You might not know this, but one of the biggest developments in the history of investing was the Industrial Revolution. When we started to get to grips with cogs, coal, gears and steam to improve productivity, we started to find – and create more jobs and thus more money. As we dug into the earth and blasted soot, dirt and all those terrible materials high into the sky, we found opportunity in more ways than one. We made all sorts of jobs for people, we made more ways of working – and we actually found some use for our money. It founded everything we know about finance.
Why is that? We only found out that we could use steam and mechanics and industry to work harder, better and achieve incredible results – so why the big fuss about cash? The Industrial Revolution did one thing for the human race – it allowed us to see that we could develop an excess of cash. We paid people for work, but what happens when that work is done faster, and we are making more money? More money than it would take to run the business? We have some left over. We have an excess of cash. For the first time in life, we have an excess of money.
Nowadays, the answer of where we put all this excess is easy. We save cash in banking accounts, and that’s all thanks to the advances made in banking during the Industrial Revolution. It enabled an excess of funds for the first time and we needed a place to put that cash. It wasn’t just the banks – advances in the working life that allowed that excess allowed people to invest and fund projects. If a new factory needed to be opened, a new railroad built – people would be able to back those projects with their spare cash.
Time is set on repeat though; it wasn’t just the advances in the Industrial Revolution and working life that changed how we use money – it’s the revolution we are undergoing right now that could herald huge changes in investing, finance and banking. Of course, it’s the revolution in automation. As factories become more reliant on robotics and automation and as factory work is phased out – more and more people will be without work. This will multiply when driverless tech takes to the roads. What this means is a push for basic income, where everyone receives a flat payment for existing.
If automation means basic income is adopted, it’s likely that there will be more cash around for investing – meaning that we could hit another golden age of products and developments as more people back them. Certainly, it means advances in investing via social trader applications, which would mirror the advances in banking and trading that came about when people had cash to spare.
Automation could mean a lot for investing, actually – it will mean a lot for investing especially if Governments acknowledge basic income. We could be on the cusp of the next big investing boom!