An interesting way in which money is totally broken

Calculating inflation, earning power, social progress, equality and inequality -- they all depend on being able to compare what used to be happening in our economy to what's happening now, and the way we do that is with money.

But money sucks for this. Comparing the cost of (say), the median smartphone today to the median smartphone ten years ago tells you something, but it obscures as much as it illuminates. The median 2018 smartphone is much faster and more powerful than the ten-year-ago version, so how do you (or do you?) discount that earlier phone in your comparisons?

As Rasmus Fleischer describes in his opening keynote for this year's Transmediale, the assumptions we use when we compare the past, present and future are manifestly broken, easily manipulated, and distort our ability to measure whether things are getting better and, as a consequence, what we should do.

Today, even mainstream economists are questioning the official price index. But they question it on the grounds that it should be even more optimistic. They think that the digital revolution brings so much more utility to us, that is not yet captured in numbers.

So may it be. But you could just as well adjust the numbers in the opposite direction.

Right now, we see how the critique of social media is becoming mainstream. If this critique reaches all the way into the statistics office, they would have to adjust the whole price index, affecting all statistics that rely on it. That could actually throw the world economy in a much darker light.

Here follows a brief talk that I held yesterday at the opening of Transmediale. [Rasmus Fleischer/Nettime]

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