In his recently released book The Cloud Revolution, Mark Mills relayed to readers the remarkable fact that “it is one thousand times cheaper to light up a room today than it was at the dawn of the twentieth century, and ten thousand times cheaper than in 1845.” So what’s up with this big decline in price? Reduced economic growth since the mid-19th century, or reduced demand for electricity?
With only slight exaggeration, that’s seemingly how expert economists like Jason Furman would explain the alleged mystery of falling prices. Thoroughly of the belief that consumption and “demand” are the drivers of economic growth, individuals like Furman see rising demand as the same as rising prices. Except that demand is logically a consequence of economic growth. Production is what enables the demand.
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