The dead economy theory • Hacker News Board

Re: The dead economy theory

#711

Post by kelnos » Sat, May 30, 2026, 5:09 AM UTC

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…

If AI actually succeeds at its promise, it won't be 99% of engineers and accountants, it will be 99% of nearly every profession that doesn't require physical labor. And if the AIs figure out how to cheaply build reliable human-like robots, that's it for the physical labor jobs too.

Our society is not set up to function with 99% unemployment (even 99% unemployment in "only" non-physical-labor jobs), even in an optimistic post-scarcity environment.

Now, my opening "if" is a really huge "if", so...

Re: The dead economy theory

#712

Post by 9rx » Sat, May 30, 2026, 5:11 AM UTC

kelnos wrote: post #683

Aurornis wrote: post #441

Earlier quoted context omitted.

The horse analogy fell very flat for me. Those horses were bred and maintained as single purpose machines. There isn’t really an analogy to humans with self-determination and broad abilities, other than they both have a heartbeat.

In a way I think we've been seeing the horse analogy play out for a while, with declining birth rates in developed countries. When people are pessimistic about the future, they have fewer children. Perhaps it's not as dramatic as the decline in horses, but I think there's a bit of a parallel there.

> When people are pessimistic about the future, they have fewer children.

But also, statistically, the richer you are, the fewer children you have. Why do you think those who are seemingly in the best position to be optimistic about the future are those most pessimistic about it? It is quite counterintuitive on the surface. Is it because the rich feel they have nowhere else to go, whereas those who are poor can still envision becoming rich themselves someday, giving them hope about a brighter future?

Regardless of the exact mechanics, the human state is self-correcting. Being rich is unsustainable without a lot of people around you. When births decline too much, those who are rich will become poor, and thus will start producing more children again. Humans will not echo horses based on this.

Re: The dead economy theory

#713

Post by doctorpangloss » Sat, May 30, 2026, 5:11 AM UTC

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…

you: insurmountable cost structure for LLM providers

also you: only three companies make LLMs people pay for

sounds like a 15 minute phone call to form a cartel is all that is between them and profitability? less money has been made on more complex schemes.

Re: The dead economy theory

#714

Post by knivets » Sat, May 30, 2026, 5:15 AM UTC

This is not a serious analysis. No mention of open source LLMs and their impact on american AI companies. There’s also no evidence that LLMs can make significant scientific progress on their own.

Re: The dead economy theory

#715

Post by majormajor » Sat, May 30, 2026, 5:18 AM UTC

kelnos wrote: post #674

phillipcarter wrote: post #531

Earlier quoted context omitted.

> What on earth do you do with that many devs on a project like Messenger? I mean, really? Over 1 billion monthly users and over 100 billion messages a day, much of which is multimedia. Plus ads, payments, business integrations, a developer platform... ...you need quite a lot of devs for that, even if you freeze all feature development forever. > Musk chopped an awful lot of headcount at Twitter, right, and proved it…

> Over 1 billion monthly users and over 100 billion messages a day, much of which is multimedia. Plus ads, payments, business integrations, a developer platform... Right, but it's already doing that, and runs just fine, from what I understand. The developers don't have to sit there pounding the enter key on their keyboards over and over all day to keep the messages flowing. Is the user count and message rate growing…

> Right, but it's already doing that, and runs just fine, from what I understand. The developers don't have to sit there pounding the enter key on their keyboards over and over all day to keep the messages flowing.

> Is the user count and message rate growing so quickly that people are constantly needing to make architectural changes and performance improvements in order to keep it scaling up? Does adding new capacity need constant human intervention?

> Or are they adding new crazy features all the time that are genuinely challenging to implement?

> As a software developer who has worked on big distributed systems, I'm well aware that things take a lot more work than they often seem from the outside, but this strains belief.

IMO based on working on not-that-large-or-high-revenue systems, but ones where these things already applied, a bunch of it is probably a combination of three things:

* You're doing enough total revenue that a couple million a year to fund a team of engineers to try to make tiny marginal improvements in ad revenue through targeting, or new features on how to present ads, etc, can still easily pay for itself.

* You're running at a high enough scale / spending enough on resources that you can similarly justify spending millions on teams to knock more millions off your infra costs.

* You've got enough usage/users that making tiny improvements in bug rates/crashes/etc similarly results in more usage that more-than-pays-for-itself. (And the list of bugs to squash is possibly never-ending if those other groups keep changing things!)

"Why make 30M profit on 100M revenue when you can make 35M profit on 115M revenue" sorta thing.

