"Technology Is Deflationary"

"...inflation is only oxygen for debtors barely able to service their debt and those who profits from debt, i.e. bankers and financiers.

For everyone earning a wage or salary, inflation is the equivalent of death by a thousand cuts and deflation is the elixir of life.

When prices decline, our money goes further, i.e. our purchasing power increases.

Only bankers, governments and other parasites that live off the carrion of debt fear deflation and try to destroy the purchasing power of wages...

...When state-protected cartels rule the roost, costs go up no matter how much new technology is introduced. State-protected monopolies (sickcare, higher education, etc.) can suppress disruptive technologies, at least for a while, until their bloated, high-cost, diminishing-return structure collapses under its own weight.

...technology eliminates costly human labor. In the late 19th century, roughly 50% of the labor force worked on farms. Today, the number is 2% of the workforce.

At the turn of the 19th century, the largest category of employment was domestic help. The rise of electrical appliances and machines of convenience eliminated much of the need for domestic labor.

The next sector to undergo large-scale destruction of jobs was manufacturing. The process of replacing human labor with robots and software automation in factories is still underway.

Advances in software are now eliminating white-collar office jobs and retail employment.

...self-employed information workers can now produce output and manage services that required three to five people a mere 25 years ago.

...As technology eliminates millions of jobs by replacing human labor, wages decline and the percentage of national income that goes to labor also declines. This means there is less money for consumption, pressuring prices of consumer goods. This is broadly deflationary.

...The wholesale elimination of white-collar labor has barely started.

...A few years ago everyone needed a landline telephone, a separate phone line for a modem, a television, a DVD player, a mobile phone, a stereo system and a laptop computer. Now all anyone under the age of 30 needs is a smart-phone and perhaps a cheap laptop or tablet.

...people can get rid of cable or satellite and watch most programming via the web.

...As competition drives prices down, profits erode. This is why the ideal set-up for profits has always been monopoly. But technology has a way of disrupting monopolies.

...Transparency is anathema to cartels, which is why the actual cost of healthcare is obscured by providers desperate to avoid competition. But the web is introducing transparency and that alone is disrupting and creatively destroying profits based on information asymmetry.

...Profits go down as creative destruction takes down profitable rentier skims, cartels and bloated, inefficient industries.

...Technology, like Nature itself, has no emotional stake in what is creatively destroyed. Technology had no attachment to lamplighters or buggy-whip manufacturers, and it has no attachment to the Fed, sickcare, higher education, manufacturing or the state itself, all of which are being remorselessly disrupted.

As Bob Dylan put it, he not busy being born is busy dying.

That is equally true for enterprises, industries and institutions."

http://charleshughsmith.blogspot.com/2014/04/sorry-fed-inflationistas-technology-is.html