A friend and I were chatting about the future and he included this fascinating tidbit:
A few days ago I saw a video of Optimus laying floor tiles. It was still kind of clunky and the setup was clearly [not] perfect - but this is right around the corner even if it's 10 years.
So the obvious thing is there will be serious deflation in goods and labor. One Optimus would be able to pay for itself in weeks. They'll be operating the factories and doing all the manual labor and riding around in the excavators. I have no idea what that means for jobs, but potentially the abundance it brings about will be extraordinary. So labor becomes dirt cheap. Goods become dirt cheap. What is still scarce and therefore goes way up in value? What do you think about prime real estate? There is only so much beach real estate. Demographics are declining but not here on the east coast relative to immigration. And the main downside of real estate is the cost and time of upkeep. If you had an Optimus to clean your VRBO and replace the plumbing when it broke, wouldn't real estate become even more valuable?
And I was like: yeah.
But also: how wild is this? Here we are extrapolating future trends from a new robot doing some stuff. Have we always attempted divination like this? I mean what did the same conversation look like in 1890? Maybe something like this:
So I was checking out Edison's new phonograph machine yesterday - it was literally recording and playing back someone's voice. It's still pretty clunky and obviously not perfect yet, but this kind of automation is right around the corner, even if it takes 10 years.
So communication gets super cheap. And labor gets super cheap. Manufacturing is already getting super cheap. But here's what's really exciting - entertainment and experiences are about to explode. Look at what Barnum's doing with his shows. When people have cheaper goods and more leisure time, they want experiences. And with Edison's moving pictures? Imagine charging a nickel to hundreds of people at once to watch the same show!
Then there's branded consumer goods. Everyone can make soap, but Procter & Gamble is building this thing called 'brand loyalty.' When manufacturing gets cheap, the trust people have in your name becomes worth more than the factory itself. Same with Coca-Cola - it's just flavored water, but people ask for it by name!
And here's another one - packaged ready-to-eat foods. With all these people moving to cities and working in factories, no one has time to cook from scratch anymore. Heinz isn't just selling ketchup, he's selling convenience. Same with these new breakfast cereals Kellogg's working on. When basic manufacturing gets cheap, you can make a fortune by saving people time.
Oh, and you should see what these Sears Roebuck guys are doing with mail order. When goods get cheap enough, the real money is in figuring out new ways to get them to people. They're basically inventing a whole new way to shop. And these new department stores like Macy's aren't just selling stuff - they're selling an entire shopping experience.
And what about in the Luddite-era England of the 1810s?
So I was watching one of these new automated weaving frames at work - like the ones they've got running at the Cartwright factory. It's still pretty janky and obviously they're still figuring out the setup, but this kind of automation is right around the corner, even if it takes 10 years.
So labor gets super cheap. Textiles get super cheap. What stays scarce and therefore gets more valuable? What do you think about prime agricultural land? Like, there's only so much good soil in England, and these new farming methods like crop rotation are making each acre way more valuable. Plus with the Corn Laws, grain prices aren't going anywhere. And check this out - while everyone's freaking out about machines, smart money is piling into government bonds. Napoleon isn't going to defeat himself, and someone's got to fund these wars. The government's paying what, 5% interest? In a world where everything else is getting cheaper, that's basically free money. And unlike these new factories that might be obsolete in a decade, the British government is going to be paying interest long after we're dead.
Those aren't bad guesses, but they're also so far off that it's not even practical to say how they're off. The bigger point is that technology has been a driving force in our world for a couple hundred years in an all-encompassing sort of way. And we've been worried about things like deflation driven by change the whole time.
The 1950s are out and the new hip time to be nostalgic about is the 90s. It was pre-cell phones, everyone loved Bill Clinton, and the economy was thriving. But Matt Yglesias pointed out that they weren't really all that: we're totally kidding ourselves. We picture everyone living in Home Alone mansions and jetting off to Paris for Christmas, but that wasn't real life. It is far more affordable today for more people to travel internationally, or go to restaurants, or call their family across the country than it ever was in the 90s. We've got more money and we're healthier too.
2024 is just better. By nearly any metric. Period.
It's not just happy, older, more wealthy homeowners that are traveling internationally more often, it's the young, single, indebted college graduates sharing in this lifestyle inflation. This sort of thing makes us older folk frustrated when the younger set complain about their inability to buy a house because it costs too much. Yes, it costs more. But also your expectations for life are higher.
Which is good, actually! The more people we have looking to get the most out of life, the better for the whole world. And technology is driving all of those possibilities. And there is so much of it! Just imagine trying to explain some of what passes as normal now to people from a different time. Even something very narrow that doesn't much affect the physical world, like GitHub or even just git
. It's just amazing.
Back to the original point: I have no idea what the world will be like in 10 years. Nobody does. Someone in 1950 might have been able to extrapolate a few decades out but would give up after 30 or 40 years. The world has accelerated now and the uncertainty of the future is much closer than ever before.
One idea around Gentleman Farmers was an attempt to explore the change brought about by ideas like abundance and deflation. How does the world change when you can, to quote Marx again, "hunt in the morning, fish in the afternoon, rear cattle in the evening, criticise after dinner, without ever becoming hunter, fisherman, herdsman or critic." What do you value?
But that's exactly why my friend's question is so perfect: what stays scarce? I thought of this as a way to pinpoint an investment thesis. What remains valuable when everything else gets cheap and easy? What are the things that technology can't touch, that automation can't replace, that AI can't replicate?
The Luddites might have thought it was farmland. The Victorians could have bet on entertainment or brand. We might think it's beachfront property. But underneath all of that, there are some things that have always been scarce and always will be:
Human connection
Wonder
Time
Silence
Land (not just beachfront)
Trust
Forgiveness
Hope
Commodities
Wisdom
Focus
Wilderness
Human service
Youth
Provenance
Brain bandwidth
Good sex
Firsts
Presence
Faith
Fertility
Respect
Dark skies
Surprise
Love
If there are priorities to focus on in life, they'll be found on this list - because they're the things that stay precious no matter how much everything else changes.
I gave Claude a try at describing Github to someone from the 1970s..
Okay, so you know your mainframe? No no, keep thinking about that, but imagine it's... smaller. Like, way smaller. No, smaller than that. No, even smaller- look, just imagine your whole mainframe fits on a desk. Yes, I know that's ridiculous, just work with me here.
*adjusts bell-bottom pants nervously*
So you've got all these tiny mainframes, right? And they're all connected together, kind of like ARPANET but... bigger. Like, EVERYWHERE bigger. No, not just universities and military- look, imagine if like, your grandmother had ARPANET in her house. I know, I know, why would- just... bear with me.
And instead of storing your code on tape reels, you store it in this... um... well it's kind of like a tree structure, but in the cloud- no, wait, forget I said cloud, that's not going to make sense for another 30 years.
*fidgets with massive collar*
You know how you keep your source code organized in card decks? Okay, imagine if every single programmer in the world could have a copy of your card deck instantly. No, not by mail. And they could all make changes to it at the same time and somehow it all just... works out?
And there's this thing called 'forking' which- no, it has nothing to do with your FORK subroutine in FORTRAN... And we have this mascot that's an octopus mixed with a cat... you know what, never mind that part.
*wipes sweat with wide paisley tie*
Look, just imagine if your entire program library was managed by a magical time-traveling secretary who- No, that's making it worse. Let me start over...
Wait, where are you going? I haven't even gotten to explain what a 'pull request' is! Hey, at least it's not as crazy as that 'mouse' thing Doug Engelbart was talking about, right? ...Right?