The Price of Tomorrow

02Why Everything Should Be Getting Cheaper

Technology is not just a tool for convenience or a luxury we enjoy; it is a fundamental force of nature that relentlessly drives prices down to zero. To understand why our future should inherently be a cheaper one, we must deeply examine the concept of exponential growth and how it differs from the linear world our brains evolved to understand. Human beings are incredibly bad at comprehending exponential trends. We are biologically wired to think in straight lines. If you take thirty linear steps, you end up thirty paces away from where you started, perhaps across the street. But if you take thirty exponential steps, where each step doubles in length, you do not just end up down the block. You end up traveling a billion meters, which is enough to walk to the moon and back. This failure to grasp exponential growth is why we continually underestimate the speed and impact of technological change. The most famous example of this is Moore’s Law, the observation made by Gordon Moore in 1965 that the number of transistors on a microchip would double roughly every two years, while the cost of those computers is halved. For decades, this law has held remarkably true. It is the reason the device in your pocket has millions of times more computing power than the massive mainframes that guided the Apollo missions to the moon, and it costs a fraction of the price. But Moore's Law is not just about computers anymore; it has infected almost every major industry on the planet. Consider the analogy of the chessboard, a story often used to explain exponential growth. The legend goes that the inventor of chess presented the game to an emperor, who was so thrilled he offered the inventor any reward he desired. The inventor asked for a single grain of rice on the first square of the chessboard, two grains on the second, four on the third, and so on, doubling on each of the sixty-four squares. The emperor, thinking linearly, agreed to what sounded like a meager request. For the first half of the chessboard, the amounts were manageable. But as they crossed into the second half of the board, the numbers exploded. By the final square, the amount of rice required was more than all the rice produced in the history of the world. We are currently entering the second half of the technological chessboard. The compounding effects of computing power, artificial intelligence, robotics, and renewable energy are merging, and the results are staggering. Software is quietly eating the world. When an industry becomes digitized, its marginal cost of production plummets to near zero. Think about a physical encyclopedia. It requires paper, ink, printing presses, warehouses, shipping trucks, and a massive sales force. To create one more copy of that encyclopedia costs a significant amount of money and energy. Now think about Wikipedia. Once the platform is built, the cost to distribute that information to one person or one billion people is virtually identical. The marginal cost is zero. This deflationary wave is moving beyond information and into the physical realm. Look at the energy sector. For centuries, our economic growth was tied to the extraction of scarce resources like coal, oil, and natural gas. These resources are finite, geographically restricted, and expensive to transport. But solar power is fundamentally different; it is a technology, not a fuel. As our ability to capture and store solar energy improves along an exponential curve, the cost of energy is plummeting. Within a few decades, we are looking at a reality where energy, the foundational input for everything we produce, could become practically free. If the energy required to run a factory is free, and the robots working in the factory require no wages, the cost to produce physical goods must fall dramatically. Artificial intelligence is accelerating this trend in ways we can barely comprehend. AI does not need to sleep, it does not require a pension, and its capabilities are doubling at a pace that makes Moore's Law look sluggish. We are teaching machines to see, hear, understand, and predict better than humans can. From diagnosing diseases with higher accuracy than top doctors, to driving cars safer than human drivers, AI is systematically removing the most expensive input in any business: human labor. If energy becomes abundant and cheap, and if intelligence and labor are digitized and provided by algorithms, the natural conclusion is a world of extreme abundance. The cost of food, housing, transportation, and healthcare should be falling off a cliff. We should be entering a golden age where the basic requirements for a comfortable life cost almost nothing. The technology is doing its job perfectly. It is destroying scarcity. So, we must ask ourselves a very uncomfortable question. If the cost to produce everything is rapidly approaching zero, why are you and I paying more for our groceries, our homes, and our medical care every single year? The answer is not that the technology is failing. The answer is that the economic rules of the game have been rigged to prevent those prices from falling, creating a dangerous illusion that is putting our entire society at risk.

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