That will happen for automation and manufactured goods, but not for assets and anything else leveraged. If anything the in-deflation we are seeing today will be amplified as central banks will be forced to keep money cheap to avoid total deflationary collapse. Picture a $5 million starter home that costs <$1000 to completely furnish.
This is what a post-scarcity society in denial looks like.
The reason cities like SF and NYC and London already look like this is because they are the vanguard of the future. If present trends continue a house in rural Kentucky will be as unaffordable relative to average wages as one in SOMA. All that cheap money has to go somewhere, so if labor is deflating it must go into assets.
In-deflation is "deflation of labor and the products of labor, and inflation in assets, consumable resources, and essential services like health care and education." It's been the condition in the USA and to some extent Europe since 2008. It's today's equivalent of stagflation in the 70s, something else economists did not think (at the time) was possible and did not understand. Some are starting to get it, which is why you see some starting to talk about inflation in areas like housing separate from inflation in the rest of the economy. In-deflation is not visible in traditional aggregate inflation indices because deflating manufactured goods and labor are grouped with inflating assets and essential goods/services and the two cancel.
I agree - I've been saying for years that we are getting "Inflation Needs, Deflation Wants". Necessities get more expensive, whereas niceties (from discretionary spending) have their prices squeezed.
It's largely a concept I've encountered online, with varying degrees of precision in discussions. There will be books about it in 20 years once the academics notice, sort of like stagflation (which was "impossible"). It really strikes me as an exact description of today's economic reality -- stagnant wages, deflation in manufactured goods and anything tech, and crazy inflation in areas like housing, rent, health care, and tuition.
So far this has been driven mostly by outsourcing, not automation. When automation really kicks in with good AI, it's game over. There will be universal basic income or blood in the streets.
This is what a post-scarcity society in denial looks like.
The reason cities like SF and NYC and London already look like this is because they are the vanguard of the future. If present trends continue a house in rural Kentucky will be as unaffordable relative to average wages as one in SOMA. All that cheap money has to go somewhere, so if labor is deflating it must go into assets.
In-deflation is "deflation of labor and the products of labor, and inflation in assets, consumable resources, and essential services like health care and education." It's been the condition in the USA and to some extent Europe since 2008. It's today's equivalent of stagflation in the 70s, something else economists did not think (at the time) was possible and did not understand. Some are starting to get it, which is why you see some starting to talk about inflation in areas like housing separate from inflation in the rest of the economy. In-deflation is not visible in traditional aggregate inflation indices because deflating manufactured goods and labor are grouped with inflating assets and essential goods/services and the two cancel.