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The Price of Yesterday’s Innovation: Applying Insights From Jeff Booth’s “The Price of Tomorrow” To The U.S. Patent System

*Special thanks to Jeff Booth for discussing these ideas with the author.

In his 2020 book, “The Price of Tomorrow: Why Deflation Is the Key to an Abundant Future,” Jeff Booth describes two opposing forces at the core of our economy: fiat monetary debasement (i.e., money printing) and technological advancement. Monetary debasement is inflationary, as prices rise when more dollars, euros, etc., chase after the same number of goods and services. Technological advancement, by contrast, is deflationary, as over time technological breakthroughs allow for goods and services to be produced and distributed at higher volume and lower cost. The effects of these opposing forces on price levels somewhat cancel each other out; an increased supply of currency is matched to some degree with an increased supply of goods and services available. Of course, different classes of goods and services are impacted by technological innovation to different degrees, which results in uneven inflation rates across industries. The rate of innovation in the consumer electronics industry, for example, is faster than the rate of monetary debasement, resulting in the net reduction in electronics prices we have all come to enjoy. Technological advancement has had far less impact on housing and higher education, however, which can at least partially explain the rapid inflation in those sectors. As Booth explains, both monetary debasement and technological advancement are exponential in nature. The rate at which governments are printing currency and the rate of technological innovation are increasing every year.

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