more hungry. The film may be free but it will be "old", and the app may have a free clone but people (businesses) still pay for old proprietary software now instead of free clones.
    - dstein 16y ago
      * the hamgurger wont be free tomorrow, it will be mouldy tomorrow and you'll be more hungry. The price for that particular hamburger will be $0 once it's mouldy. It only reaches $0 when nobody will pay anything for it so it never actually reaches $0. Now imagine McDonald's developed technology that could produce a million hamburgers per second really cheaply. I imagine the price of hamburgers would become practically $0. This is essentially what's happening to most aspects of our technology, information, and digital goods. * The film may be free but it will be "old", and the app may have a free clone but people (businesses) still pay for old proprietary software now instead of free clones. It's not that it instantly drops to $0. It's deflation, the price decays over time. The longer a film is easily available on the internet, or the longer a "good-enough" free app is out the more the price of the film and app fall. The pace of this deflation is increasing as technology makes it easier and cheaper to produce and distribute digital goods.
- jodrellblank 16y ago
  The cost of 1MB of memory, 1 FLOPS of processing power, 1MB of long term storage, 1Kbps of bandwidth wired or wireless, 1 email sent to a person, and correspondingly the cost of storing one book or film or picture also falls. You don't actually get a 1Gb hard disk made and on your doorstep for $0, but you do get much more space for the same money than you did three years ago so cost per Gb falls and falls towards zero. (Though I don't follow how this counts as the "cost of almost everything" unless you say something like, a new car costs the same as one ten years ago but now comes with more features, so each feature cost less than it used to" perhaps?).
- erikstarck 16y ago
  Everything that can be automated will be automated. The price of something that has been automated is zero.
joe_the_user 16y ago
Current counter-examples would be health care, energy, food, raw materials and land. Food might start to go down at some point but I don't see land and raw materials declining for a little while, though if telecommuting from Utah or outer-Mongolia becomes easy, land might well get cheaper. Health care's an odd thing. Maybe enough biology research will bring the price down but so-far it's increased the price. A lot of this comes because of a market that's happy to absorb a higher priced replacement for a given item if the replacement can claim superiority in other ways. This sound OK but it's had truly poisonous results. Open source biology could eventually have an impact here. Energy is a long story in itself... Still, it's interesting to think about these tendencies.
- elai 16y ago
  I think a large part of health care price inflation comes from extreme distortions that governments and case law bring to that industry.
  - jamesbritt 16y ago
    Also, as people live longer, the care required to maintain/extend life gets more sophisticated and expensive. And it doesn't help that many people eat crap and refuse to walk anyplace.

by dstein 16y ago

CWIZO 16y ago

Umm, what exactly is approaching $0? Some examples please.

