AI &Tech Promises, Rent Bills Disagree: When’s the Drop?
Ok, AI is great! When does my rent bill come down? You see, technology is a one-trick pony. It cannot fix broken distributive economics. Technology (of a part of the 3rd and 4th Industrial Revolution type) has made things that are not that important so cheap but have yet to make a dent in the stuff that is very important.
It was only the 2nd industrial revolution and the ensuing mass production that dramatically improved lives. These new techs coming after 2000 appear real but the reality is that it's just a trick, a magic trick.
Housing — yeah where we humans actually live, has gone up. Rent bills are crippling people. Since the late 2000s, it has gotten worse, in most countries and most cities. Don't blame it on population increases. If tech is so magical, it was supposed to fix this like how it fixed electronics.
Healthcare — yes, the care we really need to stay alive, has gotten more expensive. It's freaking costly now. Talk about literally costing an arm and a leg. Even dying is expensive these days. Back then it wasn't.
College education — the one you now almost need to participate in this new global economy, has gone parabolic. The wonderful efficiencies brought by tech have not reduced college tuition.
Even the price of new automobiles has gone up. With all the technology and all the efficiency gains, a new car costs more than it ever did.
Okay, the Blackwell GPU is here. The computing power in this thing is insane.
It's packed with 208 billion transistors and provides 20 petaflops.
Okay, that is massive, but I really want to know when my rent bill will come down. How do we move from here to rent prices going down?
What I am waiting to hear is a story that goes like this:
“Technology efficiencies brought online by the Blackwell GPU were so massive that it was deployed in construction robots that dramatically reduced housing construction costs by 10X and ultimately cleared the 7.2 million housing backlog in USA. Rents in coastal cities reduced by 70%, from an average of $3,800 for a 2-bed apartment down to $1,140. There was some trouble in the real estate market and bank balance sheets, but the Fed bailed them out, and the nation lived happily ever after. A new era of abundance was unleashed, as if the Roaring Twenties had a child with the Post-War Boom.
In the 50s, 60, and 70s, one guy, holding an average job at a warehouse, was able to pay off his mortgage, pay off two cars (for himself and his stay-at-home wife), and save for college tuition for his three kids. This was the golden era of capitalism. An era of abundance.
The abundance in the current era, characterized by having free calls, emails, and so many movies and series to watch on Netflix is a mirage. It is not really abundance, at least of the things we need so much. If it is truly abundance and wealth, then why do we feel poorer than our parents and why are we poorer than our parents? We can barely afford rent, less much to save.
Let's say, the reason why the millennial generation is poor is because distributive economics have been broken. Then why hasn't technology assisted in fixing that which is broken, since technology makes everything better?
The promise of AI will remain hype unless it can solve the most basic of problems like housing, healthcare, and education.
With all the advances in information storage, retrieval, and distribution you would have thought education would be transformed. We will probably never hear a story like this:
With the advent of 4th Industrial Revolution, education was transformed. Havard was the first mover in this space, it cornered the market as it had unparalleled delivery efficiencies. Other colleges and unis were quickly driven out of business. Havard enrollments increased at a pace of 35% CAGR for 20 consecutive years. ..replace Havard with Udemy for as sweeter story.
Tech can’t cure elitism.
Ciao!
