Whenever my young sons would ask for something, like an Xbox, I’d say no. “Why not?” they’d wince. “All our friends have one.” To which I’d reply, “I didn’t have one when I was your age.” As they got older, they wised up. When I told them “I didn’t have an iPhone when I was your age,” I got the Monty Python-inspired comeback: “Let me guess—you walked to school, uphill, both ways.” Eventually, they got their iPhones, but not until after a lecture about the land of plenty they live in.
It’s a lesson easily forgotten because progress is a creeping thing. Society doesn’t get wealthy overnight. But it does get wealthy. Three years ago, in his speech calling income inequality “the defining challenge of our time,” President Obama lamented people’s frustrations. “It’s rooted in the nagging sense that no matter how hard they work, the deck is stacked against them. And it’s rooted in the fear that their kids won’t be better off than they were.” To coin a phrase, the only thing we have to fear are those peddling fear itself. Won’t be better off? Our kids are billionaires compared with us.
In 1970, Intel pioneered integrated memory chips to replace wire-wrapped diodes. The 3101 was a 64 bit SRAM chip that IBM and others could buy for $40 each. Let’s call it a buck a bit. Today, unless you’re one of those die-hard retro flip-phone types, you’re carrying around an iPhone or Android with at least 32 gigabytes of memory. At a buck a bit, that’s . . . wow, congratulations! You’re a billionaire! We all are.
In the early ’80s, as an engineer at Bell Labs, I used to buy VAX 11/780 computers from Digital Equipment. They required giant air-conditioned rooms with raised floors and fire-suppression sprinklers. All in, they cost $1 million of Ma Bell’s money from overpriced long-distance calls. This particular machine could run at 1 MIPS or million instructions per second. Let’s call it a buck an instruction per second. Today, you can buy a 4 GHz i7 quad-core computer. No air-conditioning required. You’re a billionaire!
Until the late ’90s, if you wanted to go online with more than a 56K modem—that’s 56,000 bits per second—you had to buy what was known as a T-1 line from AT&T and others. A T-1 line was 1.5 megabits per second and would run $12,000 a month or $150,000 a year. Let’s call it 10 cents per bit per second. Today, if you’re lucky enough to live in 50 cities that have gigabit fiber to the home, you’re a billionaire, almost!
In April 2003, the Human Genome Project finished sequencing human DNA. It took 15 years and cost $2.7 billion. Today the California company 23andMe will sequence your genes and in weeks you’ll “receive 65 online reports on your ancestry, traits and health” all for $199. Congrats. You’re a billionaire.
The ability to use these same tools to sequence the DNA of tumors and provide precision medicine to eradicate cancers is priceless, something billionaires didn’t have just five years ago. Think about that. You don’t have to compare yourself to living in the smoggy ’70s that no one really remembers (or was that the ’60s, I don’t remember) but you’re a billionaire compared with folks living just a few years into the 21st century.
Or less. The Amazon Echo was introduced only two years ago. The ability to use your voice to get scores of Cubs games or the weather in Sheboygan or emulate Rick’s Café—“some of the old songs, Sam/Alexa”—would require at least 30,000 people employed around the world with real-time connections. A billion dollars at least.
And today, we all have this magic remote control in our pockets and if you push the right buttons prepared food shows up in 15 minutes, a shiny car in three, and it will show you a Pokémon hanging around on a street corner that you can capture. What would it take to create this even a few short years ago? Well, you know.
Taxing “fat cats” and those creating all these wonders means less investment in the next wave. You can’t redistribute your way to progress. And the minutiae of studying mobility and income quartiles down to the percentage point and how much the 0.1% earns is pointless, especially when we are all billionaires compared with the very recent past. And the same pundits will pooh-pooh education reform when that’s exactly what’s needed to help churn out surgeon-class coders and the creative class to create this new world. Stamping out opportunity inequality, through better schools that teach skills for this century, not the 20th, will keep the productive side of the economy humming.
I’m sure my sons will pull the same trick on their kids. “I didn’t have a self-driving Buick/holodeck/visit to Westworld when I was your age.” Then, they’ll probably all be trillionaires compared with today.