As humans, we have a habit of looking at the “cost of living” and merely observing the things that are getting more expensive. And, unfortunately, some things are, even after taking into account the effect of inflation.
But there is a whole raft of things that are getting cheaper. And it’s almost always the effect of technology.
We don’t see things getting cheaper because many of the same bugbears remain. Families still have to pay high housing costs, especially near to major economic hubs. And the price of energy is something that remains high (although that is about to change as you’ll read below). But for the most part, technology has made family life a lot cheaper. In industries where the government is not heavily involved, prices are falling a lot.
Let’s take a look at some examples.
Cheap International Travel
Taking a trip abroad used to be expensive. It was the sort of thing that a middle-income family did once per decade. Foreign tours were a once-in-a-lifetime experience and regularly connected with work, not pleasure.
But things began to change at the start of the 1990s. The government deregulated the aviation industry, freeing up entrepreneurs to offer people cheap flights. The result of this was a shift in the tourism industry. Savvy countries, like Spain, began building large resorts to house all of the people budget airlines were bringing to their shores. The tourism industry boomed and provided a new source of income for the economic backwaters of Europe.
More recently, technology forced down prices for the average family holiday even further. Price comparison sites began to show customers that they could get a hotel, flight or any other holiday expense cheaper by changing their supplier. Before long, practically everyone was using these websites, forcing the price of holidays down tremendously. It’s impossible to charge a markup when your expenses are publicly available.
International travel is a booming industry. You can hop on a flight from the UK to a variety of European capitals for less than £50 in many cases. And there are a variety of websites out there that specialise in finding the lowest price for this kind of thing, even if you book last-minute.
Lower Energy Costs (Yes, Really)
You might think that energy prices are going up. And to be fair, they have been for many people in the UK. State-led power generation lacks innovation and is expensive. It’s a tragedy that we’ve allowed it to happen and go on for so long.
Fortunately, though, there’s an alternative technology which promises to make unlimited free energy available to the average person: solar panels paired with batteries.
The solar panel home market is maturing nicely. Prices have collapsed over the last ten years as companies ratchet up volumes and learn how to mass-produce units cheaply. Homeowners can buy solar panels and install them on their roofs, making a return on the initial investment within five to ten years. The solar panel Grid Trade Incentive makes the deal even better. Homeowners can earn an income by selling their excess power back to the grid. The more energy that homes supply, the fewer fossil fuels energy companies need to burn, and the lower their costs.
Batteries are still a little further off, but not much. When home battery kits do come online and become affordable, it’s hard to imagine people not opting to use them. The benefits of never having to pay an energy bill ever again are just too big to ignore.
Lower Educational Costs
Here’s another state-dominated industry: education. Education shouldn’t be particularly expensive. The basic idea is to transfer knowledge, information and ways of thinking to the next generation. It requires people, but it doesn’t need buildings, classrooms or even pencil cases. Education is a purely intangible good.
The problem in the past was that it was pretty tricky to disseminate education services. You had to gather up children in a big building and sit them in front of a teacher who would communicate with them in small groups. Technology, however, could make that obsolete. You can get an education online for free – you don’t even need a private tutor.
Granted, the majority of people have to pay for education through their taxes. But the internet makes it possible for parents to cut down on tuition fees and other education expenses.
Lower Entertainment Costs
The amount of entertainment you can get for a given amount of money has exploded in recent years. When entertainment required physical equipment to store it, such as CDs and DVDs, you were limited. You had to go down to the store, pick up a copy of whatever media you wanted, pay the cashier, and then put it into your player device at home.
Now, though, you get access to the entire Netflix library for a small monthly fee. And it’s not just Netflix: we could find dozens of instances of the collapse in the price of entertainment elsewhere. Amazon Prime members, for example, can get access to millions of songs for free and listen to them whenever they want. People who log onto YouTube can access video content all for free, so long as they’re prepared to sit through the odd commercial. It’s quite remarkable what’s happened in the entertainment space.
What’s interesting is that now you have the choice to entertain yourself for free when you didn’t in the past. There are even free video games on platforms like Steam, where you can have a multiplayer online experience that would have cost you a lot of money in the past.
Lower Loss Of Valuable Items
Replacing stuff you’ve lost is expensive. But technology is making that less expensive too. Most of the stuff that has value in our lives (and we’re prone to lose) has wireless technology on board. Your phone and tablet contain all of the information you need to organise your life.
The great thing about these devices, however, is that they’re now making it easy for you to track them. TrackR, for instance, allows you to locate devices that you may have misplaced. No need to hand your head low as you return to the shop to buy another.
*Collaborative post*
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