We are about to embark upon something that few have imagined. To most, especially in the economics field, this is a shift that is going to catch them off guard. Anyone who studied economics and understand the present world we live in, not the theory, realizes this is a dying discipline.
Traditional economics has as much relevance as the DVD or CD. It is from a bygone period.
The underlying premise of our present economic system is the idea of scarcity. In a physical world, this makes sense. However, as we delve further into one based upon automation, computerization, and tokenization, we see an entirely new platform emerging.
A few years ago I started writing about and doing videos pertaining to the "Age of Abundance". We are quickly moving into this arena. Because of this, entire industries, along with much of the economics field, are going to implode.
They simply are not set up to deal with abundance.
$1.9 Trillion In Fees
We discussed this some time back.
The global payment system produces $1.9 trillion per year in fees. In other words, companies and individuals pay almost $2 trillion to send money around the world. The major beneficiaries of this are the intermediaries. For simplicity, we will just call them banks.
Of course, they are not the only culpits. We see others looking to enter the space. One of the PayPal mafia, Elon Musk, is looking to add payments to Twitter. Within 5 years, he wants to be generating a billion per year in revenue from payments.
Now, let me ask this: do you think that billion dollars in better off in the hands of regular people or a mega corporation like Twitter?
Going back to the first number, how much more productive would the world be if that $1.9 trillion was in the accounts of individuals and businesses?
Here is where the existing system stiffles the potential. Cryptocurrency is entering the picture to disrupt this idea.
Of course, the fees on blockchain are suppose to be much lower than what the traditional financial intermediaries charge. However, as we saw, on Bitcoin and Ethereum they can be pretty steep.
This is where a solution like Hive can be of benefit. We have the ability to send money with zero direct transaction fees. On that blockchain, moving money around is an investment, not an expense.
The Digital Expansion
We are rapidly moving to a world where software is going to eat everything. This is hard to see now but it is accelerating.
Blockchain, with its decentralized nature, is a power tool. We are going to see the cloud industry disrupted over the next few decades. As these networks expand, the capabilities of them, both at the base and second layers, grows exponentially.
For those who are fans of the Metaverse, here is another concept that is leading us to the blending of the digital and physical worlds. When we see the expansion of VR/AR, we will be operating in both simultaneously.
This becomes important when we consider the exponential growth that exists with computing. For example, how big is the Internet? Nobody can really answer this since we are dealing with tens of billions of nodes. By the end of this decade, we might have a trillion nodes connected.
When we couple this with all the automation of software, plus some AI, we can see how this carries an enormous financial impact. What is the limit to economic output once automation enters the picture?
The answer is we are only limited by the production capability of the mechanism that increases the output. In this instances, if we want to increase the overall size, we just add more computers (and powerful ones). The same is true for robots. Wnat to double production, simply double the number of robots working in that area.
This is why we saw the manufacturing numbers explode over the last few decades. More of our production is automated.
Another example is the stock market. Volumes shot through the roof as trading programs account for more than 80% of all transactions. People are not even involved in the process. It is all machines.
Again, if we want to increase this significatly, just add more machines.
Post Monetary Society
Could we be heading to a post monetary society? This is something that we will cover in another article.
However, when the usual inputs into productivity are so warped, as we are seeing, then things move to a completely new realm. One of the biggest factors is the continued disruption of labor. As we alter this part of any economic equation, the upper limits are raised. We see this throughout the world.
The idea that physical items are going to be abundant is hard to imagine. Yet, just like with music and video, we end up with more than we can consume in 10,000 lifestimes. This is the power of digitization.
What happens when many aspects of life are like this. Energy is rapidlly moving in this direction. It is safe to say, with the progress made, this will be a reality in the next 20 or 30 years (not today as Europe is finding out). What happens when the energetic input costs into production is near zero? Couple that with a similar number on "labor" and we can see how deflationary pressures are going to overwhelm the system.
Our present field of economics is not designed to even comprehend this. None of this fits into the existing models. It is why economists are so down on cryptocurrency. Nothing about it can be connected to what they developed.
It is an entire new world we are heading towards. This is one where abundance, not scarcity, reigns supreme.
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