THE HUMBLE LIBERTARIAN

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Wednesday, January 16, 2019

Why Aren't Prices Worse? (Part II. of Why Were Libertarians All Wrong About Inflation?)

By: Wes Messamore
The Humble Libertarian


(This is Part II of a series. Here's Part I.)

Here's a graph of the Adjusted Monetary Base, the sum of circulating currency and deposits in banks.

That's quite an event wouldn't you say?

But there isn't some Zimbabwe Dollar-style price holocaust happening either. Why not?



One theory:

The Law of Accelerating Returns


Ray Kurzweil, Google's Chief Engineer and arguably the world's foremost authority on artificial intelligence (since he's helped invent so much of it)––

Has predicted that the accumulation of exponential improvements in the price performance of digital computation will overwhelm our civilization the way a black hole singularity in space overwhelms anything within its gravity well, blasting a hole through the fabric of human history itself and pulling us all down into it and creating an entirely new cosmos, an unfathomable technological utopia on the other side––

And he even nails down a time forecast to a single calendar year for when all that will happen:

He says in his 2001 paper:

The Law of Accelerating Returns––

That in the year 2049 a computer capable of the computational power of every human mind on the planet in 2001 combined–– will cost $1000 worth of 2001 USDs. A startling prediction, and you could see how this might be disruptive to say the least.

But astonishingly enough it's a safe prediction to make based on the last hundred years' trajectory of the price performance of digital computation.

Here's a graph of the performance of digital computation from 1900 - 1998:



Here's the graph of the performance of digital computation from 1995 - 2012. Be aware that it is displayed in a logarithmic scale by taking note of the numbers along the vertical axis:


Some prominent dates from Kurzweil's analysis in The Law of Accelerating Returns Are:

We achieve one Human Brain capability (2 * 10^16 cps) for $1,000 around the year 2023.

We achieve one Human Brain capability (2 * 10^16 cps) for one cent around the year 2037.

We achieve one Human Race capability (2 * 10^26 cps) for $1,000 around the year 2049.

We achieve one Human Race capability (2 * 10^26 cps) for one cent around the year 2059.

Another way of stating the law of accelerating returns is that changes that accumulate exponentially seem to happen slowly at first, then happen all at once.

So my theory is that there's so much value being created right now by the exponential growth of the computational economy, which is like a cosmic event, that it's bailing us out of what would have otherwise been a really devastating monetary crisis.

And if Ray Kurzweil is right, and I don't see any reason to doubt it after reading his book, The Singularity Is Near, then the world is about to get very interesting.



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