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What will our economic future look like?

anthropic.com

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Re: What will our economic future look like?

#271

Post by PaulDavisThe1st »

engeljohnb wrote: post #184
JacobiX wrote: post #20

> As the nurse incorporates AI into her job, the nurse is able to oversee and accomplish more. She can spend more time talking with patients and helping them understand diagnoses. Productivity increases. This feels economically naïve.. If AI lets one nurse do the work that previously required two, the default pressure in a cost-driven system is not "great, now nurses can spend twice as long with patients" It is "grea…

I know this is just an example, but I'm going to say this every time the subject comes up: since human lives are the cost of making the wrong decisions, AI can't be allowed to be a decision maker of any kind in healthcare. If my blood pressure crashes because my nurse is caring for 15 patients at once and didn't notice that the AI decided to pause my norepinephrine, I won't consider "the AI did it" to be any acceptab…

Excuse for who? The nurse? The hospital administration? The hospital owners? The insurance company?

Re: What will our economic future look like?

#272

Post by [deleted] »

greedo wrote: post #235
arrowleaf wrote: post #185

Earlier quoted context omitted.

No? Prices are market-driven in our society, not necessarily a function of labor costs. In the very long-term best case scenario, the increased profits going to the company from these efficiency gains may encourage more competitors to pop up, and either drive prices down or offer more for what you pay.

Healthcare costs (what I assume you mean by prices) are the least market-driven items in the US economy. And as much as the medical community would have you believe, the primary driver of costs are labor costs. If we had twice the number of doctors, PRNs, PAs, and nurses, their annual income would drop dramatically. But since they're constrained by a guild system, it's not going to happen.

[deleted]

Re: What will our economic future look like?

#273

Post by Animats »

This is a spherical cow model. Here are their stated assumptions:

• Production involves a combination of tasks, where each task is performed by labor or by capital. The final goods market is perfectly competitive.

• Labor is supplied exogenously while capital is supplied along an upward-sloping schedule.

• There are two groups of occupations, of which only the cognitive group is exposed to AI.

For the amount of money Anthropic can spend on this, that's a very lame model.

The "two groups of occupations" assumption is so naive as to be embarrassing.

The assumption that only the "cognitive group" is exposed to AI is way too optimistic. We're close to automating drivers out of existence, and there's political pushback against that. Logistics is about half automated now and the rest is only a matter of time. Store shelf inventory taking is already done by mobile robots, and shelf restocking is coming.

India can't even mechanize agriculture to the level of, say, 1980s US without generating massive unemployment. Peasants rioted against that. "In India, farming transcends mere employment; it embodies a lifestyle. Nearly half of the Indian population relies on agriculture, either directly or indirectly."[1] (The US is under 2%.) That's what a desperate attempt to hold back modernization to preserve employment looks like. Most people are poor but alive.

There's no consideration of land and water constraints. Not so much a US issue, because the US is well-supplied in those areas. India and China are much closer to the physical limits there. AI won't help much.

"The final goods market is perfectly competitive." Oh, please. Everybody wants a "moat", and that generates a strong desire for monopoly if possible, oligopoly if not.

This comes across as a model where they started with the desired results and worked backwards. They should have done at least an input-output table of occupations and products/services.

[1] https://indiadatamap.com/2025/08/19/number-of-farmers-in-eve...

Re: What will our economic future look like?

#274

Post by adam_arthur »

It seems obvious that labor displacement due to AI will create labor surpluses in existing fields.

Which will feel quite bad for many of us in the present, but net-net be good for society in the long run.

Wages will go down, but cost of goods and services will decline even more.

Markets will be more competitive than ever, which limits the moat/margin capability of many businesses.

It's only really particularly bad for those earning very high wages where there likely won't be any way to materially fill the gap.

Re: What will our economic future look like?

#275

Post by WalterBright »

JeremyNT wrote: post #172
JacobiX wrote: post #20

> As the nurse incorporates AI into her job, the nurse is able to oversee and accomplish more. She can spend more time talking with patients and helping them understand diagnoses. Productivity increases. This feels economically naïve.. If AI lets one nurse do the work that previously required two, the default pressure in a cost-driven system is not "great, now nurses can spend twice as long with patients" It is "grea…

Exactly. If their productivity fantasies are real, the precarious (and already very anti-worker) balance between capital and labor immediately disintegrates. Serious solutions to this would look like nationalizing tech companies, mandating shorter work weeks, seizing the assets of the oligarchs and redistributing them. Not... letting the invisible hand of the market sort it all out.

