35 closer in town than was for i dont think were a part of america or thirst for. Hi im max kaiser welcome to the kaiser report Summer Solutions thats right we solve all the worlds problems by bringing in the biggest genius to the way we know that ive ever been on the show and were going to talk about a very scary the word and that of course is the flakes and joining us former tech entrepreneur jeff booth hes the author of the price of tomorrow why deflation is the key to an abundant future this book has caught fire amongst accept a community they Call Community all communities its really a fantastic book stating so jeff but i want to ask you because deflation is usually associated with depression and bad times and nobody likes us but based on the title of your book the key to an abundant future it sounds like youre quite optimistic about deflation so how exactly do you define deflation and how might it lead to abundance transitioning from an inflationary world to what the flexner. People should be scared right there is there is going to be disruption and that destruction is coming no matter what there is nothing fundamental that governments can do to stop the rate of Technology Progress if you just ask about what technology does its close to remove labor right thats why we use it no company ever goes in and builds technology it increases technology so that their costs go out or their market share to sink or they use it to reduce labor and they use it to buy the fund and whats happening is is you have the Work Technology moving in an exponential pace driving driving prices down and governments all around the world are caught in an inflationary trap that they created of them so its out of Monetary Policy fighting against force and i would ask a simple question isnt it good when the value of your money goes up and prices go down but for you personally and so so if we could see that that could be a good thing. And that means we could work less time and the abundance from technology would be broadly distributed instead of being concentrated like it is today i cut something now much i want to focus on a stick ben read your book and ive talked to a couple times and you emphasize that the transition to a deflationary economy i think thats key because we had a deflationary economy back in the 1800s or so under a cult standard which was a very productive era and it worked wonderfully to kape have a check and balance on world trade but then there was a transition to money system or an inflationary system that was a bandaid and kept adding more bandaids onto an underlying structural problem and that was budget deficits and political. Problems and all these were papered over with more money and now were going back to hard money to try to get out of a problems of the paper money so its a transition that that tells us its like the old joke you know if you fall off a cliff and the 1st 1000 feet are no problem its the last foot that kills it right so its that transition to the coming out of this inflationary prices is that my question my question is do we absolutely have to come out of this paper money inflationary period why cant it just go on forever its not going to go on forever no matter what and and in look people in any country say ok we can do this in our country you if you follow this extensively so so if you but if you start with the m. E. Empty crowd or the debt doesnt matter crowd it doesnt matter until it does one giant saying that mass is this tumor or reserve currency goes on forever. And you can just keep printing and people keep trusting your currency and i love to use this thought experiment for that reserve currency the thought experiment isnt. Far from a thought experiment that might be real what if a country lets say china created a currency and decided to keep on printing forever and use that currency and it didnt change in value and they used it to buy the worked about everything all the assets and then they decided ok we have the assets no its default on our currency. Would we trust that currency as they were doing. And and so you can see through that thought experiment that if you just keep on printing money people lose faith in your currency and nobodys going to choose and so you dont have a reserve currency anymore so theres a whole bunch of people like i think are brainwashed in this debt doesnt matter that this can go on forever and and its going to happen gradually im not saying that the u. S. Currency is going to fail tomorrow but it is going to gradually gradually gradually we are already past the point arrest it is going to there is nothing that can stop this rather than we are going to have to flashing for sure because structurally technology requires. The path to get to deflation could end up through hyperinflation 1st im currency d. Fault debt default it could have been a whole bunch of different ways but we are going to have deflation in the end of course its the reserve currency of the us dollar that cannot print and just buy up all the assets we theyve been sent assets and goods and services by the way for just printing out free money but i it did remind me when you were saying that of switzerland which over the past 3 or 4 years has just been printing swiss francs and buying up apple and other corporations so some on the edge can get away with this but what about its so you believe that technology is constantly inventing it were getting to the point where robots ai Virtual Reality all this stuff will displace a lot of workers but how does the money get distributed by how does the Wealth Creation of those robots will those robots decide to keep it for themselves and sell their goods and services to other robots like how do people who used to be workers how do they. Get some of this wealth thats the point they cant in an inflationary environment its in part its impossible and so whats happening is if the concentration of wealth because because youre fighting a Natural Force capitalism cant work right so that so effectively the government is the market today free market free free market principles dont work anymore the government is it becomes the entire market whether its u. B. I. All of these things to try to get people to pay more is more drain more government in both and business which means you stop