ATOM Award of the Month, January 2018

With the new year, we have a new ATOM AotM.  This is an award for a trend that ought to be easy for anyone to recognize who is at all familiar with Moore's Law-type concepts, yet is greatly overlooked despite quite literally being in front of people's faces for hours a day.  

The most crude and uninformed arguments against accelerating technological progress are either of a "Word processing is no better than in 1993, so Moore's Law no longer matters" or "People can't eat computers, so the progress in their efficiency is useless" nature.  However, the improvements in semiconductor and similar technologies endlessly finds ways into previously low-tech products, which is the most inherent ATOM principle.  

The concept of television has altered cultures across the world more than almost any other technology.  The range of secondary and tertiary economies created around it are vast.  The 1960 set pictured here, for $795, cost 26% of US annual per capita GDP at the time.  The equivalent price today would be $15,000.  Content was received over the air and this was often subject to poor reception.  The weight and volume of the device relative to the area of the screen was high, and the floorspace consumed was substantial.  There were three network channels in the US (while most other countries had no broadcasts at all).  There was no remote control.  

There were slow, incremental improvements in resolution and screen-size-to-unit-weight ratios from the 1960s until around 2003, when one of the first thin television sets was available at the retail level.  It featured a 42" screen, was only 4 inches thick, and cost $8000.  Such a wall-mountable display, despite the high price, was a substantial improvement above the cathode ray tube sets of the time, most of which were too large and heavy to be moved by one person, and consumed a substantial amount of floor space.

But in true ATOM exemplification, this minimally-improving technology suddenly got pulled into rapid, exponential improvement (part of how deflationary technology increased from 0.5% of World GDP in 1999 to 1% in 2008 to 2% in 2017).  Once the flat screen TV was on the market, plasma and LCD displays eventually gave way to LED displays, which are a form of semiconductor and improve at Moore's Law rates. 

Today, even 60-inch sets, a size considered to be extravagant in 2005, are very inexpensive.  Like any other old electronic device, slightly out of date sets are available on Craigslist in abundance (contributing to the Upgrade Paradox).  A functional used set that cost $8000 in 2003 can hardly be sold at all in 2018; the owner is lucky if someone is willing to come and take it for free.    

Since once ATOM-speed improvements assimilate a technology, the improvements never stop, and sets of the near future may be thin enough to be flexible, along with resolutions of 4K, 8K, and beyond.  Sets larger than 240" (20 feet) are similarly declining in price and visible in increasing numbers in commercial use (i.e. Times Square everywhere).  This is hence one of the most visible examples of ATOM disruption, and how cities of today have altered their appearance relative to the recent past.  

(Statista reference link)

This is a large ATOM disruption, as there are still 225 Million new sets sold each year, amounting to $105 Billion/year in sales.  

 

Related :

The Impact of Computing

 

Related ATOM Chapters :

3. Technological Disruption is Pervasive and Deepening.

 

Comments

[Ed Zimmer]

Geoman,
Can we move our discussion over to this page (to get a fresh page).

Kartik,
This a clearly understandable example of the acceleration of technology (& its economic effects). May I use pieces of it on The Economist if I get an opening. (I'll include a link back to this page.)

[Kartik Gada]

Hello Ed,

Yes, permission is granted.

I am thinking of proceeding with the video contest that I had initial envisioned when I published the ATOM. That will help the cause. I will have to do some fundraising and promotion.

[Geoman]

Ed - No worries.

Kartik - one of the really fascinating things about TV was the very earliest version was demonstrated in 1851! Though one might argue it was more of a fax machine than a TV - it was essentially a fully mechanical TV that transmitted images.

TV as we know it first came into being in the 1920s. It remained a curiosity. In 1936 the first plasma displays and flat panel displays were discussed. In 1907 is the first color TV patent. First color transmission was in 1928.

Anyway, the roots of TV reach much more deeply than people realize, and, one might argue, the rapid advancement of TV in the 1950s was a classic sign of technology that was delayed far too long, and had to "explode" simply to catch up to where it should have been in the first place. A rule of the ATOM - the longer advancement is delayed, the faster, and potentially disruptive the transformation will be when it occurs. TV fits this pattern perfectly.

Which begs the question - what other things are poised for rapid expansion? Areas of technology long dormant that will advance very rapidly in the near future? What areas of human endeavor have been stagnant and unchanging for a long time? That is where we should focus our interest - and where the really profound, out of left field, changes will germinate.

A recent example was oil and gas production. Since 2005, people just don't realize how profoundly and permanently the oil markets have been transformed. Looking back, our view of oil markets was incredibly stale - things had stayed the same for a long time, and we assumed they would stay that way into the indefinite future. Or Look at what is happening in the space launch business, after a long stagnant period. TV networks, as we know them now, will be dead in 10 years, along with cable. The boring company is looking at a 10 fold improvement in the rate and costs for boring tunnels.

Going forward, what stagnant areas could change radically? My guess would be:

1) Government.
2) Education.
3) Mining.
4) Power generation and distribution.
5) Trains and rail.

Can anyone else think of any more? Again, we are looking for stagnant areas where rapid advance is possible.

