“Zero Money”: First Principles Thinking About Monetary Value
Change the Money, Change the World (15)
Part 4(C) — Phases of transition to a novel paradigm 2(B)
I continue with a second section of a description of the second of the four phases that need to occur. I began with three clear examples of things actually happening already. Much more significant and disruptive trends are not yet fully recognized in the consciousness of the general public, including:
a. The future of energy: On this topic we should begin with where we are as to energy as part of our economy. It constitutes a major input cost for every form of production and distribution in all goods industries. Lighting and other electrical usage are equally essential to all service industries. Outside of goods and services production it is the main thing we need for our personal lives. Obviously what will happen to the price of energy and the impact of prices on wages of the millions who work in energy production, distribution and other functions makes the future of energy perhaps the most important potentially disruptive factor in the economy of the world.
This is the legacy energy access path for the world today despite its tremendous inefficiency in extracting, processing and distributing such indirect sources of solar power. Meanwhile has been an exponential growth of need for energy which in combination with inefficient access and refinement has led to an existential threat from global warming. Military industrial complexes are a huge expense for maintaining access to affordable oil. Coal and oil are our overwhelming current source, indirect source, of solar energy. Natural gas is another. Technological advances in farming energy directly from the sun over the last 60 years has, as documented by Booth, dropped in cost from over $2100 to less than $1 per watt. Other direct sources of energy are also possible, but none with the potential of solar energy. A transition to a solar powered world is possible, but it will take some time to reform the political, social and physical infrastructure of the legacy energy paradigm.
There is a lot to know about other related technological innovations that add to the inevitable mass adoption of solar power. These include battery technologies and others that lend to solar energy storage capacity such as the flywheel. Altogether, the compelling story is one of market opportunity for a creative disruption undermining investment in the legacy indirect solar energy economy. The efficient system will win with lower prices, a better infrastructure and inevitably fewer and lower paying jobs. This is a deflationary scenario, but there will be abundant energy that will cost us far less. Clearly, as indicated by my thesis, we will need to fix the money with the necessary redistribution of the wealth that is so skewed in a world being destroyed economically and environmentally by a politicized military industrial complex dominated by big oil.
b. The future of intelligence: Artificial Intelligence is a general purpose technology that deeply changes the entire economy and the nature of society. It will eliminate many existing jobs while requiring some, fewer, workers prepared for jobs that have not existed before. Creating a technology that is intelligent is an unprecedented disruption at a new register, unlike the advent of electricity or the transistor or the computer chip. Those caused social upheavals because of changing how people worked, but the amount of new work and ways of working adapted as to the amount of employment. They evolved well in a model of increased consumption with rising prices and wages. AI portends to provide an abundant future but with a very different political, social and economic structure.
We humans have been the greatest intelligence in the world. This has enabled us to innovate technologically for leveraging that intelligence to store and process knowledge, then also output that processing for permanent access. This enables anything and everything we are capable of doing as humans. AI is our creation too, but it has the ironic capacity for a kind of intelligence different from our own, and also greater than our own in certain respects. There are unlimited ramifications of our creation of AI. I will only observe how the new intelligence is disruptive to, and potentially remedial for the Keynesian economic model. After all, error correction may be the basis of intelligence.
Essentially what our brain does and what we program computers to do is run an algorithm that finds and recognizes patterns of data input, stores that input, then processes that input in comparison to new incoming data as to what correction of the prior information is to be for establishing the new stored data set. Our brains need to make many modifications to stored data in order to be efficient. For example we decide what is important and what is not rather than letting everything remain important. Our brain has a certain limit of storage and also a limit of speed for processing stored information. We don’t remember perfectly the information we receive. We also repeat mistakes because we forget mistakes until repetition of mistakes leads to error correction. Computers have now reached a tipping point in technological development such that they make error corrections and never forget them, can process information incredibly faster than a brain, and have a storage capacity increasing multiples of a human brain enabling never forgetting any input ever and remembering perfectly. We do have enough intelligence to see what is on the horizon: AI in many respects can be more intelligent than humans.
The key to grasping what AI will cause with respect to prices and jobs is to understand it will progress rapidly from a narrow type of intelligence to general intelligence. The kind of AI that was demonstrated in superior mastery of the game of Go, perhaps the greatest challenge of human capacity for pattern recognition and error correction in a narrow domain, will also surpass the human superiority for general intelligence, for taking pattern recognition in one domain to others. Many jobs, for acquiring them and advancing in them, depend on narrow specialization and ongoing tracking and acquisition of the meaning of innovative developments in that field of work. General AI will put more jobs at risk by doing them better at a drastically lower cost, probably for corporations already established in the benefits of computer network effects. AI will be hugely deflationary in lowering prices and average per capita wage incomes (fewer will work and even fewer will work full-time and very few will make most of the money in actual salaries and bonuses). There will be an investor class whose main issue will be what to do with their free time, the most valuable thing on the planet.
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Finally, Jeff Booth points out some radical social change issues that will drive transitioning out of the existing economic paradigm (and here I add I am riding the horse but going to my own destinations):
a. Artificial General Intelligence, AGI, is not human and can be used for anything. I can remember as a teenager the primary directive for robots asserted by my favorite science fiction writer, Isaac Asimov, from his early writings in the 1950s: thy shall not harm humans. That particular law of robotics is just as important now for a multitude of reasons and situations, not just for not doing physical harm. For our economic system paradigm of the future it means AGI’s benefits must be widely and evenly distributed as possible, leaving no one in any degree of impoverishment for any of the hierarchy of human needs.
b. Another important observation rooted in Booth’s writing that I find indicative of a broader understanding is that technological innovation in general, and particularly the most powerful, AGI, is now under the legacy economic paradigm having its development dominated by centralized powers, namely governments and corporations with central banks and political parties serving groups of oligarchs in various nations and regions. That broader understanding returns to the need for decentralization because the goals, needs and desires of such groupings of individuals are certainly not demonstrating a concern for the abilities and needs of the world population as a whole.
The existing credit and debt economy has completed several cycles accumulation unsustainable debt and has entered a culminating major correction. Not only is there unsustainable debt, fiat currency printing has exploded such that there is a real danger of hyper-inflation coming to the second world and eventually to the first world just as it has to the third world. A pan-national adoption of a fixed amount of units of a medium of monetary account is required. A social and political struggle will have to ensue to adapt the current world to this major paradigm shift and gradually adopt to a technological monetary medium of money.
I have summarized and expanded on many ideas introduced earlier with the link to Jeff Booth’s book “The Price of Tomorrow”. Since that publication he has expressed his own opinion about adopting a technological monetary medium of money:
“The unwind in whatever form it takes is going to be brutal,” he predicted. Booth believes the only two choices left are grim with the first being governmental default on global debt through a deflationary depression, which would include a banking system collapse, or default through hyperinflation, which appears to be starting already with mass money printing… In my humble opinion — Bitcoin is a ‘must.‘ Not just for your wealth but as a lifeboat.”
‘Price of Tomorrow’ author says Bitcoin is a ‘lifeboat’ amid financial turmoil
Change the Money (1) Preamble — Monetary value true by nature
Change the Money (5) Introduction (1) — Zero Money & First Principles
Change the Money (8) Part 1 (A) The technological solution
Change the Money (10) Part 2 (A) The Naming of the Beast
Change the Money (12) Part 3 Ending Inflation and embracing deflation
Change the Money (13) Part 4(A) — Phases of transition 1
