How Technology Ends Inequality
By Alex Crompton, Managing Director EF Singapore
Technology creates financial inequality.
It spreads quickly and cheaply, which creates monopolies. And monopolies create financial inequality.
If products can be quickly and cheaply distributed around the world, most people will use the best product over the second best. That’s why the same mobile apps are often popular everywhere.
It’s also why the winners often end up being orders of magnitude better off than their competitors.
As technology spreads, we should expect more monopolies and more financial inequality.
Here’s the catch: technology makes its creators rich, but treats its users the same.
240,000,000 Indians use Facebook.
And while Mark Zuckerberg’s bank account contains 10,000,000 times more money than the average Indian’s, his Facebook account works more or less identically.
Quick and cheap distribution goes both ways — it creates financial inequality and experience equality. You can’t pay for a better Facebook experience.
Access doesn’t always start off the same, but technology gets quicker and cheaper to distribute over time. Eventually, it doesn’t matter how rich you are: everyone gets the same experience.
As technology spreads, access to experiences will become more equal.
Companies are incentivised to offer a product if it makes more than it costs. And technology ends up not costing much once you’ve built it.
So, in the end, you charge people whatever they can pay.
And costs scale better than you’d think, even when humans are involved. Uber works in India about as well as it works in San Francisco. People just pay and get paid less.
When tech works, the money is different but the experience is the same.
If technology leads to financial inequality but experience equality, so what?
Facebook and Uber won’t get rid of poverty.
But they’re just the beginning of a shift from ‘real’ to digital, artificial experiences. Few things, in principle, can’t be delivered through technology.
Is it possible that, one day, even the richest person would prefer to live in an artificial VR world? To have their senses tricked? To hook themselves up to the experience machine?
This is a pivotal historical moment. If even the richest person prefers an artificial experience over all that their money can buy, won’t the poorest?
Once even the rich prefer artificial experiences, experience equality becomes possible.
If this technology will ever exist for the richest, one day the poorest will have access to it. Technology gets cheaper and quicker to distribute over time.
We will all have equal access to experiences, whether or not the experiences we choose are equal.
When we prefer artificial experiences, and everyone has access to them, the world will be much less financially equal. But maybe even the poorest won’t experience it that way.
After all, we’ll be charged whatever we can pay. And at that point, why bother getting rich?