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The dead economy theory

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Re: The dead economy theory

#171

Post by scarmig »

coffeemug wrote: post #157
ekidd wrote: post #127

Earlier quoted context omitted.

> Why is this time different? If it was just programming being automated, then whatever. Lots of professions have been automated and society adapts. The underlying worry here is that current AI provides a partial automation of intelligence. The endgame for the investors and the corporations using AI is complete automation of intelligence (and manual labor, too). They want a $25,000 robot that works around the clock,…

The future you're describing doesn't seem likely to me because in this event the public will force redistribution through political action.

"Forcing redistribution" doesn't always happen. Typically, redistribution happens when negotiating leverage has increased such that the beneficiaries of any redistribution can make it more painful to not redistribute than to redistribute. I.e. they have labor power, which can be converted to force if necessary.

In a world where capital can substitute for labor, however, that substitution also applies to force-wielding labor. People want to strike because of intolerable working conditions? Send in robot scabs. People want to demonstrate en masse against a regime? Have robot officers police them, and have models identify participants so post-event disincentives can be applied. They want to have a violent uprising? Send in the mass fleet of drones.

Ideally, you'd avoid these outcomes entirely by molding the population into ideal consumers and distract them with superficial sports team style conflicts, so they never get to the point where collective action is even conceivable. But they're a useful backstop if those strategies fail.

Re: The dead economy theory

#172

Post by Zigurd »

daft_pink wrote: post #163

I think when these companies IPO later this year, we’re going to see the reality of the PNL numbers and whether they are sustainable etc as all the financials will become public. Rumor mill suggests that Anthropic might be profitable (but at what magnitude), OpenAI is not profitable, Google is mostly vertically integrated and has a low cost structure as they are have pre-existing data center buildouts, their own sili…

> later this year

One can hope that reality intrudes before the bubble gets even more dangerously inflated, but how many years has Tesla had a ridiculous P/E ratio. Even after growth stagnated and market leadership was lost in Asia and Europe. Number still goes up.

Re: The dead economy theory

#173

Post by jonners00 »

beepbopboopp wrote: post #76
xiaoyu2006 wrote: post #61

Earlier quoted context omitted.

It's not about "this time's different" but rather "the recovery will take too long to an individual" if AI is indeed replacing humans as currently hyped by the model companies.

I mean you could have written this article for mechanization word for word, I think the difference is that its coming for the white collar folks this time, who also are the folks writing the think pieces and media.

You couldn't have. Mechanical machines couldn't organise themselves into human-free supply chains that are economically productive for the owners of capital. AIs could.

Re: The dead economy theory

#174

Post by kipchak »

spondelkryp wrote: post #91

>The US horse population grew from nine million in 1840 to twenty-one million by 1900, seemingly immune to technological change. Within sixty years of the internal combustion engine, the population collapsed by eighty-eight percent. I think this is a very interesting and chilling point, especially if you draw the parallel literally. For quite some time, I was pondering the question:"Who is buying though?". I.e if you…

This is already to some extent a solved problem. The top 10% of households in the US for example are 50% of spending, the "horses" to a large extent already don't matter to the economy. This is similar to the relationship between US consumers and workers in undeveloped nations during globalization. Historically this tends to be resolved when it creates an unsustainable level of political instability, but there are many new ways of managing this.

https://libertystreeteconomics.newyorkfed.org/2026/05/tracki...

Re: The dead economy theory

#175

Post by red-iron-pine »

coffeemug wrote: post #157
ekidd wrote: post #127

Earlier quoted context omitted.

> Why is this time different? If it was just programming being automated, then whatever. Lots of professions have been automated and society adapts. The underlying worry here is that current AI provides a partial automation of intelligence. The endgame for the investors and the corporations using AI is complete automation of intelligence (and manual labor, too). They want a $25,000 robot that works around the clock,…

The future you're describing doesn't seem likely to me because in this event the public will force redistribution through political action.

hasn't happened in the US yet, and probably won't.

and they have all of the guns and trucks and toxic masculinity culture that requires survivalism and toughness and defending muh freedom

if the yanks won't, why would the public elsewhere?

Re: The dead economy theory

#176

Post by danaris »

onlyrealcuzzo wrote: post #134
10xDev wrote: post #115

Earlier quoted context omitted.

Does every business scale that way? Sure video games for example have only required more people and resources to develop games as the ability to create larger scale games have increased. But does that really apply to accounting? Not a rhetorical question.

Does it need to? 99% of people used to work on farms. Now they don't. Maybe ~99% of engineers won't write code in the future. They'll do some other engineering like thing... Maybe ~99% of accountant type people won't do accounting things. They'll do some other financial thing... We haven't even seen a rounding error in total unemployment directly attributed to AI, despite people saying the sky fell 24 months ago, and…

But your last sentence is talking about something completely different: the current reality, which most of the tech CEOs and AI boosters refuse to engage with.

For those of us in the fact-based world, the idea that AI will replace most human jobs is still just a talking point. It's a future possibility (not a future certainty).