[Kartik Gada]

Geoman,

Anyway, the roots of TV reach much more deeply than people realize, and, one might argue, the rapid advancement of TV in the 1950s was a classic sign of technology that was delayed far too long, and had to "explode" simply to catch up to where it should have been in the first place. A rule of the ATOM - the longer advancement is delayed, the faster, and potentially disruptive the transformation will be when it occurs. TV fits this pattern perfectly.

Oh, outside of the US, this rapid catchup to the trendline was even faster. Note that most 1965-90 immigrants to the US only saw television for the first time upon landing here.

In India, there was no television content to speak of until 1991. China did not allow any US programs until 1997 ('Baywatch' was the first US program allowed in China). Eastern Europe and former Soviet states were similarly restricted.

So if we take this trend at the global level (as we always should), the snapback was even more dramatic.

Which begs the question - what other things are poised for rapid expansion?

I think about that all day long. I come to the conclusion that the following list is where the maximum pressure resides (which is very similar to your list) :

i) Government
ii) Healthcare
iii) Education
iv) Construction
v) Land consumed by US retail real estate (this is mostly a US problem and particularly a California problem).
vi) There are some artificial economies that have been normalized in Western societies but not outside of that, simply due to massive government distortion for political engineering.

Everything other than i) on this list is solely due to i).

The most recent examples of completed disruptions are oil, taxi medallions, and newspapers/magazines.

[Geoman]

Construction is a good one - slow advancement there, but certainly opportunities for massive improvement, especially on large scale construction projects. For v I might call it "land use" and leave it at that. I assume you mean transportation being the proximate cause, specifically, self driving cars?

To some extent I feel the health care industry is already in the early stages of revolution mode, I'm just not sure what form it will take (universal vaccines for example). I've seen some recent, startling information on cancer recently. We are surprisingly close to a universal flue shot.

Farming, especially meat production, is another area poised for massive changes.

[Ed Zimmer]

I agree with Government as #1 in "need" - but do either of you see an impetus other than an economic crisis? My #2 would be education. What's being taught in colleges today are skills that will almost certainly become obsolete in normal career time. My #3 would be construction because of the widespread advances in 3D printing - #4 would be power gen/dist because of advances in battery technology - & #5 would be transportation because of advances in self-driving technologies. I'd drop healthcare below those because of medical regulation drastically slowing the potential advances (& despite urgently needing stem therapy applied to lung repair, I can't argue hard against the need for that regulation).

If an economic crisis is what's required to bring about major government change, the MMTers may be the major influencers. I can see them as best positioned to convince politicians of the meaninglessness of national debt and that government spending is not only safe but the only way out of the crisis. And they might even be able to sell their job guarantee proposal in the process (as much as I feel that would be a disaster).

[Fatcat]

Hi Geoman,
>one of the really fascinating things about TV was the very earliest version was demonstrated in 1851

Can you include a link. I am really curious of what could be achieved with the technology of the time

[Kartik Gada]

Ed Zimmer,

I agree with Government as #1 in "need" - but do either of you see an impetus other than an economic crisis?

No chance without not just a crisis, but an L-shaped crisis. I wrote the entire ATOM in the hopes that central banks and governments around the world can manage a more benign transition to the new fundamentals, but we all know that they won't do anything without a crisis that forces them into it (that too after three or four failed attempts to use old methods).

[Fatcat]

Hi Kartik,
>we all know that they won't do anything without a crisis that forces them into it (that too after three or four failed attempts to use old methods)...

I am afraid that you are so right on this. In fact, all major policy changes were introduced as reaction to some type of crisis or even war

[Stephen murray]

Another possible disruption is the push back against man made climate change. Since at least the 90s MMCC has been a transfer from taxpayers to various environmental groups staffed by other wise unemployable people. The ATOM has allowed the proliferation of alternative media which pokes holes in the MMCC narrative, with everything from clever thought experiments to genuine citizen science.

Considering the economic inefficiencies and dislocations caused by the various tariffs, taxes, and laws associated with MMCC , the restoration to the trend line of economic growth necessitates the removal of the MMCC lobby from the economy, in the same way the ATOM eventually blows through all obstacles.

What has been the economic cost of carbon taxes, which are common in Europe? It must be significant. The cost of corporate "greenwashing", which should be invested into R and D or lower prices?

The Science behind MMCC is largely bogus, and the ATOM is perfect at illustrating that.

[Geoman]

Hey Fatcat - Lots of links - just google "mechanical TV".

http://ethw.org/Mechanical_Television.

From wikipedia:

Facsimile transmission systems for still photographs pioneered methods of mechanical scanning of images in early 19th century. Alexander Bain introduced the facsimile machine in 1843 to 1846. Frederick Bakewell demonstrated a working laboratory version in 1851. The first practical facsimile system, working on telegraph lines, was developed and put into service by Giovanni Caselli from 1856 onward.

[Geoman]

I think, to some extent, our goal is not to change things, but lay the groundwork for the crises when things have to change.