The industries with the highest costs - health care, housing, education - are the industries most heavily interfered with by the government.

The industry with an absence of government interference, software, has seen prices drop to zero.

Re: What will our economic future look like?

#276

Post by win311fwg »

greedo wrote: post #235
arrowleaf wrote: post #185

Earlier quoted context omitted.

No? Prices are market-driven in our society, not necessarily a function of labor costs. In the very long-term best case scenario, the increased profits going to the company from these efficiency gains may encourage more competitors to pop up, and either drive prices down or offer more for what you pay.

Healthcare costs (what I assume you mean by prices) are the least market-driven items in the US economy. And as much as the medical community would have you believe, the primary driver of costs are labor costs. If we had twice the number of doctors, PRNs, PAs, and nurses, their annual income would drop dramatically. But since they're constrained by a guild system, it's not going to happen.

> If we had twice the number of doctors, PRNs, PAs, and nurses, their annual income would drop dramatically.

Yes, but the parent is saying that the middlemen will still charge the patients the same and pocket the difference. The patients have already shown what they are willing to pay. There is no reason to charge them less, even if your labor costs are now lower.

Theoretically competition will eventually squeeze the middleman, but it's not exactly straightforward to build a hospital on every street corner like you can a restaurant. There is somewhat of a natural monopoly there. Maybe less so for basic clinic care, but where the infrastructure needs are complex...

Re: What will our economic future look like?

#277

Post by WalterBright »

JacobiX wrote: post #67
simianwords wrote: post #52

Earlier quoted context omitted.

> This feels economically naïve.. not really. almost all technological processes have increased the quality of the service.

Air travel is a good counterexample here: technology made airlines far more productive, but much of the gain went into lower staffing, higher throughput, and cost cutting not a better passenger experience

If you were right, the airlines would be highly profitable.

They aren't.

Where the gains went are lower ticket prices.

Re: What will our economic future look like?

#279

Post by WalterBright »

SoftTalker wrote: post #223
professoretc wrote: post #181

Earlier quoted context omitted.

If you want to know what flying first-class 50 years ago was like (and you live in southern California, and you have money to burn) you can try the Panam Experience ( https://panamexperience.com/ ). It's a replica of a Panam 747, together with a "crew" in period-correct costumes, that tries to recreate the entire experience of flying in the 1950s. (Bearing in mind that the plane is a replica, located on a soundstage.…

That sounds a bit weird, the 747 didn't enter commercial service until 1970. A 1950s flight experience would have been on something with piston engines and propellors, like a DC-6 or a Super Constellation. Noisy, turbulent, and not particularly safe by modern standards.

I flew in piston airliners long ago. They fly low and slow, and barf bags are supplied for a reason (low altitude means lots of turbulence).

Today's airliners fly high where the air is smooth, they've gotten very good at avoiding turbulent weather, and there are automated damping systems. The barf bags are still there, but I've never seen anyone use one.

The cool thing about piston airliners, though, is the the engine start.

Re: What will our economic future look like?

#280

Post by pembrook »

ummonk wrote: post #225
pembrook wrote: post #124

This could be the most cringe main-character-syndrome thing I've ever seen produced by a company in the history of silicon valley. And the people treating this as serious economic forecasting rather than a marketing puff post are even more cringe. If Anthropic truly believed LLMs were going to raise GDP growth to 8% permanently (or even just a few percent), instead of going public to raise capital they could just go…

How would going leveraged on the S&P 500 because they expect long term rapid GDP growth help them with short term cash flow to invest in AI training that will enable that rapid GDP growth?

Because the market is forward-looking, and brings all future cashflows to the present.

If it became clear by 2027 that GDP growth would permanently reach 15% (I didn't make that absurdly stupid chart, they did), S&P 500 valuations would immediately 100X or more.

They could take out a credit line against those gains and have unlimited money.

Wait...are you suggesting those predictions might be so unrealistic that its stupid to even publish them? I'm shocked!

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