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The dead economy theory

owenmcgrann.com

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Re: The dead economy theory

#501

Post by HoldOnAMinute »

Animats wrote: post #248

India has the problem with farming that the US is starting to have with AI. Farming in India is still far too labor intensive by world standards. 43% of workers still work in agriculture. [1] For the US, that number is under 2%. China is at 22% as of 2023, and dropping steadily. This inefficient agricultural system is not by accident. It is supported by heavy subsidies. Attempts to cut the subsidies resulted in riots…

System set in place

to slow migration from farms

cities can't absorb

Re: The dead economy theory

#502

Post by movpasd »

This article puts into words a lot of things that had been on my mind as missing in AI discourse. Most significantly, actually considering the _systemic consequences_ of the promised AI future, how it interacts with political economy, an actual critical look (instead of accepting the "Western meta-narrative of modernity" at face value).

And maybe more importantly, it articulates really clearly how damaging the restructuring of the economy by AI moguls and the tightening of the capital–political feedback loop can be, even (maybe _especially_) if the returns of AI do not materialise as promised.

There is plenty of disorganised diffuse anti-AI sentiment. If intellectuals are able to get together behind a common cause, there might be a political movement in the making.

Re: The dead economy theory

#503

Post by 01100011 »

AI likely won't replace all jobs though. Hey, the progress in robots is great, but we're decades away from a robot HVAC tech who can crawl on an unfamiliar roof and maintain a patched-together system from 20 years ago. So like, there's that.

Then the other half of the puzzle is just techofetishists having a broken world model. If you replace even 25% of the jobs you will find AI companies taxed into the dirt to pay for UBI or social services. The government will step in and manufacture jobs. The techbros can clutch their Ayn Rand books until their fingers bleed but their fantasy land of the unfettered ubermensch is simply delusional.

Re: The dead economy theory

#504

Post by pron »

There is certainly a huge problem with displacing labour in multiple industries at the same time, but the economic story told here in "three turns" is different. When productivity rises costs drop, but because of competition, almost the entire gain has to translate not to increased margins but to reduced prices. Paul Krugman recently used this to explain the large disparity between growth in GDP as normally measured in fixed prices (i.e. inflation-adjusted to consumer prices in some fixed year) and growth in GDP as measured in PPP, i.e. when adjusted to consumer prices in every year. If making computers, say, becomes much more productive, the growth in productivity in, say, 1980 prices, seems very large, but in PPP is not only smaller, but the beneficiaries aren't computer manufacturers but anyone who uses computers.

Of course, lower prices don't solve your problems if you're unemployed. Demand, indeed, drops if many people are unemployed, which pushes prices further down, but this time across the board, not just in the more productive industries - a recession.

Re: The dead economy theory

#505

Post by movpasd »

alex_young wrote: post #53

Why is this time different? 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? If company A decides they just want the same slice of the market they have now and can fire half of their employees and pocket $$$, can't company B hire the same workers and compete harder…

You're assuming that the free market will do what it's meant to do. But there is also a reality that there are plenty of structural market failures in the economy that arise from existing capital endowments, regulatory capture, and just the permanent movement of equilibrium in the social system. The point is that the state of the economy as a whole is path-dependent. The article, in my reading, is a warning that the inertia accumulated from this current AI hype cycle might push us into the watershed of an undesirable steady state, where there simply is no capital available for new entrants.

Re: The dead economy theory

#506

Post by SecretDreams »

pron wrote: post #504

There is certainly a huge problem with displacing labour in multiple industries at the same time, but the economic story told here in "three turns" is different. When productivity rises costs drop, but because of competition, almost the entire gain has to translate not to increased margins but to reduced prices. Paul Krugman recently used this to explain the large disparity between growth in GDP as normally measured…

> Of course, lower prices don't solve your problems if you're unemployed. Demand, indeed, drops if many people are unemployed, which pushes prices further down, but this time in a way that can lead to a recession.

This is the major risk right now.

I think we'll need to strongly look at UBI and a star trek esque future or, barring that, something more like a star wars esque future..

Re: The dead economy theory

#507

Post by npilk »

dualvariable wrote: post #155

The first bit is just a restatement of the "paradox of thrift": https://en.wikipedia.org/wiki/Paradox_of_thrift If every business cuts headcount and costs, then you overall get a contraction in the economy and high unemployment and a recession. Everyone's spending is someone else's salary and revenues. Couldn't get through the rest of it because it was a bunch of overly verbose human-slop writing. I think the bigger…

Human-slop is a new one for me. How would you define it? Low quality work written by a human? Human writing that sounds like an LLM? Something else?

Re: The dead economy theory

#508

Post by agumonkey »

ekidd wrote: post #127
alex_young wrote: post #53

Why is this time different? 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? If company A decides they just want the same slice of the market they have now and can fire half of their employees and pocket $$$, can't company B hire the same workers and compete harder…

> 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,…

Has anybody written about this ? in fiction or as report even. It seems obvious the current techbros are only thinking about a radical shift where labour changes meaning and human societies are irrelevant for those who owns datacenter and have pocket deep enough to buy the rest when people can't sustain their own lives.

Re: The dead economy theory

#509

Post by bbor » 

  The humans are still there, scrolling, but the thing they’re scrolling through has become a performance staged by machines for an audience that hasn’t yet realized the show isn’t for them.
That is a gross mischaracterization of the bot situation, dropping absolute loads of essential nuance on the ground for a simple "50/50" number. Sorry if that sounds pedantic, but I find this to be insanely important; if you think fake news is bad now, wait until literally any other human might just be a bot so you can dismiss their points and/or perspective out of hand.

Re: The dead economy theory

#510

Post by m463 »

Animats wrote: post #248

India has the problem with farming that the US is starting to have with AI. Farming in India is still far too labor intensive by world standards. 43% of workers still work in agriculture. [1] For the US, that number is under 2%. China is at 22% as of 2023, and dropping steadily. This inefficient agricultural system is not by accident. It is supported by heavy subsidies. Attempts to cut the subsidies resulted in riots…

I liked reading "The Box" about the transition to container shipping.

It was interesting to see this totally-unrelated-to-our-times process from the outside.

From our place in time, container shipping is obvious.

At the time, to people who wanted to ship something, it was ridiculously hard and expensive and risky.

If you were shipping something from cleveland to paris, you might just give up.

Say you were shipping alcohol - only part might arrive, the rest would disappear.

The shipping industry had all KINDS of forces at work to keep the status quo. trucking companies, trains, shipping companies, freight forwarders, longshoremen, stevedores, unions, people with older non-container boats, etc.

and they didn't want standards.

https://en.wikipedia.org/wiki/The_Box_(Levinson_book)

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