RE: The Deflationary Nature of Robotics

You are viewing a single comment's thread from:

RE: The Deflationary Nature of Robotics

aussieninja in LeoFinance • last year (edited)

That's exactly my point... I don't think we can say that technology is deflationary because there are so many factors in pricing. It should definitely reduce costs to corporations... but whether those savings get passed onto consumers is a whole different discussion.

Again, if it was true, you would expect household grocery expenditure to be significantly cheaper than in the 1970s, or the 1940s - and I'm just not sure that's happened.

I think you could say the same for cars.
In 1967 a new Ford Sedan cost $2,199 which is about $20,086.33 today. I'm sure Ford has so many more robots and process efficiencies now, but the average new car price now is around $43K.

Technology is just one piece of the puzzle and I don't think it can cause deflation just by itself.

last year in LeoFinance by aussieninja

0.00 ARCHON

4 votes

Sort:

Trending

[-]

taskmaster4450le last year

I don't think we can say that technology is deflationary because there are so many factors in pricing

We most certainly can. I just gave a list of technology products that have all gone down in price.

Lets look at more. Compare these to 1990:

the cost of a copy machine
the cost of a mobile phone
the cost of a television
the cost of a camera
the cost of appliances

Hell look at the cost of digging a hole with a backhoe compared to doing it by a shovel.

Now when you see prices going up, like with food, that is not because of technology. Technology demonetizes, dematerializes, and democratizes. Anything the digital realm has touched in the last 40 years has followed that pattern.

If you want to isolate on food, since 1940, have wages gone up? Did real estate price increase? How about the cost of regulation?

Certainly there are reasons for this. When you have areas that were 80K people in 1950 and now there is 1.9M, real estate is going to increase since there is no more land (as they say). That shows up in rents. Of course, real estate taxes always go up too.

Then we have regulations. Surely we want things such as pesticides monitored, both the production and destruction. Environmental factors are important. Yet there is a cost to that whether it is on the creation of the product or the wages paid to the inspectors. Since this is desirable, we pay the price.

So yes Excel reduced the cost of a spreadsheet to a corporation but it doesnt change the scenario when it comes to the other factors.

As I said, technology is naturally deflationary. Other aspects of society, not so much.

0.00 ARCHON

1 vote

[-]

aussieninja last year

I think I'm really struggling with this as a concept... and maybe it's product-specific.

Obviously food is way, way, way, way more automated now than in the 1990s, both with fresh produce and processed-food. The economies of scale for farms now in comparison is far more efficient, but you're right, there are a ton of other factors involved in pricing.

Televisions are absolutely cheaper... but mobile phones are harder to compare - we might be spending as much or more on the devices themselves and data... but these devices do so much more than in the 1990s and need way more data.

Again, even though automotive factories are way more automated than in the 90s, cars themselves are still a decent percentage of people's expenses... but again, they are safer, more efficient, etc.

I guess where I'm struggling is if technology is deflationary, and I'm sure you're right that it is, but there are other factors like wages, protections, real estate, etc are not deflationary, then how much is the overall effect will be?

Can robotics cause overall deflation if other factors are too inflationary? I guess the real question is... will robotics positively impact my life?

0.00 ARCHON

4 votes

[-]

taskmaster4450le last year

Another way of looking at it, think of this interaction in 1985. How much would it have cost?

If we were communicating, back and forth, it would likely have been by phone. Being in two different cities meant long distance charges. There was a per minute rate within each country domestically. If we were dealing international, it was even higher.

So a "discussion" over 10 minutes cost anywhere from a a buck or two to a ten spot. I recall ads for $1.19 per minute on some international calls.

If we used letters, there was paper, envelops, and postage (all which I am sure went up in cost). Yet, we are interacting with none of those costs, leaving aside the fact it would have been a two week turnaround through the postal systems.

0.00 ARCHON

1 vote

[-]

aussieninja last year (edited)

Oh absolutely... completely agree with that. Cheaper, more efficient, quicker, all the things.

The wild thing is... we pay $96 for our monthly mobile family phone (& data) bill and another $76 for our internet data... so I'm sure that's more than a average family's telecommunications and home entertainment bill in 1985 (allowing for inflation)... but again... it's not really comparable because we get so much more value... so technically it's amazingly deflationary, but as a percentage of disposable income, maybe not so much... but then maybe we're also not spending as much on drive-ins, bowling, bars, etc as people did in 1985. It's really hard to compare.

It blows my mind that for centuries a son would have a very similar life to his father... and now I can't even compare my life to how it was 2 decades ago.

0.00 ARCHON