MAX WIETHE: Do you think the social consequences of that printing could come to fruition and
slow down this deflationary cycle because of the social problems that will come to roost
first?
JEFF BOOTH: If you look at the newspapers today, if you look at most of what is in the
news today, it's the social problems that everybody's talking about.
Whether it's Trump on one side, Bernie on the other side, or it's the social consequences
of what we're talking about that are rising and is creating divide in the world like we've
never seen.
Well, we've seen but we've seen that the height of World Wars.
MAX WIETHE: Yeah, but those monopolies that you're talking about that are driving the
technological evolution, which is inherently deflationary what if there's talk about breaking
up these monopolies, and that could slow things down and you get into the power of monopolies
later in the book specifically with regard to AI and how the importance of large data
sets that are always being updated are extremely important and so that in some ways, if the
goal is to achieve some AI superiority, then you almost need these monopolies, and that's
going to slow down that deflationary cycle potentially, if we have these societal issues,
which are clearly rearing their head faster than runaway deflation.
JEFF BOOTH: Let's dig into AI a little bit.
It's one of the things, not the only thing, there's a whole bunch of deflation coming.
Let's take a look at AI as a first principle.
The way we learn is through error correction.
The more you practice, the better you get, through error correction, but we can't see
all of the data sets we have to choose to see certain data sets.
AI as it adds more and more data sets, it's actually the same thing.
It's error correction at scale.
If you talk to, I'm friends with many of them, if you talk to top AI researchers, then somewhere
between five and 20 years, we're going to have general purpose AI that's better than
us at everything.
If every job, five and 20 years, that's not a long time scale.
If every single job is a function of our intelligence, and it's hard not to see that.
If every single job is a function of our intelligence and we're going to have Ais that are more
intelligent than us, how can you logically conclude that there's going to be more jobs
in the future?
That path is going to-- today, economists compare general purpose technologies, AI and
electricity and say, we've been through this before and the policy tools through electrification
worked and yes, there was retraining that needed to happen and everything else but there
no jobs in the future.
I think it's foolish to compare electricity to AI.
Nobody said electricity is going to be smarter than human beings.
Electricity was important breakthrough as electrification created new industries and
everything else, but nobody ever said electricity-- two things.
Electricity wasn't doubling its performance every 18 months and nobody ever said it was
going to be smarter than humans.
I think it's a bad analog.
If you think that the policy tools that worked in the '30s to be able to bridge societies
through that transition will work again in this transition, I think you're not looking
at the first principles of what's happening in technology.
MAX WIETHE: AI is one of them.
Another interesting area of deflationary technology that you get into is energy.
Energy in itself also feeds back into a lot of the other technologies which could be deflationary.
I think it's important that we talk about that as well.
JEFF BOOTH: There is no life on earth without energy.
For years, we didn't see the consequences of the energy and all the jobs of energy.
We dig up all of the energy, not anymore, but most of the energy from plants, animals
that got the energy from the sun before.
That whole job exploration, refining, put it in your car, all of that produced a lot
of jobs, we didn't see the second order consequences of those jobs.
Energy itself is about 9% to 10% of any economy.
The race for lower cost energy is a critical matter in economic.
It's what drove the race for coal.
It's really hard to stop a race for oil, race for all around the world, because if you don't
have lowers cost energy versus your competitor, your economy fails because its core to everything.
We now have solar energy that is on par with the lowest cost energies in the world and
following that same exponential trend of lower and lower costs.
The whole infrastructure of digging things up, refining them, having offsets to the environment
and all the damage that costs in the future will look foolish.
There's still going to be a massive transition time, but today, that has a huge consequence
for if you're adding deflationary net nature of solar one's built, you're not bringing
coal to the solar farm.
A lot of different jobs go away and it adds deflation, it adds to all of the other deflationary
trends that we're seeing.
I just don't see how governments are going to stop it.
At the other side of it, why is it a bad thing?
If you think about the abundance that that could bring you, if you think about the abundance
in your life that that could bring you with lower and lower energy cost, to at some point
potentially being free energy, why is that a bad thing?
MAX WIETHE: I can't personally think of any good reasons but there are some counterarguments
that people would make that new commodities are going to become more important as new
technologies arise and that solar panels and the battery technology, that we're going to
need to store that energy is made up of these different minerals, which we don't mind at
the rates that we're going to need to mind them at.
You'll see the inflation come from other areas.
Yes, oil might be in a secular downtrend and declining in price, but you're going to see
that that price of oil is going to make its way into other commodities.
How do you- - JEFF BOOTH: If you add up all of these exponential technologies that are
moving, we are in a secular downtrend.
If you said today, we have all the jobs of the traditional industry and all the new jobs
of the build out of the new.
I actually see right now, that's today, and that's happening in a number of different
industries.
Tomorrow, it won't look like that.
Once you hit the breaking point of some of these technologies, it'll change dramatically,
and it will drop all of the existing jobs.
I would love to have this debate, but I don't see where the jobs are in the long term that
create net new jobs globally, net new high paying jobs globally.
For our existing economy to work the way around inflation, that would have to happen.