Hunter Hastings and Kartik Gada discuss the transformative dynamics of the digital economy and its profound implications for society, economics, and governance. Kartik Gada provides a compelling analysis of how the exponential growth of the high-tech sector is reshaping traditional notions of supply, demand, and pricing, highlighting the unique characteristics of digital goods that defy conventional economic models

Through a deep dive into the future of taxation, entrepreneurship, and individual specialization, they explore the disruptive potential of AI and automation in revolutionizing the way we work, create value, and interact with the economy. Kartik emphasizes the significance of cybersecurity and ethical considerations in the digital age, and the use of technology to ensure fairness and safety for all participants.

Resources:

Book: ATOM: It is time to upgrade the economy
ATOM on YouTube
Kartik Gada on LinkedIn

Knowledge Capsule:

Kartik Gada is a futurist. He analyzes current and past data and trends to forecast what will happen in the future, and he has built a formidable track record. He joined The Value Creators podcast to talk about the future of entrepreneurships, of economics and of government.’

We are living in an era of ever-expanding entrepreneurship

• Technological disruption creates new opportunities for entrepreneurs.
• The only profession that never gets displaced by technological disruption is entrepreneurship.
• What makes a human redundant for a certain task is, simultaneously, free money for the entrepreneur.
• Automation makes revenue streams cheaper to generate for entrepreneurs, increasing the profitability of entrepreneurial activity.

Entrepreneurship should win out and result in a more decentralized economy, less dominated by big business – but government gets in the way.

• The first principles of the accelerating technological disruption (Kartik calls it ATOM – the accelerating technonomic medium) are in favor of entrepreneurship.
• But nation states are a countervailing force – a cartel of governance that doesn’t want to give up power.
• Big corporations find it easier to enter into protection agreements with governments (e.g. vis lobbying for favorable legislation) rather than undertake open competition.
• The switch from centralization to decentralized entrepreneurship will be turbulent as a consequence.

Accelerating technology favors the emergence of new business models.

• Smaller and smaller teams can produce software and make money.
• Social media is an example of providing celebrity influencers with the tool to generate profitable revenue flows.
• AI will be a supercharger, making otherwise unprofitable revenue streams into profitable ones by reducing labor costs.

More and more industries are arriving at their disruption point.

• Economic growth has been slow until now. For 5000 years it was zero, but continuous improvement in technology pushes growth rates up.
• The higher the percentage of technology in the economy, the higher the growth rate.
• No industries are immune to the effects of technology.
• At the macro level, the effect is higher growth. At the micro level, it’s the accelerated disruption of existing industries and firms.

Education is an example of an industry ready for disruption.

• Education (especially higher education) is an example of an industry attempting to create false scarcity which will be unable to withstand the technological provision of abundance.
• The english speaking world alone has a million schools with millions of teachers teaching the same thing every day.
• Technology can replace this wasteful duplication – giving all children access to all the education they can consume.
• Higher education aims at gouging people with a scarcity-based model that is redundant.
• Hiring corporations will change their recruitment practices to hire smart students prior to university and educate them internally. After a couple of years they’ll have both practical knowledge and an understanding of firm culture, making them extra-valuable employees.
• It will be a modern version of apprenticeship.

Healthcare is another.

• Patients already prefer ChatGPT to their regular doctor visit.
• ChatGPT answers unlimited questions and isn’t trying to get rid of you for the next patient.
• Access is 24 hours a day and there’s no need for an appointment – no need to spend 2 hours traveling and waiting for a 10-minute appointment.
• Eventually, AI will disrupt the pharmaceutical industry too – most pharmaceuticals are just a reverse engineering of something that exists in nature, in plants, and AI will give access to this information.

Accelerating technology produces deflation; central bank money printing offsets it.

• Technology always brings cost reductions; as it becomes a great part of the economy, this will be deflationary.
• But we have a debt system, and deflation can be disruptive in this context: less cash available to pay debt.
• Government central banks should increase money printing to address this problem.
• Since demand for the dematerialized products of technological acceleration can grow to infinity, central banks will need to increase money printing far beyond its level today.

AI should pay taxes, not humans.

• Governments cause the biggest problems for the new technological era through their fiscal behavior.
• They spend more and more on the low tech welfare state, and they use taxation of productive human beings to pay for it.
• But if AI can replace human workers, then AI should pay the taxes.
• Eventually technology will replace the welfare state. Many services are already free in the technology realm, or paid for indirectly through pure exposure to advertising.
• Google already provides free food and access to wellness services for its employees.
• Governments build power over citizens with the income tax model and will be reluctant to cede it.
• But they won’t be able to hide their colossally wasteful inefficiency from citizens who are familiar with tech services.