I should say, people are talking about broad categories of change, like government, health care, etc. Perhaps we should be more specific. TV is a very specific invention. So, specific inventions that will change the world, and are likely coming in the next 20 years:

Super-critical carbon dioxide generators (10% more energy from existing heat sources at marginal costs)
Non mechanical drilling technology. (ability to drill faster, deeper, and directionally)
Universal flu shot (how much do we spend each year treating people for flu symptoms?)
Self guided mining equipment (imagine a mine that works 24/7 and is operated by 5 people)

Probably a few more there...these are all what I would call "left field" inventions that will cause remarkable societal changes, and are barely mentioned in the press.

[Kartik Gada]

Stephen Murray,

Yet another problem with MACC pushers is that they express no joy when ATOM disruptions lower CO2 emissions. This exposes their true agenda.

US CO2 emissions per capita are at a 60 year low. The US comprises the vast majority of the total reductions by all countries that have reduced at all. The MACC crowd are suspiciously indifferent to this news, which means they don't actually care about the environment at all.

[Geoman]

Kartik - I've noticed the same thing - the predicted impact of global warming is declining, just as our ability to reduce emissions is accelerating. It is not hard to see, in the near future, the two lines crossing, at least in the U.S. So hurray! The apocalypse has been called off! And for some reason pointing that out makes you a bad person.

Looking at what is already in the pipe - supercritical carbon dioxide generators (imagine eliminating 10% of thermal power plants at no loss of generation capacity); electric cars; storage batteries; better (cheaper) solar panels; fraking (replacing coal with natural gas for a 60% savings in emissions); the LED revolution (we are only 2/3 of the way there).

The problem with climate change, as I see it, is that it represents the perfect unsolvable socio/political/scientific issue:

It is an absurdly complex scientific issue, at the same time seemingly about something simple, like the weather, so everyone feels free to have an opinion.

There is a substantial (and uncertain) time lag between cause and effect.

It feeds into partisan, cultural, and other filters that cause social discounting, obfuscation, or gross exaggeration of the threat.

Mismatches between the scope of the climate change issue and the jurisdiction, focus, and capacity of existing institutions.

A set of hard-wired incentives, career and otherwise, that skew attitudes on the issue.

Personally I would listen to the proponents of global warming more if they proposed solutions that made even the slightest bit of scientific and economic sense. So much of their proposed solutions are simply partisan (or socialist) nonsense, how can I take them seriously on the scope and magnitude of the problem? They are their own worst enemies.

[Kartik Gada]

Geoman,

Personally I would listen to the proponents of global warming more if they proposed solutions that made even the slightest bit of scientific and economic sense. So much of their proposed solutions are simply partisan (or socialist) nonsense, how can I take them seriously on the scope and magnitude of the problem? They are their own worst enemies.

The fact that they are unhappy about the actual progress made by the free market is a dead giveaway. For the US, the issue of emissions is done and dusted.

Their complete silence on problems that indisputably ARE man-made (like plastic in the ocean) reveals even more. Never once do they talk about that issue, while unlike MMCC, is obviously due to humans.

[Geoman]

What separates astronomy from astrology? They both use data and make predictions. They track the stars and astral bodies. But what is the real difference? The difference is that one is falsifiable. Astronomy says planet X should be in position Y at time Z. It is either there or not. Astrology says I will be a warm and loving person this month and will feel lucky.

Like science, pseudoscience bases ideas on observation, but, unlike science, they advance propositions that are not open to the possibility of disproof. It doesn't mean the propositions are wrong, just that they are, by definition, not testable, provable, and therefore, not science. Science often involves revisions to theory, even profound embarrassment.

A pseudoscience, by contrast, is never in danger of embarrassment. Its propositions are designed to have the patina of science, but be immune to all contradictory evidence, because every imaginable state of affairs can somehow be reconciled with them. Climate change, unfortunately, has fallen into this pseudoscience trap. What possible data, what possible result, is not consistent with climate change theory? Warm weather? Cold weather? More rain? Less rain? When both flooding and drought are consistent with your climate theory, perhaps your theory is a little too loose to be called "science", and perhaps, a little humility is in order when discussing possible futures and responses.

And, I must admit, this frustrates me deeply, because, I think the pseudoscience element of climate change is attractive to people because they see being non-falsifiable as a feature, not a bug.

Plastic in the ocean? That is a problem that could be solved. We could determine scientifically either it is or isn't a problem, or generate definitive solutions to solve the problem. Boring!

[Kartik Gada]

Geoman,

You have just described why religions exist, and why new religions (MACC and other types of leftism) emerge for people who have a psychological need for such a belief system without it being described as such.

[Kartik Gada]

Coming back to TV sets :

Note how a desktop PC circa 2000 had a very deep 17" monitor. it was more than a foot deep, and very bulky. It consumed a huge amount of space on the desk. Now, LCD monitors are so inexpensive that people have two or three. A 27" LCD monitor was just $129.99 brand new last I checked. Such a size was itself unheard of just a decade ago. The ATOM has increased precious desk space.

The same goes for TVs. 27" was the biggest tube TV in the 80s. The first flat TVs were 42". Now even 60" TVs are under $1000. Even the fanciest TVs on display in any electronics store are barely over $1000, and don't stay there for long. Contrast that to the $800 set in 1960 (which was a $15,000 purchase in today's terms).

