Upon hearing and reading several highly positive comments about the book and also listening to a few interviews featuring the author Jeff Booth, I felt compelled to get hands on the book and read it myself. I found the thoughts that are put forward in it quite interesting and hence felt prompted to write a review.  

The Author

Jeff Booth is a Canadian entrepreneur, mostly known for founding BuildDirect, a company that aims at bringing technology into the building industry. He has been playing a role in many technology companies and also provides personal experiences throughout the book which help to frame the views and ideas, providing the reader with some interesting insights. 

Content

In the beginning he lays out his view about the state of our economy and makes the argument that our economic system is based on ideas that might have worked well in the past but are not adequate for our modern time. In particular the fear of a deflationary economy and the unanimous political goal of pursuing a 2% inflation target. He argues that this pursuit of inflation has the consequence of persistently rising prices in all aspects of our lifes and thereby keeping us in an inescapable “hamster wheel”. However, according to Booth, these price rises are artificially fueled and driven by a boundless increase in debt and credit – and are in a fundamental contrast to what is actually happening underneath: Exponential technological improvements which completely change the way businesses operate and the way we might live. In other words, an economic development that is massively deflationary.

He then goes on describing his deflationary thesis by explaining how technological change is evolving exponentially and why it is easy to underestimate the speed and implications it brings. This is demonstrated by developments in several technology sectors, such as self-driving cars, virtual or augmented reality and 3D printing. Technologies that are already here and through continuous improvements might completely change many things that we take for granted today.

Additionally, a lot of costs and limiting factors today are related to energy, hence, exponential developments of energy technologies – especially making better use of sunlight – combined with capabilities of using energy more efficiently might bring the costs of energy down to almost zero, and thereby adding another incredibly deflationary factor. Moreover, the implications of clean and low cost energy would enable us to fight many of the problems our world is facing today, such as the environment or the production of clean water. 

The final deflationary factor described in the book is the development that occurred in artificial intelligence and the enormous implications a continuation of this development is about to bring upon us. Due to the fact that narrow AI (when it comes to specific domains such as playing a game like chess or Go) has already surpassed human intelligence, thus enabling improvements in processes-efficiencies and performing tasks previously requiringing human labor and, on the other hand, creating the demand for new jobs. Therefore, it already has many impacts that are at present happening around us. However, considering the current speed at which the development is happening and how those improvements feed on themselves, it might not be too far stretched to imagine a world in which broad AI (learning from various fields and combining the knowledge) might also outpace us. Such a world, in which less jobs are required and jobs are a function of intelligence – and AI beat us in intelligence. In such a world it becomes tremendously important who has control over such intelligence. Booth argues that since our current economy is designed around jobs, this will inevitably lead to social disruption and a rise of division and polarization – if we cannot face the fundamental issue (an intensely deflationary world). He then poses the crucial question:

“Can we – without our machines – learn how to solve it in time? Can we step forward and accept a new era of abundance?”

The last chapters of the book deal with this question. First, it lays out how humans have a general demand for belonging which can lead to cooperation, but also divide us into hostile groups. Following, human needs and desires are introduced as the basic fundamentals we need to look at in order to see how incentive structures can be aligned to achieving our goals as a society. Furthermore, it is explored how game theory plays an important role in human interaction and how cooperative behaviour over time has proven to win over egoistic behavior. Since our current political system – in various ways – interferes with the natural incentive structures of a free market, which has enabled us to corporate and prosper in the past, it becomes increasingly obvious that the way our current financial system works, in printing money and thereby artificially picking winners and losers, leads to a rise of extremism. 

He concludes that thanks to the deflationary tendencies playing out many things will become seemingly abundant and therefore make it more likely than we might think to adjust incentive structures in the right way to reap the fruits of an abundant future. 

Jeff Booth finishes the book with “A Call to Action” in which he first describes the possible continuation of a system based on depth and credit that is unsustainable and can only go on with a) central banks keeping increasing the money printing, or b) higher taxes and massive wealth transfers. He proposes that instead of going down this path of “growth at any costs”, which can only end in bad outcomes, we should rather embrace the natural order of things – hence a deflationary world. Since both solutions rely on the government function to set monetary policies, this requires us to withdraw the trust in such a system. As more people are withdrawing their trust, this will enable and encourage the thoughts of alternative systems – such as Bitcoin – on which a future world can be based on.

My Thoughts:

I enjoyed reading the book!

The fundamental thesis is that we live in a deflationary world and embracing this fact – instead of fighting it – will put us on the path of an abundant future. A world in which we would need to work less while having more opportunities at disposal to enjoy our lives. This is a very encouraging outlook. It also opened my eyes to some aspects that I haven’t thought of and I somewhat changed my view about how impactful the deflationary trend might be. 

I especially liked the part in which he talked about incentive structures and how the Octalysis framework, which is based on the belief that some motivational forces are hardwired in our brains, might help us to crystallize 8 basic motivational incentives. Therefore, it might enable companies to implement incentive structures in their business to improve the operation. I had never heard of it before, but reading those 8 incentive forces, it makes a lot of sense to me.

In general, I totally agree with his views about the problems, that the political interference in the market has destroyed the natural incentive structure of a pure capitalist system and that our current financial system is unsustainable and continuing on a path of continuingly increasing debts has to end badly. In addition, I think he does a really great job at describing how our needs and preferences play together with incentives and how considerations about game theory can show us how the incentive structures can naturally be aligned in a favorable way. Moreover, I also agree with Bitcoin being a viable solution as a starting point to build a more honest and fair global financial system. In fact, I think it is the greatest invention since the internet and probably the best opportunity we have for improving life on earth.

Where I take a different – maybe slightly less optimistic – view is when it comes to the extent of exponential improvement potential and on our capability to voluntarily change the path we are on as a society:

I believe that while technologies are having a deflationary force, they might not be as exponential as is assumed in the book. I think it might be more S-curve shaped and that we might approach the higher end of the curve more quickly than is presumed in the book. For instance, I have a hard time believing in a nearly free and abundant source of clean energy. I think we can make a lot of incremental improvements – partially also through Bitcoin mining incentives – but an exponential development is hard for me to comprehend. Although, of course I wouldn’t mind being wrong. Likewise, I am also doubtful of the maximal potential of AI, I am not sure if broad AI comparable to the capabilities of a human mind is possible. In this case I hope to be right. 

Based on me being less convinced of abundance being close, I also can’t see the society changing incentive structures so quickly, I think people in power will not easily be willing to give it up and let people make their own choices (leading to natural incentive structures). And only a few people seem to engage in the required critical thinking that would be a precondition to really change it from bottom-up (that became painfully obvious to me throughout Covid-19). I am super uncertain on all the possibilities that might play out in the near future, I see so many different scenarios. 

Generally, my view is short-term pessimistic, but long-term optimistic!

Conclusion

The Price of Tomorrow is captivatingly written and it is definitely a book that makes you rethink a lot of the premises of thoughts that most people hold concerning how the future is about to change. The key takeaway from the book is that we need to change in order to adapt to new givens in which increased deflationary forces lead to more abundance in a positive sense, reducing the incentive to cheat or beqqatray and therefore drastically improve our quality of life.  

I highly recommend it to everyone who is interested in provoking thoughts about where we as a society are headed and how we may have an influence in shaping our future life on this planet.