letting things fail and there is no pricing mechanism and couples thats whats happening today thats actually why and its so hard to comprehend because deflation is a weve never seen that in our lifetimes weve never seen where what if next year everything around you got cheap. What if you purchase a new suit it all it does is it increases the value of your savings and decreases the value of your assets right at the end so as jobs came out of the market the the people wouldnt fall so far actually a follow on on what were talking about right now when government just printing right now why do you think the top 5 companies the Technology Companies are setting historic us why because money is racing to Technology Companies and Companies Need to keep the only way they compete is to remove labor faster so in an in a crazy in a crazy way. Central banks are trapped in the same thing they created and by and by printing more Everybody Knows that thats why the s. And p. Is so far theyre racing into the only thing thats a fair store value it might be overvalued right now but in a relative story going thats why the stock prices of the Technology Companies are raising ever higher because they take labor away faster right i think we can tease out a couple of points here so your point about why wouldnt it be nice to have things cost less next year you know whats all whats bad about deflation so you know the the kind of the counterargument to this is that the reason we havent place in ostensibly is due to the credit cycle and that the ability to borrow money is important to get entrepreneurial projects off the ground for companies to expand for cap ex and so to have the ability and deflation of course that imply that youve got credit contraction so therefore credit becomes harder to come by and you dont have that expansion that associated with a credit cycle and so you would have you know less money in your pocket type theres another is asleep it develops really large cycles in play here but to tease this out a little bit more when you apply what youre saying to the currency itself it starts to make more sense because youre saying that what if the currency were deflationary lets say pickling for example or gold is moderately inflationary its not inflation around the same then you can still have your credit expansion but based on an underlying store of value right so its comes down jeff to actually putting these arguments to money itself right 100 percent 100 percent there is no reason you couldnt predict in a deflationary environment theres no risk its just saving become more valuable and. If im going to take if im going to take my savings and loan those savings to somebody else im going to want to return on my money and im going to need to understand. Lifetime value of that return on my on my money so his money is getting more and more valuable and so i need to have a good return on that set on on that money it just it but the problem is what youre what youre saying is in an inflationary world where weve always led the transition route because if you are allowed to the place and it happened that debt that debt goes up say gets more expensive exponentially more expensive and so governments are trying to stop it and they say they created the mess cent inflation is a central banking phenomena they created the mess Technology Tech technology has moved it used to be demographics china and china doing many facts wrong that it was all diff deflationary inflationary and technology has moved to the number one and wave bigger and is that most its the biggest impact of inflation coming forward and were still looking backwards at. And central bankers like how many people are talking about this how big you make an impact theyre still talking about their historical models and what can happen it doesnt it actually all of this doesnt matter its going to happen anyways because technology is a bigger force in our life fact every single thing that youre using im using this room meeting this Everything Else were celebrating to play ssion in everything we from your phone to to google searches to Everything Else so its just its going to be impossible to stop reading well the book is the price of tomorrow jeff gerth as the author were going to take a break and when we come back pick it up on where exactly is this robot rebellion going stay right there. As the u. S. Economy was booming doing numbers of people will need hundreds. You can work 40 hours d in a week and still not have enough to get housing everybody believes america still is the land of opportunity the reality of those who were not financially quality and the lack of Affordable Housing for a living minimum wage gave many people neutralise the bill thats been a problem with the city and always turn to mix and told me stay away i know mr holton sums up the food that there is no answer because he also requires resources the most vulnerable are abandoned on the streets to become the invisible clerks. No 2 no crowd. No shots. Actually theres a bell to be. Well for a low risk to. Which your thirst for action. Welcome back to the kaiser report Summer Solutions on macs guys wednesday sir but were talking with jeff booth is the author of the price of tomorrow why deflation is the key to an abundant future sounds good well get to that in a minute but i kind of want to pick up on were been talking about just you know the Industrial Revolution and even the 1st part of the information revolution capitalism d kind of has 2 main koester imports now the labor and material but were in the 2nd half of the information revolution now the Network Information revolution and the cost of material is going down to 0 and thats when you see what youre talking about here and deflation is that the basic components of the information economy whether its band with Processing Power or digital storage the costs are all going down to 0 so that puts everything upside down and flips it on its head and then you have this idea what happens to labor then how do you compensate labor if youre mitt basic materials free electrons or free and so then it becomes a tech not for see you have people that can manipulate those free electrons and extract wealth from the masses as we say in the Big Tech Companies google Apple Microsoft facebook they get the users to build their platforms for them and they can scale just add another server and now theyre you know 100 worth a trillion 1. 