But it's enough of a possibility that we need to be talking about it, and not just airily dismissing the concern as something that will obviously work itself out without any real problem.

Even if 99% of the current programmers go the way of 99% of people who were farming in 1750, you have to remember that a huge percentage of the farmers who were made redundant by industrialization and modern farming methods fell into destitution; many died penniless. That's not something that seems either wise or compassionate to just handwave away!

Re: The dead economy theory

#177

Post by red-iron-pine »

nerdsniper wrote: post #154
ekidd wrote: post #127

Earlier quoted context omitted.

> Why is this time different? If it was just programming being automated, then whatever. Lots of professions have been automated and society adapts. The underlying worry here is that current AI provides a partial automation of intelligence. The endgame for the investors and the corporations using AI is complete automation of intelligence (and manual labor, too). They want a $25,000 robot that works around the clock,…

> Strictly speaking, they don't even need us as customers. I think they'd employ some number of humans for entertainment.

they're already replacing actors with AI, mate. Once the slop machine gets better you won't know the difference

Re: The dead economy theory

#178

Post by crabbone »

alex_young wrote: post #130
dleslie wrote: post #110

Earlier quoted context omitted.

> Won't super power AI tools allow companies to do more with the same number of people? Don't you think a smarter way to run a business is to capture more of the market if you have the resources to do so? It is possible to have excess productivity. AI allows an existing labour pool to rapidly surpass necessary productivity levels for the existing demand. IE, let's say I live in a small town and I open a machine shop.…

The small town constraint is a bit artificial to this problem isn't it? If you operate a machine shop in a large urban area, have competitors, and access to much improved low cost tooling, would you: a) lay off a bunch of workers, or b) lower your prices and capture more orders? Same thing with accounting firms or marketers or business consultants.

Well, it's the same problem with all sorts of free-market capitalism and derivatives. They all believe there's infinite "somewhere else" that resources can come from, or the customers, or the funding etc. But reality is very much finite. And so instead of the theoretical equilibrium we get monopolies and collusion to manipulate markets.

The article, actually, addresses your claims:

> The optimists will tell you this is just productivity gains. The economy has absorbed automation before; agricultural employment collapsed from ninety percent of the American workforce to two percent and civilization continued. David Autor at MIT has shown that roughly sixty percent of today’s jobs didn’t exist in 1940. New technologies create new categories of work. True. But there’s a difference between an observation about the past and a law of nature, and the optimists consistently confuse the two. The agricultural transition took a hundred and forty years. Carl Benedikt Frey at Oxford has documented that the Industrial Revolution took seventy years before wages and employment recovered for the workers it displaced. In the interim, wages stagnated, the labor share of income collapsed, profits surged, inequality skyrocketed, and the political consequences included the Chartist movement and widespread social upheaval. As Frey puts it: “Most economists will acknowledge that technological progress can cause some adjustment problems in the short run. What is rarely noted is that the short run can be a lifetime.”

So, the author believes that the problem with your reasoning that it will take a long time for the niches you are talking about to be filled (lifetime, maybe more), meanwhile things will look quite bad for most those involved.

I am even less optimistic than the author. The new aspect of this workforce displacement is the centralization. Of course, previous advances in automation also caused a degree of centralization, but AI is posed to become super-centralized if you will. There will be just a handful of suppliers and nobody will be able to challenge them, similar to situation we have with microprocessors today. Needless to say this is absolutely not a healthy situation for the world's economy.

Re: The dead economy theory

#179

Post by Shalomboy »

pacifi30 wrote: post #12

I think this is where government steps in for each country, go on the path of exploration that has no profit per se in it like space exploration, human body understanding. I am drawing parallel to 1930s or 40s where great depression was smoothen because America embarked on to take many huge infrastructure projects. Lastly, OpenAI and Anthropic or any other frontier labs needs to be nationalized because they become a…

There is absolutely zero will in the United States to invest money in unprofitable exploration or scientific research. There used to be such will generations ago, but today's wannabee-autocrats couldn't care less. Look at how they gleefully cut scientific research funding, undermine academic sovereignty, and strip-mine the public sector performing that work in favor of private enterprises. When the shit hits the fan and we're all broke because the corpos laid everybody off for Devin, Claude, and Clippy, there won't be much left besides surrogacy and plasma donation.

Re: The dead economy theory

#180

Post by [deleted] »

philipkglass wrote: post #111
CM30 wrote: post #89

I think the thing companies forget is that a lot of them can't remain functional if a shrinking percentage of the population can afford their products. Yes, you can try and appeal to the rich and sell products/services aimed at their needs. But does that work for most companies? I'd say no. The rich won't buy millions of food items or works of fiction or go to every service available in real life. So, many of those c…

Most of the world's democracies don't have influential AI companies, so if the voters want X and companies want Y, X will win. There's little reason for Indonesian politicians to prioritize the interests of American or Chinese AI companies over domestic voters.

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