Published on the 13/09/2016 | Written by Donovan Jackson

Here’s an interesting idea: the cost of living is coming down so rapidly that it might become zero…

Notwithstanding the price of bananas and other goods you might need to make it through the day, there is nevertheless an intriguing argument that the march of technology is making a great many necessities of life cheaper by the day. To the extent, goes the argument, that living might become low-to-no-cost.

After all, robotics, artificial intelligence and increased automation of the sort that kicked off in the Industrial Revolution is reaching such a peak that it has been declared that we are indeed in an age some, among them Klaus Schwab, describe as the Fourth Industrial Revolution.

That argument is put forward by Silicon Valley think tank Singularity University and more specifically, one of its founders Peter Diamandis (the other founder and routine dabbler in the singularity, is Ray Kurzweil who has featured on iStart before).

The singularity, for the uninitiated, is Kurzweil’s hypothesis that the invention of artificial ‘superintelligence’ will abruptly trigger runaway technological growth, resulting in ‘unfathomable changes’ to human civilisation.

The more fathomable possibilities are outlined by Diamandis, who argues that the cost of living is set to plummet in the coming decades (a notion which might fly in the face of the average man’s empty wallet). Even as ‘monetisation’ of ideas, products or technologies occupies the minds of the great and the good in the IT and other industries, there is a concurrent process of demonetisation.

It may not feel like it, but Diamandis has a set of examples to prove just how that is already happening: the smartphone in your pocket forms a focal point for his analysis; by his calculations, that gadget is worth around a million dollars. ‘Twenty years ago, most well-off U.S. citizens owned a camera, a video camera, a CD player, a stereo, a video game console, a cellphone, a watch, an alarm clock, a set of encyclopedias, a world atlas, a Thomas guide, and a whole bunch of other assets that easily add up to more than $900,000.

‘Today, all of these things are free on your smartphone.’

There are plenty of other examples to which Diamandis draws attention; Craigslist demonetised classifieds, iTunes the music industry, Uber and Airbnb and Amazon have cracked at transport, accommodation and bookstores, respectively.

But, it must be noted, the latter examples have stubbornly, to date, failed to result in free transport, accommodation or content. Quite the contrary; they have opened up the market to more operators and competitors, but powered by technology, those competitors are participating in an environment where the fundamentals of earning a profit are still writ large.

Diamandis makes other noteworthy observations, principal among which is that the world is not going to hell in a handbasket. He noted that despite appearances, something as fundamental as food has consistently come down in price over the course of a century – by how much? Thirteen fold. Medicines and healthcare, transport, energy and entertainment: all are dramatically reducing in price.

And here’s a shocker, particularly for the citizens of Auckland or Sydney. Not even the price of housing is immune to the singularity. Diamandis even said housing will become cheaper thanks to technology, specifically autonomous cars and virtual reality, which may make the necessity of proximity to the workplace irrelevant (something the telephone, the internet and even Skype have dented, but not yet made possible – air travel has never seen so many passengers).

Will the cost of living plummet to zero at some point in the future? Prognostications are notoriously unreliable and despite the sound evidence Diamandis presents, it seems unlikely. While technology does make possible the truly remarkable, present day empirical evidence seems to suggest that this particular aspect of the singularity certainly isn’t happening by iteration.

Read ‘Why the Cost of Living Is Poised to Plummet in the Next 20 Years’, by Peter Diamandis.