In 2036, money loses its meaning (Elon Musk)

An independent exercise, not a statement by the video creator or verification of every claim in the video.

Nearly free goods do not make every living cost disappear

Assume a monthly consumption basket with fixed quantities and quality costs 100. Spending on goods whose prices fall through automation is 30, while housing, location, in-person services and other spending total 70. If only the first category’s unit price falls by 90% and the rest stay unchanged, the new cost is 30 × 10% + 70 = 73. Those goods become much cheaper, but the basket cost falls by 27%, not to 0. Even if their price reaches 0, the other 70 remains. Cost reductions from technology and their transmission into selling prices, incomes and access for different people require separate examination.

Check for yourself

1. What share of actual living costs is represented by the goods assumed to become cheaper?
2. How are ownership of robots and facilities, distribution of returns and access to scarce resources determined?

Limits of application

This fixed-quantity, fixed-quality basket uses arbitrary shares and price reductions; it is not an actual inflation forecast or official consumer price index. Other categories are not assumed permanently immune to automation; their prices are simply held constant in this example. Demand, quality changes, taxes and transfers are excluded, and the example proves neither money’s future survival nor any particular date.