01 half trillion dollars and so thats a structurally its a structural problem that nobody saw coming what youre saying in your book is. People dont understand this aspect to it because they are thinking backwards theyre thinking about the duster revolution even the information revolution and now but they just dont understand it so and obviously policymakers dont understand it politicians dont understand it. It isnt as if its going to be as if thats going to envelop the economy and were going to look back and to say well we just enact fast enough we never we dont we dont get it i mean i dont see how anyones going to really be able to act in it and be a proactive jap i think are just going to be swept away by this one thing its why i wrote the book because nobodys saying it coming they couldnt put 2. 00 and 2. 00 together in the same exact qualities that theres hearings today about the monopolies. And and and in the hearings in the policymakers have no idea that theyve created the monopolies faster. By by printing money theyre concentrating wealth faster instead of the well if you had a functioning capitalists system without my good with hard money what would happen is as things priced to 0 great entrepreneurs would come in and keep on working right to try to find where theres a marginal return and prices would keep falling and that would mean that the abundance from technology would be broadly shared our time is the most valuable thing then our lives and what weve done to buy it by so by by by staying on this system is weve taken a giant parts of the property lation that are working countless hours to keep up with count it with asset Price Inflation that is this created by central bank bangs and robbed them of their time so theyre spending 4080 hours a week working on a mostly 0 to try to save enough money to buy a house while there are all their real wages are going down in value and houses are running away and price so that they can retire the last 10 years of their life in relative safety. Thats why theyre working so hard right and and and and if you just inverted it and lout Natural Forces to happen our time would be more valuable because the braai if you would if it would necessitate a broad sharing of the technological technological abundance to society thats exactly what would happen but its really hard to see max its really hard to see stacy because it challenges all of our preconceived thoughts right it challenges everything because weve never seen it before lets return to the workers because we have a situation unique at the moment in modern history as well which is the pandemic and the vast majority of the population is at home and theyre actually making more money now 75 percent of workers in america than they did before the pandemic when they actually had to go out and toil and labor so now theyre at home theyre earning more maybe they dont want to return to work because why would you want to sit in traffic jams and go to a horrible Office Building on in some suburb when you can stay home make more money hang out with your family is this like the beginning of what is called the universal basic income u. B. I. That says this saves on the far end of Socialism Communism the the even is a function and nobodys looking at u. B. I. And how do you pay for your. Its magical money overall print more money right so loops back to it loops back to the same problem right the the and the yes people will want to act people will people will demand it because why do those people have all the wealth and we dont and theyre going to demand their politicians to say pay me at home but again it comes back down to. Its not reasonable theres no way to create without destroying your currency there is no way to actually pay for that without it so all of these solutions that people are talking about are more access point more bandaids on a systematic structural change has to take place and and if they can kids and so what were really trying to stop is a revolution right but theyre making the revolution more more likely making war revolution more likely with every step along the way lets look at this in terms of solutions right so when youre describing a situation where the cost materials the guns theyre out and the value added is being created by people are people on social media who are working for free right labors free to giving free hours and then because the technology is free to build out the social media platforms they get a free ride thats why youve got multi 100 billionaires and an emerging peasant class thats why you get this incredible gap opening up in society because of this odd as you point out the book is kind of like a unforseen crack in in reality almost that suddenly the cost of doing business goes to 0 right that would never be considered then we never had negative Interest Rates right this is all everything is brand new they never had a negative oil price its all happening strangely ok so being entrepreneurs like we are theres gotta be a way to. Get in there and figure out how to rectify this theres got to be a solution so heres my solution heres my proposal is that for the Big Tech Companies one area thats possibly we could rebalance us all thing is in the area of intellectual property copyrights and patents over the past 50 years hollywood has its lobby for perpetual copyright used to be limited to 17 years and now its basically lifetime plus 70 years or perpetual copyright they the free stuff in the Public Domain all intellectual property comes from the Public Domain it has a monopoly value of temporaries supposed be temporary and then is supposed to return to the Public Domain but with the current copyright laws in place now that material stays behind a corporate firewall now would it be possible to rebalance this economy by making these corporations actually pay for an optional property rollback ip laws back to 17 years and then it all goes back to the Public Domain thats my proposal ive been saying this for years large lot sick Stanford University but arguing this for decades im sure you know his work would this be a key component to fix this problem i dont think its the right one because its not because a lot of this is so is so youre saying effectively the people that are creating the content on google or they get paid for the content theyre creating right and so forth or that redistributing that way im saying that the corporations would it would remove it would it would bring move a barrier to entry for competition in other words once all that ip returns the Public Domain there will be you know 100. 