2012-01-09

High tech, low budget?

Image representing iPad as depicted in CrunchBase
Image via CrunchBase
I used to think I'd always be able to live comfortably and cheaply. I didn't drive, I liked living in a small apartment, and I didn't care about owning such status symbols as a private art or wine collection. All I wanted that'd be a splurge for a student was a computer with the latest and greatest of hardware, which wasn't anywhere near as expensive.

There were also lots of things that weren't on the market yet, but that I'd want when they came out and became practical. A mobile, wearable augmented-reality device. A brain-computer interface and other cyborg enhancements. Utility fog to make shape-shifting clothes and furniture. A self-driving car, preferably a plug-in hybrid. But technological acceleration meant everything I wanted beyond a poverty-line lifestyle would get cheaper and cheaper. I didn't have to worry about pursuing a six-figure salary. Even working-class people would be able to afford the upcoming radical technologies we wanted, so Singularitarian Transhumanists could drop out of the rat race now and the human race later. Right?


Well, not quite. The Wall Street Journal noted last year that computer prices were rising (even excluding desktop computers assembled by the customer from components, which most of us discerning gamers still favour), and that we weren't likely to ever see $100 laptops that could replace a desktop PC (which means a real keyboard and mouse -- if I'd researched and written this article on an iPad or an XO-3, it would've taken a week longer).

At first glance, this seems to violate Moore's Law and its well-known corrolaries. The power of a desktop CPU is doubling every 24 months, as is the capacity of an SDRAM stick. The cost of a constant amount of memory or processing power, meanwhile, is decreasing by half (in nominal dollars) every 18 months. So even with the typical increase in specs, shouldn't the price of a computer in a given budget category fall by half every 6 years (5 when you adjust for inflation)? Well, not quite -- more and more computers these days are dual-socket, have two video cards (SLI), and use 8 or 16 RAM slots instead of 2 or 4.

So what about the rest of my future shopping list? One might argue that computers, long the exception to consumer-price inflation, will soon be the exception that proves the opposite rule. Extrapolating from historical precedent, the way we Singularitarians love doing, leads me to reject this argument. My evidence against it is another accelerating technology that's getting more and more expensive -- the automobile.

An elegant car, for a more affordable age.
The Model T's US price of $290 in the 1920s is equivalent to somewhere between $3,000 and $7,000 in 2012 dollars, depending whether you use the GDP deflator or the Consumer Price Index. With a fully user-serviceable engine and a fuel efficiency of 13-21 mpg, its operating costs in its day were as low as for any modern car (Hoover wagons notwithstanding).

For model year 2012, the cheapest car in both the US and Canada is the Nissan Versa (called the Tiida overseas), at US$10,990 or C$11,798. Instead of building on Henry Ford's legacy of cheap cars, automakers have abandoned it.

If everyone had access to the regular transit service of Toronto or New York or could commute by bicycle, this wouldn't be a problem. Unfortunately, even North America's growing urban majority includes plenty of people for whom transit isn't an option. I had to buy a bicycle this summer, in a city of 80,000, because the buses to my university classes were running only every 40 minutes. People I've spoken to who live in other neighbourhoods face such poor service year-round, in a climate of decidedly un-bikable Canadian winters.

The modern used-car market may also be helping, but Edmunds.com points out that only new cars can keep younger drivers safe. Since at least one economist argues that traffic safety is a Prisoner's Dilemma, a road full of modern used cars isn't necessarily safer than a road full of Model Ts.

Of course, prices are only half the story when it comes to affordability. You also have to look at wages, taxes, and government services. In the second part of this series, I'll take a broader look at the technological divide, based on adoption curves and standard-of-living trends.
Enhanced by Zemanta