| The True Prices Reducing all prices to a single index of hours and minutes, they offer the possibility of resolving the debate once and for all. Time-prices are true prices: the number of hours and minutes it takes you to earn the money to buy a good or service. Money is a measuring stick, but it can only convey accurate values to the extent it reflects the ultimate scarcity of time in the economy and in our lives. Most economic analysis defines interest rates as mediating across time and exchange rates as mediating across space (between countries and currencies). Then, economists estimate "real" values by calculating price indices, such as inflators, deflators, and purchasing power parity comparators. The estimation of changes in time and space become ever more complex and demanding. Time-prices combine the two indices into one number: the true price, measured in hours and minutes in all regions and over all periods. The function of money is to serve as a measuring stick. It enables transactions by referring value to a fungible element common to all people in all eras across the world. What remains scarce when all else becomes abundant is time. From time-prices, we learn that as long as governments permit entrepreneurship and technological advance, investors can be confident that economic growth will continue or even accelerate. From Marian Tupy and Gale Pooley's scrupulous researches, we find that time-price improvement — the number of hours needed to earn the money to buy the key commodities of life — declined at a compound annual rate of around 2.2% between 1850 and 2018, 2.5% between 1900 and 2018, 3.1% after 1960, and 3.4% since 1980. In other words, we see signs of the phenomenon identified by Henry Adams in the 19th century and by Ray Kurzweil in the 20th and 21st centuries: the law of accelerating returns. Through compounding effects, the world is getting richer at an ever-faster pace. Just on the basis of rough impressions gained as a youth milking cows by hand, throwing bales onto trailers, and chopping boughs into firewood, I always doubted the notion that technological change is accelerating. It seemed to me that the transformation effected by the industrial revolution from farms to cities was more dramatic than anything we gain from Google and other vendors of technology today. With the proportion of people extracting their living from the earth through farm work dropping from over 90% to under 2%, and average longevity rising from 35 years to 75 years, current changes seem to continue but not accelerate the industrial breakthrough. Despite Pooley and Tupy's findings since 1850, however, time-prices may support my view as an acceleration denier. The most spectacular previous use of time-prices came in a 1992 essay by William Nordhaus of Yale entitled "Do Real Income and Real Wage Measures Capture Reality? The History of Lighting Suggests Not." Putting Phelps-Brown, Hopkins, and their Forbes exponents to shame, Nordhaus calculated that through half a million years, from cavemen's fires to the candles that illumined Versailles, the labor cost (measured in hours and minutes) to light a room dropped roughly 75%. Then after a brief period of stagnation between 1711 and 1750 when Britain maintained a tax on candles and windows, the time-price of light began to plunge. Gas light cost one tenth as much as candlelight and kerosene light one tenth as much as gas light. That meant the time-price of light dropped a hundred-fold. Then the arrival of electricity in the 1880's brought another thousand-fold drop, for a total of a hundred thousand in some 150 years. Today's Prophecy This radical drop in the effective price of a critical service that scarcely changed over centuries manifests deflation or price decline as the natural condition, not rising prices. Since this graph of technical advance was accompanied by an epochal increase in global populations and in longevity, it could not have been counteracted by rises in the time cost of food and fuel. Time-prices tell us that economic models have been deeply wrong. We live in a universe of abundance, not of scarcity. Only our money as a measuring stick should reflect the residual scarcity of time. As investors we must learn how to take advantage of the providential abundance in our lives. Regards, 
George Gilder
Editor, Gilder's Daily Prophecy P.S. I'm sure you've been hearing a lot about 5G lately, but before you even invest a nickel in 5G stocks, I'm saying you should "forget 5G" and start piling up a stake in what I like to call "15G" instead. Learn more about "15G" when you click this link to watch a video presentation with my publisher and myself. | 
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