Is Technology Increasing or Decreasing Inequality?

In the case of wealth, as measured by money, the answer appears to be increasing. In the case of capabilities, as measured by utility, the story is more complicated. A big CEO may have orders of magnitude more wealth than I do, but he does not necessarily have comparably better access to information, communication, and entertainment. For example, we both probably have similar cell phones. This partly has to do with the diminishing marginal utility of money. But technological acceleration is also playing a role.

The usual trend with a new technology seems to be that at first it is very expensive, and then as time passes the price drops dramatically. Thus over the long haul, access tends to equalize, but there is a critical delay that occurs during which some people have a technology and some people don’t. These delays can be very significant. To cite a classic example, imagine it’s the fifteenth century and your civilization has access to firearms while your enemies do not.

With technological acceleration the delay times are shortening (a good thing for equality), but the comparative advantage of having a technology first is potentially increasing (a bad thing for equality). These two countervailing forces make assessing the overall effect rather complicated. My guess is we will see increasing democratization up until the point that the first mover advantage becomes insurmountable. Having a smart phone a month before your neighbor is not such a big deal, but having brain-enhancing implants first is another thing altogether.

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