This is a concept that @taskmaster4450 has been banging the wardrum on for years. It's been rattling around my brain ever since, and it's a very good lesson to remember in the world of economics and finance.
The spark that catalyzed this post was some random tweet that triggered me hard yesterday. It read, "What would the Founding Fathers have to say about the price of eggs today?" Needless to say... my response was unkind, as is often the case when resolving human to human interactions. Just kidding I'm a robot. Fooled you good didn't I?
So what would the Founding Fathers have to say about the current price of eggs? Probably that they are insanely cheap and it's amazing a profit can be turned at such a low price. Current price volatility is meaningless compared to hundreds of years in technological advancement.
Seriously though, coal-fueled electric power plants did not exist until the 1880's. The country was founded in 1776. Do tha maths.
https://www.in2013dollars.com/Eggs/price-inflation
It's surprising what certain items at the grocery store would have set you back in 1920. For instance, a dozen eggs cost 47 cents ($6.06 today), one pound of round steak cost 40 cents ($5.16 today), and three pounds of macaroni cost 25 cents ($3.22 today).
I can't even find data for 200 years ago, and the data that I do get is riddled with inconsistency and likely can't be trusted to an accurate degree. However, the trend is obvious and true:
- technology creates abundance
- abundance creates supply
- high supply lowers prices
- economics 101
Unfortunately the Keynesian economic theories upon which the legacy model is founded HATE DEFLATION. Deflation is the worst thing in the world, according to modern economic theory. Whether or not Bitcoin can prove that theory wrong is yet to be seen, but somehow I doubt it given all the research I've done. Intelligently allocated inflation is the real killer dapp of crypto. Hive is lightyears ahead in this regard, even if it has an entire mountain range to climb to get where it needs to be.
Back to the basics
How much did a modern data phone cost in 1985? The answer is that modern smartphones did not exist, and if you were in possession of one the government wouldn't think twice about murdering you and reverse engineering your alien tech for personal gain. There's really no doubt about such a fact.
Citizens who live under the poverty line today can afford a car and rent and a Netflix subscription. What could poor people afford to buy a few centuries ago? Scraps of food so they wouldn't starve to death? If they were lucky.
When's the last time a friend of yours died from a bacterial infection? That used to be a quite common occurrence before penicillin was invented. What about dentistry? What do you think that was like before pain-killers like Novocain? Care to guess what's worse than needles? Passing out from pain.
So yeah life isn't fair and there's a lot of messed up stuff going on in the world today, but it's all a matter of perspective and frame of reference. The world is becoming more volatile recently. Waves move up and waves move down. Those who complain about every downswing while taking every upswing for granted are not to be taken seriously. This is the mindset of the hypocrite and should be avoided if possible. It is our responsibility to surf these waves and not wipe out with the rest of the plebs living paycheck to paycheck.
At the end of the day it doesn't matter if USD was worth x10 more a century ago than it is today... unless someone in your family is a chucklehead that left their legacy to rot in a bank account holding fiat. Literally no one does that, so why does everyone focus on dollar devaluation and how much money was worth before they were even born?
This classic screen capture from Die Hard gets a lot of attention. In 1988 gas was 75 cents a gallon. OMG why isn't gassoline still 75 cents today that's not fair! Really? How much money were you making in 1988? The federal minimum wage was $3.35.
Nobody cares!
They want all of the benefits and none of the drawbacks as they reminisce nostalgically about "better days". But those days were never actually better, they were just different, and we simply remember them as better in every way because that's how our dumb brains work. Again, this is a hypocritical greed-based mindset and should be avoided if possible.
Rather than thinking about how much "cheaper" things used to be back in the day, the question we should really be asking is:
How many hours of work would it have taken to buy that?
Within this context it's easy to see that it doesn't matter if eggs only cost 50 cents a hundred years ago. If it takes an hour of work to earn 50 cents: this is the real metric: one hour. Once we start measuring the cost of product in terms of time it becomes much more apparent that goods and services back in the day were more expensive than they are today... and that's including central bank exploitation over time. Take away the currency exploitation and we can see that crypto will usher in an insane world of even more exponential abundance.
Conclusion
Technology creates abundance. It is known. Interestingly enough, technology is moving directly into the field of currency and even intelligence itself. Currency will become exponentially abundant (and valuable) because of technology. Intelligence itself will become more abundant because of technology. There are going to be a lot of bumps and bruises along the way. All we can do is try to enjoy the ride even if it is a bit uncomfortable.
We would also do well to remember that there are simply more people in the world today than there were in the past. More people means less resources per person. It's simple math that most tend to ignore within these conversations of wealth distribution. Sure, rich people today are richer than they've ever been, and the disparity between rich and poor has never been greater, but that variable doesn't cancel out other important variables to consider as well.
Nostalgia is a trap. We tend to think about the past longingly in these scenarios and forget about all the hardship when it suits our narrative. Then we wrongfully compare those false memories to the present day and come to incorrect conclusions. Couldn't be me.
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