In size, it seems the ceiling of consumer TV size was higher than anyone thought. 60" was seen as too big for anyone when it first came out. Now, 65" and 70" sets are marketed to the mainstream.

[Fatcat]

Hi Kartik,

Definitely there is a huge improvement within TV pricing and features. Some ten years ago I was joking with my friends that at this rate a TV soon would cost less than the TV stand that is required by it. However, we have to compare apples to apples. The TV of good old days had an aspect ratio of 4:3, while the new TVs have 16:9 or even wider. That means that the same diagonal could yield vastly different surfaces while having the same “screen size” metric. For example, a 27 CRT TV has roughly the same height as a 34” wide screen. And of course, the marketing focuses on diagonal. In fact, many new laptops have vertical resolution of 720 pixels, while the old ones used to be 800 within the same pixel size.

[Kartik Gada]

Fatcat,

That is true, but 16:9 vs. 4:3 notwithstanding, the sizes are huge now.

I wonder whether we are past the point of resolution overkill. 4K is the standard now. Then there is 8K. The eye cannot resolve it all, but VR might generate new demand for hi-res. Plus, there is tons of data in higher resolutions, which can attract AI.

[fatcat]

Hi Kartik,
As for the rate of progress, some 10 years ago I was joking with my friends that if the TV prices continue to drop like that soon the tv stand would cost more than the TV itself...

And 10 years have passed. The TV screens are affordable to cheap, yet I barely watch TV. The phone is taking too much time.

[fatcat]

An interesting side effect of this price reduction is that many fast-food joints replace the static menu posters with TVs that are hooked to some media player showing the menus and prices. In fact it becomes cheaper to keep a large-screen as a billboard than to actually pay for printing and labor to introduce a new static advertisement. I am not sure if that results in job destruction but for sure there is a shift…

[Geoman]

What is the end point for TV? I can imagine a world with ultra HD (indistinguishable from realty) custom order TVs of any size (from tiny to football field), that are costed by the square foot, and a few mm think. Ordered on-line and delivered within a week to your door. The arrive in a shipping tube, roll out, and mount wherever you want. Cost won't be much of an issue (the cost differential from big to really big will be fractional), the hard part will be deciding what size is practical for your home. Everyone will own 3-4 of various sizes. They will mount practically anywhere, so you can move them around as you please. Many people will have an extra large one they can take in their backyards for "movie night" or for parties, that can take up a whole wall.

Outdoor TVs will become practical decorations for the exterior of buildings, allowing you to change the apparent color and texture of the building on a whim. Especially at theaters and public venues, where they can provide and continually update all the necessary signage.

Anything else?

[HB]

A TV that beams directly to your brain's optical processing unit, or even bypasses that and communicates directly with your cerebral cortex. It can feel as big as you want, 3D, you will feel you are living in it (if you so choose) and be able to watch an entire series in a few minutes. Or... even stranger things will happen closer to the singularity.

[fatcat]

Geoman,HB,

when we talk post TV we have to keep in focus what we mean by "television". Apparently a cinema theater and projection don't pass the gut feel test. Even though, we can project the TV shows on a wall/screen we usually wouldn't call that a TV. On the other hand, an LCD screen showing prices in McDonalds intuitively is called a TV.

[Geoman]

I think we are talking past each other. The "TV" at McDonald's is just a big computer screen. It doesn't entertain people. It is no different than a big computer monitor.

I'm thinking of TV as physical home device used for entertainment that has internal light sources. I am talking about a roll up television LED screen, not any sort of screen projection.

https://www.express.co.uk/life-style/science-technology/605580/LG-Rolling-Roll-Up-HD-TV-2016

It is already here. It will just get bigger and cheaper going forward. So big and cheap, like I say, you will buy it custom by the square foot. Arrives at your house rolled up in a tube for shipment. Just unroll and stick to any wall.

Big question - when will movie theaters replace the projecting equipment and screens with really big super thin ultra HD TVs? Imagine a world where distribution costs for movies is essentially zero - the day after a movie is completed, it is sent directly to the theaters digitally for a premier on super large HD TVs. At the end of its 3 month run, the movie is erased from the computers at the theater.

Theaters will change to showing more live events - super bowl parties, concerts, whatnot. Probably start serving more food and alcohol. Become a combination of Chuck-e-cheese and a sports bar.

[Kartik Gada]

Geoman,

Big question - when will movie theaters replace the projecting equipment and screens with really big super thin ultra HD TVs?

This will be interesting. However, before that, the commoditization of 72-inch and larger screens will soon see an explosion of commercial use in public spaces (this is finally a size that might be too big for most homes).

When 8-foot (96") screens cost just $2000, we might see all sorts of public spaces resemble Times Square or the Las Vegas strip. This might be unpleasant if it is just all ads all the time, but could be a plus if it shows videos of pleasant things.

When one looks at footage of 1940s America, other than the style of cars and the telephone poles, the cityscape fabric doesn't look very different than today in the sense of technological diffusion. That may soon change.

Side-by-side comparison of 1940s vs. today for specific streets in Los Angeles :

https://www.youtube.com/watch?v=WIHfmisMLOY

As we suspect, 2035 will be more different from today even in this visual comparison than the 1940s were.