gwern 16y ago
> Access to all information, global communication, books, entertainment (movies, tv shows, music etc), software, and even hardware are getting cheaper at an alarming rate >> Some examples please.
- CWIZO 16y ago
  Yeah those aren't really examples. Books, tv, movies, music: you have to pay to get it (unless you are a pirate). Some software is free, but you have to pay for the, well, paid one. You have to pay for your global communication (internet). And you most certainly have to pay for your hardware. So which of those things is rapidly approaching 0$ (except maybe some apps on appstore)?
  - woodall 16y ago
    Not at your local library.
  - farnsworth 16y ago
    Watch a tv show in 2000: Buy a TV, pay for cable, watch TV with many commercials. Watch a tv show in 2010: Go to your library's computer (or the computer you probably already have), access hulu.com, watch for free with minimal commercials. Buy a song in 2000: Drive to a store, buy the CD for $15 and cd player Buy a song in 2010: iTunes or Amazon for $.99. The point is not that nothing is free, or that it may never be free, but that it's very cheap and very accessible with less effort and fewer different orthogonal pieces of specialized hardware.
bryanlarsen 16y ago
"asymptotically" means that it never actually reaches $0.
- CWIZO 16y ago
  Didn't know that word (not a native speaker). Thanks. My question still stands though.
  - bryanlarsen 16y ago
    In my experience, non-English speakers with degrees tend to have a good grasp of technical words like "asymptote". It's the little stuff that tends to trip them up. Maybe like the transformation from "asymptote" to "asymptotically". :) This rule of thumb does seem to apply much more strongly to the speakers of Asian languages than the speakers of European languages, though.
dstein 16y ago
Let's see if I can explain it another way. The price of everything eventually reaches $0. There is only a certain period of time from which you can profit from any particular good. If you make a hamburger, you have probably 2 hours to sell it before it goes bad and is worthless. And likewise, if you create a cell phone, you have maybe 2 years to sell it before nobody will want it. And if you make a movie, you have a few months where you can sell the movie (in a theater) and make money from it. Once the movie hits the internet the ability to make money off it decreases (piracy will happen more in the future, not less). Make a new app for the iPhone and you have a few months where you can make money before a free alternative arises. This is technological deflation. And the pace is increasing. The time you're able to make money is decreasing rapidly. Mathematically, as that time approaches 0, the effective price of everything starts reaching $0. Why buy anything today, when it'll be effectively free tomorrow?
- jodrellblank 16y ago
  I don't really follow - the hamgurger wont be free tomorrow, it will be mouldy tomorrow and you'll be more hungry. The film may be free but it will be "old", and the app may have a free clone but people (businesses) still pay for old proprietary software now instead of free clones.
  - dstein 16y ago
    * the hamgurger wont be free tomorrow, it will be mouldy tomorrow and you'll be more hungry. The price for that particular hamburger will be $0 once it's mouldy. It only reaches $0 when nobody will pay anything for it so it never actually reaches $0. Now imagine McDonald's developed technology that could produce a million hamburgers per second really cheaply. I imagine the price of hamburgers would become practically $0. This is essentially what's happening to most aspects of our technology, information, and digital goods. * The film may be free but it will be "old", and the app may have a free clone but people (businesses) still pay for old proprietary software now instead of free clones. It's not that it instantly drops to $0. It's deflation, the price decays over time. The longer a film is easily available on the internet, or the longer a "good-enough" free app is out the more the price of the film and app fall. The pace of this deflation is increasing as technology makes it easier and cheaper to produce and distribute digital goods.
jodrellblank 16y ago
The cost of 1MB of memory, 1 FLOPS of processing power, 1MB of long term storage, 1Kbps of bandwidth wired or wireless, 1 email sent to a person, and correspondingly the cost of storing one book or film or picture also falls. You don't actually get a 1Gb hard disk made and on your doorstep for $0, but you do get much more space for the same money than you did three years ago so cost per Gb falls and falls towards zero. (Though I don't follow how this counts as the "cost of almost everything" unless you say something like, a new car costs the same as one ten years ago but now comes with more features, so each feature cost less than it used to" perhaps?).
erikstarck 16y ago
Everything that can be automated will be automated. The price of something that has been automated is zero.

joe_the_user 16y ago

Current counter-examples would be health care, energy, food, raw materials and land. Food might start to go down at some point but I don't see land and raw materials declining for a little while, though if telecommuting from Utah or outer-Mongolia becomes easy, land might well get cheaper. Health care's an odd thing. Maybe enough biology research will bring the price down but so-far it's increased the price. A lot of this comes because of a market that's happy to absorb a higher priced replacement for a given item if the replacement can claim superiority in other ways. This sound OK but it's had truly poisonous results. Open source biology could eventually have an impact here. Energy is a long story in itself... Still, it's interesting to think about these tendencies.

elai 16y ago
I think a large part of health care price inflation comes from extreme distortions that governments and case law bring to that industry.
- jamesbritt 16y ago
  Also, as people live longer, the care required to maintain/extend life gets more sophisticated and expensive. And it doesn't help that many people eat crap and refuse to walk anyplace.