From cheaper to free
Technology is deflationary
Almost every useful technology lowers the cost of producing something. Electric lights cost perhaps one-thousandth per unit of brightness what candles cost in the nineteenth century. Fertilisers made possible by the Haber-Bosch process cut the cost of calories by an order of magnitude. Each wave of automation compounds this — that is why we do it.
Demonetisation
Peter Diamandis and Steven Kotler's 2015 book Bold popularised the term demonetisation for a sharper phenomenon: a good or service becomes so cheap that the transaction effectively disappears. A GPS that used to cost $500 is now a free app. A photograph that used to cost a dollar is now a by-product of a swipe. The income that used to go to those transactions is gone.
Why that cuts both ways
For consumers, demonetisation is pure gain — things that used to cost money now cost nothing. For producers, the income simply vanishes. This is not new. What is new is the speed and scope: AI tools are demonetising whole classes of professional services (basic legal drafting, routine medical triage, simple translation) at a pace previous waves never matched.
Why this is a setup
If enough income demonetises quickly, the macro consequences — less household spending, fewer wages, shrinking tax base — can cascade. The next module examines what that cascade looks like. For now, hold on to two ideas: technology makes things cheaper, and cheap can become free.
Name three things that used to cost you money and now cost nothing. What happened to the people who used to be paid for them?