[Kartik Gada]

Geoman,

Imagine a world where distribution costs for movies is essentially zero - the day after a movie is completed, it is sent directly to the theaters digitally for a premier on super large HD TVs.

Kindle for the silver screen. It would make sense. Distribution via old-fashioned methods is expensive, and in many countries, brigands are very keen on commandeering the reels. The couriers have even been killed in some instances.

[fatcat]

Kindle for the silver screen. It would make sense. Distribution via old-fashioned methods is expensive, and in many countries, brigands are very keen on commandeering the reels. The couriers have even been killed in some instances.

I think the new IMAX standard has digital projectors which are close. And if the movie size is huge it can be pre-streamed in encrypted form and distribute the keys on the release date.

In fact, netflix could use a similar scheme. Allow storing the movie and stream only the un-encryption keys. That would sidestep the internet speed issues and yet satisfy the copyrightheads

[Geoman]

Fatcat - I like it. the opposite direction is Steven Soderbergh - he shot his latest movie "Unsane" on an iPhone. Not the greatest quality image, but the cost to shoot the film was pennies. He and his actors keep all the money.

the latest big budget movies have not been failing because they didn't make money, but because they didn't make ENOUGH money. When budgets are $350 million, you need $700 million just to break even. What is Soderbergh's breakeven? My guess is distributing via amazon would mean automatic profit. He only needs a few million bucks to make wild profits.

To simply print a movie and get it on 3,000 screens in the U.S. is around $6 million. Multiply that by the number of movies released each year...and the international market...probably $200 million market just making prints of movies and shipping them to theaters.

Kartik - The big TVs on buildings might not be advertising - I can imagine them being simply color and texture. Want a building that has an exterior that looks like elephant skin, complete with breathing motion, fleas, and whatnot? next week it can change to a wooden sailing ship...

[Kartik Gada]

Geoman,

To simply print a movie and get it on 3,000 screens in the U.S. is around $6 million. Multiply that by the number of movies released each year...and the international market...

That is a very good ATOM disruption that causes deflation and job displacement. Just like the Kindle reduced the cost of book distribution by a factor of a million, this is even more effective, since the viewer doesn't see much difference, but the distribution cost to theaters vanishes.

[fatcat]

Hi Kartik,
Just like the Kindle reduced the cost of book distribution by a factor of a million
Ironically the e-book version sometimes cost more than the paperbacks. Even though, the print might be outsourced to china and be probably less than 10% of the book price, depending on the print quality the physical book involves shipping & handling, storage, insurance and all kind of added expenses we have the e-book prices being higher no lower due to the entrenched publishers.

Another ironic thing is that many cinemas deliver worse experience than an average home-theatre setup, a smart tv or media player box with enough disk space can store many 4K movies. He blocking point is the monetizing the copyright / intellectual property and paranoid anti-piracy measures. Having certified piracy-proof boxes is easier done in theaters and pirating from an actual reel is much harder than ripping blue-ray disk. Basically even now cinemas are obsolete. The moment we have 4/8 K VR glasses we could have full immersive movie experience everywhere…

[fatcat]

Since the TV is already at the end of live as we know it , I would split it in 3 different domains which have separate development.
1) Screen/Display
2) TV over-the-air tuner
3) TV pre-recorded programming
4) TV live shows (sports/live shows/etc)
5) Movies

The first TVs were receivers combined the tuner and the screen and the broadcasting was real-time. Movies were separate industry at some point could be projected in front of a TV camera.
Filming an event was expensive and time consuming and was done only for the most important cases.

After the introduction of the TV/video camera recordings TV programming became richer and allowed for time-shifting at the broadcasters-end. The receivers were sill the combined a screen + tuner unit, albeit with better screens and sound.

In 80s we got video players which were pluggable in the antenna port of the TV. They were simulating the broadcast signal.
Some TVs had ports to for non-radio input(RGB; then VGA; and recently HDMI). At this point the TV becomes a monitor, a screen which could receive input without the tuner. The TV could still be a DUMB TV/monitor but there is fork in the technology domains.
HDMI is basically a digital signal, which requires a computer to process it. So all Hi-Def TVs are basically a computer screen + computer and modest TV tuner, which costs at most a few percent of the total TV set.

Then we got smart TVs which upgraded the computer part. I personally find it useless, it is much cheaper and easier to upgrade a media player attached the otherwise good monitor than the whole TV.
And in parallel we have computers with monitors ( smart-phones and tablets are portable computers with convenient form-factor screens which might happen to have cell-phone functionality ) which could play media and are more commonly connected to the internet. There are TV tuner cards that can be plugged in a pc and turn it in TV. They had nicer interface and ability to save and share your channel list.
And suddenly the TV has tiny portion of live broadcasting and most of the programming is recorded and can be available on the internet. Webcasting, web tv, and live streaming are essentially a TV that use IP tunneling instead of radio waves.

