The Exponential Ways Tech Affects Our Future
“Continuing on the existing path, without significant changes to the way we think about economics and the way we have constructed economies, will ensure chaos.”
So begins visionary technology leader and author, Jeff Booth’s new book, The Price of Tomorrow — Why Deflation is Key to an Abundant Future. In it, Booth offers a thesis about the current state of our economies and the global effects of digitization on inflation. He suggests that since technology is deflationary — it rapidly advances as prices fall — it’s on a collision course with the current global economic system, which is inflationary. Easy credit is driving growth at an unsustainable pace, which creates insurmountable debts, which mires the global economy and creates an unsafe, polarized world.
“There are two schools of thought on how to move forward from this,” says Booth. “One side calls for socialism; the other says to tax the rich more. But both are missing the fundamental point — that technology deflation is a good thing.”
Booth has been at the forefront of digitization and other technological change for 20 years. He led BuildDirect — a technology company that simplified the building industry — through the dot-com meltdown, the 2008 financial crisis and multiple waves of disruption. He’s a founding partner of OtioLabs, a software product development partner in India; co-founder of addy — an online investment platform that allows anyone to purchase shares in high-yield real estate for any dollar amount; and co-founder of NocNoc — a technology platform in Southeast Asia that allows users to find technicians for a project through an intuitive, web-based interface.
At first glance, it may appear odd that a man benefitting from our current economic system is warning against it, but as Booth explains, that makes him the perfect person to sound the alarm.
“I wrote this book because I’m one of the beneficiaries of the current system,” he says. “I have assets, I’m a leader in technology for four different companies, so I see how the massive benefits derived from our technological advancements have serious societal consequences; consequences that can be really good if we change our economic systems to deal with them, or really bad if we don’t.”
Booth points out that while every company he’s involved with is using technology to make the world a better place, the productivity gains from their advancements, especially in artificial intelligence, are going to drive inflation rates down so far it will become impossible to counteract. At that point, populism, which is on the rise as a byproduct of the current system becoming increasingly unequal, will grow exponentially. What we need, he says, is a new framework.
A believable narrative
“My parents grew up in an inflationary environment, just like my grandparents and their parents and grandparents before them,” says Booth. “This is the system we’re living within today — one built for another time. All signs point to it collapsing.”
The concept that we’re locked into a way of life because it’s all we’ve ever known, is what Booth calls a “believable narrative.” But what if the time-honored systems we’ve used to drive wealth and better living conditions are no longer the best model? If the only thing driving economic growth is easy credit and debt and if the only way to keep growing is by adding more debt that can’t be repaid, we cannot honestly say that our economic system still works.
“The only way to keep our economies growing and combat the effect of exponential technology, is to allow debt to rise exponentially as well,” implores Booth. “All of the top artificial intelligence researchers say that somewhere between five-40 years from now, we’re going to have AI that’s smarter than all of us. And if jobs are a function of our intelligence, employers are going to want the smartest worker. While economists are busy telling people not to worry, that AI is going create new jobs, the reality is, that might not happen. Technology is deflationary, and we had better find a way to allow people who lose their jobs a way to live. The cost of inaction is revolution and wars.”
A simple solution for digitization
According to Booth, in the past 18 months, the world has doubled its progress of the last 50 years.
“Things aren’t moving fast; they’re moving so fast we can’t comprehend,” says Booth. “it took over USD185 trillion of debt creation and monetary easing over the last 20 years to stop deflation – to stop things from getting cheaper. We’re dealing with the consequences of society starting to break because of that. But look out — our existing system will need far more debt creation and bailouts which means it’s about to get a magnitude worse.”
Booth’s book ends with a “simple solution”: What if the natural order of things was permitted? What if, instead of trying to stop deflation at all costs, we embraced it? Along that continuum, as technology removes jobs, prices will keep falling, allowing those who lost their jobs, a way to share in the benefit of technology abundance without massive transfer of wealth.
“Technology has changed the operating system of the world we live in,” says Booth. “And that operating system — the rules by which we have built our wealth and economies — needs an overhaul. One just needs to look at the speed at which technology is advancing to understand a system based on inflation is untenable.”
Booth acknowledges that this is not an easy concept to conceive. He knows his ideas are radical. But he wholeheartedly believes that the challenges of letting things take their natural course, over continuing to misdirect an outdated system, will be infinitely easier than facing more dire consequences in the future.
“The world order that we grew up with will not last if we stay on this path,” Booth reiterates. He ends his book with a call to action. “I encourage you all to contribute to the conversation and the debate, so that together, we can design a world that allows for the best in humanity to thrive as we move into an exciting future of abundance.”