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Why Tech?

When a society invests in something, like American Universities invest in technology, it is with the understanding that the investment will improve the quality of life of the citizens. That could mean several different things. It could mean to keep people more safe, happy, or productive. This is why it’s okay for us to take on debt as a society. It’s simple: if that debt pays dividends in the form of a better quality of life, then the people in the society will still believe in it. It will maintain it’s credibility, and credibility is everything in an economy based on fiat money.

Fiat money... and it's implications.

From the moment our money gets printed, or in most cases simply added to an account, it’s a debt to be paid. To whom? Well, that depends on who gets it. 

Does that sound a little funny to you? Probably yes if you think about it, but it’s assumed to be credible, so there is no problem. In fact, the American money system is so credible that people around the world believe in it more than other systems, so it’s considered a safe haven. That’s why when the stock market crashed the dollar went up in value. Everyone sold everything and went into dollars. 

It’s a testament to our system, and the people in it. Money that’s not  based on anything but trust and belief in the system relies on just that: the trust and belief in the system. People hoard dollars because they don’t trust the system, but they are relying on the system the most.

Why Tech Matters - Entrepreneur Welfare State

There’s a huge problem though. There is usually a premium you pay for having a lot of money right now, and you could see why this would help discriminate between investments so that societal resources go to the best use. The question is why the cost of money, which is the interest rate, was so low for so long, and what implications this had. There are two extremes, of course. On one hand, it could be that our society has so much resources, and the benefits to allocating those resources are so high, that a low cost of borrowing, and high investment return from the corresponding technology, made it worth it. 

This makes sense when considering the technological advancements in recent years. Computers and the information age has made our lives rich. There are negative externalities of course, but on the whole our lives have been transformed like never before in history. It is as if an alien life-force came down and gifted us with omniscience. It might take a second to google it, but on the whole we have access to loads of information.

The other side has it’s merits too, however, and especially in a dynamic sense. Many people think that giving out resources to people disincentivizes them from working. I think you can argue that this has happened with the newest generation of entrepreneurs. It doesn’t matter if they make a profit, because more free money is on the way. It may be that reducing competition with low interest rates and eliminating the possibility of failure has significantly reduced productivity. 

"BUSINESS HAS
ONLY TWO FUNCTIONS
MARKETING AND
INNOVATION"
-MILAN KUNDERA

Sage Market Technology Consulting

Final Thoughts

Irregardless of the unintended consequences of “free money”, technology has advanced at blazing fast speeds. So much so that it’s easy to see why many businesses have been left in the dust, incapable of adopting the technology because they don’t know how. That’s what Sage Market is for. We’re a technology consulting company that helps businesses adopt technology in new ways to increase their bottom line. Our fees pay for themselves, or we don’t charge.

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