Everything has converged yet can be clearly separated in a few branches :

* Screen/sound (I would say a projector is first class citizen here)

* live stream media ( cable TV, over the air TV, other media)
Pre-recorded media

Ironically, the cable TV has the most conservative format which requires special boxes or cable cards . And it slowly becomes displaced by internet protocol. Over the air switched to HD. This switch pushed a lot of people either to cable during the transition period or to other types of media players.

Some people use 4K tvs as super-large PC monitors. Some TVs are used for video conference rooms. Billboards are getting replaced by TV screens (they might not have a tuner)

The TV screens are getting so big that they become impractical. Hard move the in the room, not enough wall space, etc.

The question is will the augmented/virtual reality glasses become ubiquitous before every mall starts looking like times square. The AR/VR is the end-point of the TV technology

[Fatcat]

In the mean time one of the ATOM metrics is the percentage of deflationary prone sectors of the economy. IT-related spendings are projected to be close to 4 T in 2018

https://www.itweb.co.za/content/dgp45vaYjZevX9l8

[Kartik Gada]

Fatcat,

Oh, one of the most important points in the ATOM is how high-tech is converging to a higher and higher share of the economy. It is 2% of World GDP now, and may be 4% by 2025. That is why monetary creation by Central Banks has to rise exponentially, and will only work with diffused more evenly through the DUES.

At the same time, the cost of levying and collecting income tax is higher than anyone thinks, and will soon be unnecessary when the level of QE that has to be done to offset technological deflation exceeds income tax collection minus the cost of income tax.

This is the entire reason that the ATOM recommendations of 0% income tax and exponential stipend via central banks are possible now for the first time, rather than 20 or even 10 years ago.

[fatcat]

Hi Kartik,
the the interesting thing that report shows is that in 2018 the share of the world GDP might be slightly more than 3%. After all if the world GDP is about 105 T, and expenses are are projected to be close to 4T. Even if we estimate the world GDP at 120T it still brings larger than 2% share...
Now the question is how much of that 4T are subject to exponential deflation...

[Kartik Gada]

Hi Fatcat,

World nominal GDP was $80T in 2017. We have to take nominal, not PPP, for this purpose. But does that imply that the percentage is even higher?

Now the question is how much of that 4T are subject to exponential deflation...

I ran the calcuations, and not all of IT spending comprises the fast-deflating technological components. Other components bundled in there include the salaries and benefits of workers, etc.

At the moment, it is still 2%. If it were 3%, then the amount of QE needed would be 50% higher still. I do, however, expect it to be 4% by ~2025.

But yes, these are the right concepts to keep in mind.

[fatcat]

Hi Kartik,
do you think that today's S&P correction is in line with tour prediction of having another recession in the next few months, or do you consider it a normal fluctuation.

https://www.cnbc.com/2018/02/04/us-stocks-interest-rates-futures.html

The VIX has inched up but not much, though

[Kartik Gada]

fatcat,

do you think that today's S&P correction is in line with tour prediction of having another recession in the next few months, or do you consider it a normal fluctuation

It could certainly be the start of it. But previous downturns took 18 and 30 months respectively from top to bottom.

The VIX has inched up but not much, though

^vix has tripled in two sessions. But it is still 'only' 37. The highest ^vix of the recession could be 60+.

[Geoman]

In the old days, when too much money was in the economy, you would have inflation. Why? because too much money was chasing after insufficient goods and services, causing prices to increase.

Now, what if most people have sufficient goods and services? What I mean is, if I have enough to satisfy my needs - more money doesn't give me tremendous desire to run out and buy more stuff. I can only consume so much. Also, technology is keeping prices low anyway. Even buy a new TV is a minor expense these days.

What happens instead is money chases after ROI. Interest rates drop, making bonds and bank accounts worthless. The money flows to assets like stocks and real estate. Prices shoot up.

Isn't that what we are seeing? Stocks are up, along with land prices, while interest rates and bonds are low. But we still have low inflation. It suggests that there is plenty of money, but no huge demand for new goods and services (market saturation), ergo the money is invested in real assets - property and stocks.

At the end of the property and stock bubble there is a collapse. But the value isn't lost, just transferred from one large group to another. And the cycle starts again. All this capital sloshing around with no where to go.

In a land of infinite plenty, what do we do with money?

If we all got a DUES check, many would spend it. But many would try to save and invest it. But...in what? Not bonds or banks. It would be in stocks and real estate. The only thing left for the money to chase is ROI. Or alternately - you can never have too much health or education. Maybe that explains the inflation there?

I guess there is an underlying danger to the system - everything gets so cheap, that all investments slowly become worthless.

[Geoman]

By the way, an obvious nomination for next month's award - SpaceX.
The success of the Falcon heavy was directly related to the power of computing.

It has always been much more efficient and cheaper to build a rocket with lots of little engines rather than a few big engines. Little engines are "human sized" easier to move, handle, assemble. Cheaper to build, with less force on the components. Also more failure resistant - one engine could go down and still make orbit.

So why did NASA and the Soviets for so long build massive engines?
Because controlling the thrust of a lot of engines, getting everything perfectly balanced, was impossible.

