Very thought-provoking if, like me, you sometimes write about postscarcity societies.

Originally shared by Yonatan Zunger

This article is part of my continued attempt to think through the changes in our modern economy. It was prompted by this plot from a 2014 article, showing how the prices of different things had changed over the previous decade: some things (like TV’s and computers) getting much cheaper, other things (child care, education) getting much more expensive.

The key thing that got me started on this was noticing that the things which got cheaper all had in common that new technologies created better economies of scale for them, while the things which got more expensive all had in common that they didn’t. This leads to some thinking about exactly what happens when a technology suddenly shifts the price of a good: when a “Magic Box” appears on the market that can make something virtually for free.

The answer appears to be a combination of three effects: one which makes everybody richer (because the good is itself cheaper; those with the most need benefit most from this stage), and two smaller “zero-sum” shifts: a shift of money away from people whose jobs were based on making the good that’s now cheap, and a shift of money towards industries which weren’t affected, essentially because more money is available to buy their goods and so they see price inflation. (Importantly, the second effect touches both workers and companies, but the third effect in many circumstances doesn’t directly affect workers – see the article for why)

This is all still relatively preliminary thinking, but I think there are some directions in here which could prove useful for understanding what’s going on in our economy and why.

https://medium.com/@yonatanzunger/what-costs-more-what-costs-less-magic-boxes-and-the-modern-economy-a8ed3fdfac6d#.e7ke22iuf