I ran across a post at one of the companies I like to keep tabs on, Cleversafe. They have an interesting product that allows you to disperse data across a network rather than just simply copying data. This gives the advantage of using far less disk space than you would use by copying data over RAID and several backups. But that isn’t my point.

There was an interesting post in their blog with some informative economic insight that you normally wouldn’t think twice about. In the post, the author notes that back in 1956, a 5MB hard disk drive cost roughly $50,000 or $10,000 per MegaByte.

With the recent announcements of 4TB hard drives on the horizon, the author reflexively does the calculations to arrive at the 1956 cost of the same disk space: $40 billion. That’s right, if you needed 4TB of storage in 1956, you would have… a $40 billion investment. Of course, that is in 1956 dollars. In today’s dollars, inflation adjusted, the grand total a 4TB size of a drive would have cost is:

$302,002,380,304

You are reading that right. If a 4TB hard drive was built in 1956 by IBM, it would have cost you roughly $302 billion in today’s dollars. So what is the lesson? It isn’t that a 4TB hard drive is really worth $302 billion dollars.

There are quite a few different lessons that can be derived from this. For many of us in technology, we tend to take progress for granted. However the technology and PC market is one where we can see how markets really work. Prices are continually driven down by innovation. Think about that – our current computers are yesterday’s “super” computers. Many “super” computers are nothing more than a chain of systems similar to what we have on the desk top now.

The real economic lesson in this story is that while a lot of people complain about the “stagnating wages” of the “middle” and “lower” classes, you can only complain insofar as you are able to ignore progress where prices are constantly driven downwards.