Musk thought the Falcon heavy would likely fail. But why? I mean, his Falcon rockets work just fine, and this is, more or less, just 3 of them strapped together. He thought that because no one had ever gotten 27 small engines in three boosters to work before. The soviets have 20 in the soyuz (single booster), and managed to get that to work. But their moon rocket (N1 had 30 engines!) kept blowing up.

The unsolvable one was Pogo-ing - slight variation in thrust from one of the engines. Once it starts, it's very hard to correct, as the variable acceleration leads to variable fuel pump pressures, which leads to more variables acceleration, and so on and so on until eventually you match the vehicle's resonance frequency and vibrate the whole thing to bits.

This is the reason the Saturn 5 had just 5 engines. The Delta IV heavy? Just 3. A few big engines are reliable, but expensive. Generations of aerospace engineers just assumed that too many engines make for too many unsolvable problems.

Naturally Musk, being a computer guy, realized that more engines were not necessarily a problem if you had super small, reliable, fast computers, good sensors, and good controls. You could simply adjust rapidly to dampen down any pogo-ing and prevent failure. So his Falcon 9 had 9 engines, and the Falcon heavy had 27. And he has reaped the cost savings of smaller engines.

And really, with the success of 27 engines, what is the limit now? Musk has talked about having 45 engines firing at once....on a BFR rocket....

[Fatcat]

Hi Geoman,

If we all got a DUES check, many would spend it. But many would try to save and invest it. But...in what? Not bonds or banks. It would be in stocks and real estate. The only thing left for the money to chase is ROI. Or alternately - you can never have too much health or education. Maybe that explains the inflation there?

I guess there is an underlying danger to the system - everything gets so cheap, that all investments slowly become worthless.

If there's a deflationary or near zero inflation bonds are a good investment. After all bonds are but an instrument to raise money. Same as stocks but with different structure and voting rights.

And while some things might become effectively free we still will have some things that are limited.
Now entrainement is cheap, you can find so much content Which is free and perfectly legal, even without gonig trough shady or piratish venues.

And yet the Hollywood movies don't suffer from poor box office sales.

There aree limited seats on a live concert, limited waterfront properties, etc

[Kartik Gada]

I am completely unworried about 'what people will do with money'. Tech billionaires always keep working. Plus, there are always new products and services being devised.

[Geoman]

I'm not worrying about our ability to spend money, I am worrying about our ability to productively invest money.

Here is what I see:

1) Luxury goods become cheap and common place.
2) Money instead chases investments.
3) Liquidity drops interest rates.
4) The money then chases assets - property and stocks.
5) Property and stocks increase rapidly in price.
6) Profit taking occurs and the bubble pops.
7) Keep repeating - asset run-ups and sell offs.

And look at millennials - they seem increasing less interested in materiel goods. A good measure of the future is what has happened across the board in the collectibles markets: art, coins, stamps, comic books...prices have been dropping for a while now, and that is because the ranks of the collectors are diminishing, and not being replaced. Millennials have no sense of scarcity, ergo no sense of acquiring or saving materiel things.

[fatcat]

Hi Geoman,
>I'm not worrying about our ability to spend money, I am worrying about our ability to productively invest money.
>…
> 4) The money then chases assets - property and stocks.
>…

Well, stock are the definition of investment. If you cannot create a startup or a small business, you can always buy a share in some enterprise and the publicly traded equity is very liquid and easy to get in … and abuse for speculation :)

> Millennials have no sense of scarcity, ergo no sense of acquiring or saving materiel things.

Of course, there is a cultural shift. Why value physically printed book , if you have a digital copy of (hundreds thousand?) thousands of books which is at your fingertip, many of them literally for free. Stamps, baseball cards, and those memorabilia are just plain stupid…
However, it could be also that the millennials have less purchasing power. And they have realized that they don’t have to participate in the rat’s race of pursuing a career, getting a mortgage and working your ass off. Instead they scale back on their spending and living standards but have more free time and, arguably, less stress.

[Geoman]

I think what you said proves my point.

If stocks and real estate are bubbly, then you are not increasing wealth, you are transferring it among certain players. Average people won't invest.

And if we think that goods and services are going to soak up the excess, millennials are saying no to that.

So...where does it go?

I suppose we could say it goes into leisure time - people intentionally working less than they could.

[Kartik Gada]

Geoman,

1) Luxury goods become cheap and common place.

Yes, but new luxury goods emerge. The luxury goods of yesteryear are cheap today :

i) Ballpoint pens were very expensive until 1960. They cost $6 in 1955, which was several hours of the average wage.
ii) Incandescent lightbulbs were getting stolen rampantly from hotels well into the 1970s. LED bulbs were getting stolen until about 2013. Now even LED bulbs are to cheap to steal.
iii) I am old enough to remember when almonds and cashews were expensive.
iv) 27" flat monitors are now inexpensive. This was unthinkable 15 years ago.

The same process is ongoing.

2) Money instead chases investments.

Yes, but this is what is should be.

3) Liquidity drops interest rates.

Yes, but this is also as it should be. Remember that QE dropped the FF rate, creating an effective -2% (see the Wu-Xia shadow rate linked in Chapter 4 of the ATOM).

4) The money then chases assets - property and stocks.
5) Property and stocks increase rapidly in price.

