Is The Cost of Living Going to Plummet in 20 Years?
While technology has been making our lives easier and better, it has also gained a reputation for cutting jobs. There is two ways to the fact that software and machines are gradually replacing human workforce, and limiting jobs as a result.
It is no surprise that people are worried about modern robotics and AI that are likely to take over even many more jobs in the future.
Understanding the situation, a number of countries, viz. Finland, India, and Canada have started running experiments on "universal basic income"- the idea of providing a regular sum of money to the people irrespective to their employment.
Even though many people are worried about jobs, a whole new process can actually be underway currently, which is- demonetization of the cost of living.
The cost of living is becoming cheaper with each passing day, and it is quite possible that in next 20 years we will be able to reach a point where the cost of everything- food, clothing, housing, etc. will become nil.
If you will observe the spending habits of the people around the world, you will notice that we all tend to spend on many of the same types of products and services.
Food, home and transportation continue to be majority of the expenses (of the total expenditure) for people living in countries including USA, India, China etc.
To be more accurate, the majority of expenditures are in the following categories:
Imagine if the costs of every single item on the list above drops significantly, and becomes nil altogether one day. This is possible.
Here are a few examples of how technology has made a lot of products and services that we use almost free-
- Photography- Traditional photography used to be expensive, and one had to be picky with the no. of photographs they shot. However, today you can take as many HD photos with a DLSR camera for free. ‘
- Entertainment Media- The majority of video and audio media in the yesteryears was stored in magnetic tapes. However, today you can stream videos and music on the Internet for free.
- Phone Calls- Thanks to the widespread use of Internet, today you can talk to your friends and family who are miles away for free with the help of VOIP software like Skype of Whatsapp.
Today, people are able to use tools and services for free on their smartphones that would have cost them hundreds of thousands of rupees, years ago.
Let's see how the aforementioned 7 major expenses will be affected by technology in the future:
Education is already demonetized in several respects, as a majority of courses are available online, for free.
All across the globe several universities and governmental organizations are providing free access to volumes of information that people spend a lot of money for in schools and colleges.
Apart from the standard courses that are available, technologies such as AI will also be able to offer free teaching to the students in the near future.
According to USDA, Economic Research Service, Food Expenditure Series, food has already become 13 times cheaper in the course of a century, and it will keep on getting cheaper and cheaper, if the trend is of any indication.
The primary reason behind high costs of real estate is location. This is the reason why houses are super expensive in popular cities like New Delhi, Mumbai, etc.
People are willing to pay whatever amount for locations that offer best jobs and best entertainment. However, since majority of jobs will be available for remote locations in the future, as virtual offices will become a norm, the costs of real estate will plummet.
Entertainment is already free for a good part. There are countless youtube videos to watch, music files to listen to, and even thousands of games to play for free on the web. The only contingency is a digital device and an Internet connection.
Companies like Uber, Sidecar, Carma are making transportation more and more automative. Once the transportation system becomes fully automated the cost of transportation will become extremely low.
As cars will drive on their own, a lot of significant costs will disappear; think car insurance costs, driver salaries, fuel costs, etc.
AI development is already underway, and if experts are to believe then there will come a point in near future when the technology will be able to surpass the best doctors in the world.
Robots will replace surgeons, and medicines will also become cheaper as 3D printers will serve as medicine dispensers. The only cost we will have to bear will be the cost of electricity, which brings us to the next point.
Everybody knows that fossil fuels are not going to last for long, which is why renewable resources, mainly solar power has become a focus of several governments and utility companies.
Today the cost of solar power is about $0.03 kWh. As research is going on to develop cheaper and efficient methods for harnessing the energy, the costs will become nominal in the next 20 years.
Even though today the idea of demonetization sounds too unrealistic, if you think about it for a bit it will start to make sense.
Aren't we already using plenty of tools and services for free just on our smartphones? With mass deployment of robots and AI based devices, it is not hard to picture a world where the cost of living is extremely low.