00 goebbels 100. 00 Different Companies are competing for each other they want to have one company like google which now secondly owns all the Public Domain or disney owns all the stories going back to you know 200 years you know they read. Ads and all the company that stuff goes back in and it creates competition it creates new companies and that would be a boost and i think so let me let me use go talk about in my book extensively and what creates the value in google its actually Pretty Simple what why its free its the same for every 2nd tech monopoly right now what it creates the value as a free service aggregate supply and why supply aggregates there is because they make more money than the former channel. And once they aggregate its all of supply its not its not technology thats the wind its the ai that sitting in the middle of choosing that supply you will never as a consumer go to page 452 and do you could all the supply in the world they have to index 130. 00 trillion websites and you would get you wouldnt go there so its a competition of supply it funny enough in a free market economy that is racing to try to find value. And thats what thats what creates the value is the Network Effect of that. So changing copyright laws doesnt protect that in fact that makes the point of why we have to allow deflation to happen because it wouldnt concentrate is great if you allow deflation to happen that would be the that would be the thing because there wouldnt be as much money in the giant monopolies to be able to do it the people wouldnt reduce price all the way along lets talk about a Global Deflation and a depression or sort of fashion should we have a global war on the 4th rate because ive noticed that there is an escalation a very sharp escalation in tensions with china that seem to coincide with them having his son the United States suddenly realizing that they dominate in high tech whether its 5 g. Artificial intelligence Virtual Reality that they rule that walled and therefore the future is is america like allow this deflationary future that maybe china and chinese corporations my control thats the real geopolitical fight right now thats going on right underneath that knows us that we dont know there is no if in us im going to go be pretty cold here there is no way the government is going to break up google makes facebook the rest because if they do they see the ai skeery already china. And thats the real us and if they so so so in a communist get government and some to manage their government theyre collecting all the state of the the ai capabilities of china whats happening there ive seen firsthand ive seen some of whats whats happening there i know some of the city c. E. O. s there whats happening there is mind boggling how fast its moving because its because its aggregating data on mass and they dont have to ask anybodys permission. Right and so breaking up the monopolies and in the u. S. Effectively seize control of ai to try and sell unlike the ninetys here in 20 twentieths we have a i and youre saying that all those trends that weve seen now for 30 years to our cost going to 0 ad Artificial Intelligence to the max and it becomes a whole nother layer of interesting economic herself in particular with china because for example there are discussions about their app called tic tac tick tock excuse me and so tick tock apparently a spying allegedly spying on users and accumulating data and then it goes into an ai machine and then if theyre able to exploit that to gain market share to gain intelligence to game psychological intelligence right because values people are wedded to their phones in a psychological way and they are being nudged or psychologically influenced to behave in certain ways which could be very handy you know if youre trying to compete right you just nailed it max that is the same and its going on around us. Its its a feature of the system not a bug that it finds things that we want. Right and so we were being we were being nudged on on some of these with the realization that its changing our minds. And then its actually changing our minds and then we see it and were arguing that somethings been changed our minds from a kind of a Central Power and so on so i totally agree all right got to cut it off there thanks a lot better now because reports are solutions thank you very much and thats going to do it for this edition of kaiser reports on resolutions of backs and say if you want to thank jeff both things the author of this new book the price of tomorrow why the if life is the key to an abundant future if you want to catch us on twitter oh my gosh youre being influenced its kaiser report until next time. The sudden fullest and illegal takeover of the government by a small group. Rather than revolutionaries also just good that small group the corporations when you have a tiny drip of people who have all the power you have to have some means to make sure the rest of us dont get together into the back. Alleys or sacrifice some. Places that capitalism exploited and destroyed for profit and left behind misery poverty environmental devastation and so you see things like Voter Suppression building more prisons you seem gerrymandering all sorts of undemocratic practices were well inside that world were well into the world and theres no question that the coup detat. Releases to freelancers working for our. Agency who were detained while covering the disputed president ial election also the Us Democratic president ial candidate joe biden choice of running mate doesnt go down well with black lives matter activists having previously served as californias top cop and more than half of all schools are declared nonfunctional following last weeks deadly blast installations scramble to send help r. T. Follows a russian Surgical Team assisting lebanese doctors with treating the most seriously wounded