Yes. Equities will and should rise. Some property will, but eventually the forces obstructing the technological disruption of property will be broken, and more and more basic property will be commoditized.

6) Profit taking occurs and the bubble pops.
7) Keep repeating - asset run-ups and sell offs.

Yes. But the ATOM-DUES rises 16-24%/year anyway. The booms/busts will be sharper, but recoveries faster, and always with higher highs and higher lows.

So I pretty much agree with the scenario. I just think it is much better than stagnation that we have now.

I suppose we could say it goes into leisure time - people intentionally working less than they could.

A leisure class on the DUES is not a bad thing. But I think this is going to be a minor aspect, since 0% income tax will mobilize a lot more people to work more and start new ventures. Also remember that technology always monetizes new skillsets and actions.

[Geoman]

Okay, I agree with all of that. New luxury goods will evolve. And for the man who has everything, a trip to the moon! The future will certainly be an interesting place. Cheaper, better goods and services, more pay, less work. Every man a millionaire and a chicken in every pot!

And you are correct - I'm old enough to remember when food was pretty crappy, and expensive. A person in America can eat pretty luxuriously these days for not a lot of money. I remember 30 years ago surviving on $15 bucks in groceries a week, and with 30 years inflation, I'd bet I could still do it, and eat better.

Heck, just going to the hardware store I'm impressed by the variety of tools at low prices. I remember my father saving for weeks to buy a circular saw that I can get now (a vastly improved, safer model) for $35. When my saw I had for 30 years broke, I just went out and got another that day, no worries.

[fatcat]

Hi Kartik,

>1) Luxury goods become cheap and common place.
Yes, but new luxury goods emerge. The luxury goods of yesteryear are cheap today

It is ironic, but some formerly widely available products might become luxurious due to higher demand instigated by higher living standards or resource depletion. For example, Caspian black caviar some 30-50 years ago used to be almost a staple food in the region. Now the price is around 100USD per spoon. Some real estates and views will become more expensive or even unattainable. Some things might become more expensive because the manual labor used for those is climbing the income ladder. It seems also that the moment there is a chipper substitute for a product it doesn’t displace the said product 100% but rather cannibalizes its market share and the remaining part moves to a higher tier.

ii) Incandescent lightbulbs were getting stolen rampantly from hotels into the 1970s.
I wouldn’t go so far in the past. Just a few years ago LED bulbs were 20-40$ with quite questionable light output and overhyped quality. Now they might be cheaper than the incandescent ones depending how you calculate the TOC. (I prefer to pay premium for longevity for places that are hard to access :) )
Yes, but this is what is should be.
Exactly, and the if invested wisely can be put to a good use for greater good of the economy as a whole

Yes. But the ATOM-DUES rises 16-24%/year anyway. The booms/busts will be sharper, but recoveries faster, and always with higher highs and higher lows.
So I pretty much agree with the scenario. I just think it is much better than stagnation that we have now.
>I suppose we could say it goes into leisure time - people intentionally working less than they could.
A leisure class on the DUES is not a bad thing. But I think this is going to be a minor aspect, since 0% income tax will mobilize a lot more people to work more and start new ventures. Also remember that technology always monetizes new skillsets and actions.

[fatcat]

Geoman,Kartik,

A leisure class on the DUES is not a bad thing. But I think this is going to be a minor aspect, since 0% income tax will mobilize a lot more people to work more and start new ventures. Also remember that technology always monetizes new skillsets and actions. .

And DUES addresses the looming inequality of immense proportions. Honestly, what are average feelings towards the unwashed underclass that is too demotivated to work and yet is an eyesore for the working middle class? And yet the very same lazy drinking substance abusing person would be acceptable as an aspiring artist if having enough income to support a decent lifestyle. The perils and moral predicament of having destitute underclass is orders of magnitude worse than having some leisure generation.

In fact , the amazing , dare i say, magical, thing is that DUES can marry the socialism and the libertarian capitalism.

[fatcat]

Hi Geoman,
Every man a millionaire and a chicken in every pot!
But simply being a millionaire in 2050-2070 doesn’t mean the same thing as being a millionaire now. And it's not even close to being millionaire on the turn of 20th century. Being an average Joe shmo amongst the millionaires (like people owning houses worth of few millions in the Beverly Hill’s ghetto) doesn’t improve your relative status. But you can have all kind of toys and gadgets, of course.

[fatcat]

Hi Geoman,
Heck, just going to the hardware store I'm impressed by the variety of tools at low prices. I remember my father saving for weeks to buy a circular saw that I can get now (a vastly improved, safer model) for $35. When my saw I had for 30 years broke, I just went out and got another that day, no worries.
In the last 15 years plasma cutters have become really affordable (I don’t need one but they are cool). For a few hundred dollars you can do metal works

[Kartik Gada]

fatcat,

In fact , the amazing , dare i say, magical, thing is that DUES can marry the socialism and the libertarian capitalism.

Indeed. That is why it is a paradigm shift compared to the obsolete politics of the contemporary West. China has figured out other parts of the puzzle, but are still terrible on some older aspects.

If you haven't read Chapters 6-10 of the ATOM in a while, you may want to skim it again.