July 4, 2020

IT'S IMPOSSIBLE TO OVERSTATE DEFLATIONARY PRESSURE:

The case for optimism: By 2030, everything will be so cheap that we'll be able to end poverty (ADELE PETERS, 7/01/20, Co.Exist)

A decade ago, mainstream experts weren't predicting that the cost of solar power would fall as steeply as it has by 2020--it's now down more than 80% so far. Tony Seba, a Silicon Valley entrepreneur and investor, was one of the few to get the forecast right. Seba and investor James Arbib, who run a think tank called RethinkX, now say that similar changes could happen in other parts of the economy, transforming the cost of everyday life so significantly that it could pull people out of poverty.

"We are on the cusp of the fastest, deepest, most consequential transformation of human civilization in history, a transformation every bit as significant as the move from foraging to cities and agriculture 10,000 years ago," Seba and Arbib write in a new report called Rethinking Humanity. They predict costs falling by at least 10x in key sectors including transportation, food, energy, materials, and information, while production processes simultaneously become more efficient by an order of magnitude. "Within 10 to 15 years," they write, "everyone on the planet could have access to the 'American Dream' for a few hundred dollars a month." [...]

The report also predicts that the cost of energy will continue to fall. In many markets, renewable electricity is already cheaper than fossil fuels, but they say it will drop further, and the cost of battery storage will also steeply fall. Other forms of energy, such as gas used for cooking or heat, will move to cheap electricity. The cost of producing food will also dramatically fall, the report says. The "precision fermentation" that companies such as Perfect Day use to make a vegan ice cream with a protein genetically identical to dairy milk, or that Impossible Foods uses to give its plant-based burgers the characteristic taste of beef, will become much cheaper: In a separate paper, the analysts predict that it will fall from $100 a kilo in 2019 to around $10 in the next five years, and $2 a kilo in 2030. That means new foods can be cheaper than food made from animals; the analysts think that the livestock industry will shrink and be replaced with a new production system where foods are engineered from a molecular level. The cost of groceries for a family could fall from hundreds a month to $51 a month.

The cost of communications will also fall. Seba points to the example of an Indian company called Reliance Jio, which gives away free phones with a phone plan that offers 20 gigabytes of data for $20 a month; he suggests that it will be possible to provide 10 times as much data by 2030 for the same cost, shrinking phone bills. The cost of clean water will also shrink, as technology such as desalination drops in cost. In total, the report says, it could be possible to provide someone's basic needs--1,000 miles of transportation, 2,000 kilowatt-hours of energy, complete nutrition, clean water, 500 square feet of living space per person, communications, and even continuing education--for less than $250 a month by the end of the decade. By 2035, that cost could be cut in half.

Posted by at July 4, 2020 5:56 AM

  

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