Programming Deflation

The genies are out of the bottle. Let’s take as a given that augmented coding is steadily reducing the cost, skill barriers, and time needed to develop software. (Interesting debate to be had—another day.)

Will this lead to fewer programmers or more programmers?

Economics gives us two contradictory answers simultaneously.

• Substitution. The substitution effect says we'll need fewer programmers—machines are replacing human labor.

• Jevons’. Jevons’ paradox predicts that when something becomes cheaper, demand increases as the cheaper good is economically viable in a wider variety of cases.

Both can't be right. Or can they?

Another way of looking at the contradiction—if programs are cheaper to write today than they were yesterday, then we should be more likely to write them today. But, if programs are going to be cheaper to write tomorrow, then why not just wait until the cost goes to zero? This is the deflationary spiral, the urge to defer investment leading to less economic activity leading to lower prices leading to the urge to defer investment.

What’s a software executive to do? A programmer? What we’d like is a strategy that:

• Let’s us act today.

• Doesn’t rely on information that just not available.

• Leads to reasonable outcomes regardless of which way the rock tumbles.

But Wait, This Feels Different

Traditional deflation is destructive because it reflects economic weakness—falling demand, broken confidence, shrinking money supply. Programming deflation is different. It's driven by genuine productivity gains. AI isn't just redistributing the same pie; it's making the pie-making process fundamentally cheaper.

This creates some interesting paradoxes:

Delay vs. Experiment: Yes, you might wait for better tools. But when experimentation costs approach zero, the urge to try something right now often wins. How many of us have spun up a quick prototype just because we could?

Quality Bifurcation: Cheap code floods the market. Most of it is terrible. But the gap between commodity code and carefully crafted software widens. The middle disappears.

Value Migration: Writing code becomes like typing—a basic skill, not a career. Value moves to understanding what to build, how systems fit together, and navigating the complexity of infinite cheap software pieces.

The Acceleration Effect

Here's where programming deflation breaks the traditional model entirely. In economic deflation, the spiral is self-reinforcing and destructive. In programming deflation, cheaper tools might actually accelerate innovation—when programming accelerates programming. Better tools. Better models. The reinforcing loop kicks in.

Every ...