Re: The dead economy theory

#716

Post by andsoitis » Sat, May 30, 2026, 5:21 AM UTC

throwaway27448 wrote: post #267

rootusrootus wrote: post #226

I know this isn't exactly related, so maybe a low value comment, but it itches in my mind. Years ago I talked with a recruiter at Facebook and they bragged about how many floors of developers they had working on Messenger in just one location (Seattle). What on earth do you do with that many devs on a project like Messenger? I mean, really? I feel like in a way, AI just adds to that weird situation of overcapacity. M…

The economics of a service economy really just don't make sense. We pay way too much for software (which should trend towards zero-cost to distribute), we pay too much for ads. The value of it is inherently downstream of the real economy, which is about making and distributing goods and stuff people actually need to live. Especially a company like facebook only provides a glorified forum, which should be free or coll…

> The economics of a service economy really just don't make sense.

> …real economy, which is about making and distributing goods and stuff people actually need to live

I don’t know about you, but I depend on services every day in order to live.

Re: The dead economy theory

#717

Post by kannanvijayan » Sat, May 30, 2026, 5:23 AM UTC

fragmede wrote: post #429

throwaway27448 wrote: post #267

Earlier quoted context omitted.

The economics of a service economy really just don't make sense. We pay way too much for software (which should trend towards zero-cost to distribute), we pay too much for ads. The value of it is inherently downstream of the real economy, which is about making and distributing goods and stuff people actually need to live. Especially a company like facebook only provides a glorified forum, which should be free or coll…

Start by understanding how to price a product. Say a chair. From first principles, you'd take however much wood it takes, plus however many hours it took you to turn that wood into a simple chair, then add in whatever you consider a reasonable profit margin, and that's how much you should sell the chair at. Which is totally and utterly wrong. You throw away that number, and look at how much other chairs are selling f…

The business plan is really different depending on your starting capital.

If you have none, don't bother you can't afford the wood.

If you have a little, maybe your approach above is what makes sense.

If you have a lot, you might start looking at ways to lock down the chair distribution market within a region by maybe buying up some of the major warehousers - a bit of the old vertical integration. Maybe use some "free speech" of the financial kind directed towards some politicians to mandate that all workplaces have a certain minimum ratio of chairs to people.

The pricing strategy will be different for each approach.

Re: The dead economy theory

#718

Post by black_puppydog » Sat, May 30, 2026, 5:28 AM UTC

ticulatedspline wrote: post #603

hughw wrote: post #592

The assumption is that if you send people checks, they’ll find meaning in hobbies and community. They’ll paint. They’ll garden. They’ll finally write that novel. The author suggests it will fail because we'll all use drugs and booze and commit suicide. But it works for retired people. They love it. Is this why we all have to work 9 to 5 drudge jobs? Because we can't handle the freedom?

Good bit of survivor bias in the retired population. If you can put in 30-40 years of full time work and then afford to retire you probably don't have a propensity for substance abuse.

You've clearly not been hanging out with French retirees.

Re: The dead economy theory

#719

Post by beej71 » Sat, May 30, 2026, 5:36 AM UTC

dtang2718 wrote: post #287

minimal_action wrote: post #236

I have led AI integration in a university faculty. From this experience I can conclude that good work is only produced when humans are in the loop. It's not a technical barrier, but a categorical one. "Good" work is defined by humans and our judgment is irrational but rooted in our evolutionary survival needs. In other words, AI don't have human motivation by definition. Without human in the loop, the top most motiva…

Agree with this. Even in software, the point of using AI is to produce something that a human finds valuable. There are many ways to use AI to build things faster, but a human has to be in the loop to point things in the right direction.

I keep thinking of the infinitely scroll GenAI app that might replace social media...

Re: The dead economy theory

#720

Post by 9rx » Sat, May 30, 2026, 5:40 AM UTC

beachWholesaleS wrote: post #217

Can someone point me to credible evidence/examples of productivity increases from AI spending, among non-ai providers? And if you'd bear with me, I'm asking for productivity in the sense of "accelerating the businesses pursuit of its existing goals" rather than quantity. I think that in most sane business's, output quantity bereft of output quality is utterly useless in said pursuit.

> I'm asking for productivity in the sense of "accelerating the businesses pursuit of its existing goals" rather than quantity.

The current business goals around the use of AI is essentially the startup model: Throw shit into the wind to see if it sticks. Acceleration of the business goal means throwing more shit into the wind. Isn't that the same thing as quantity?