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The dead economy theory

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Re: The dead economy theory

#781

Post by andsoitis »

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.

I can think of many reasons why people have fewer children for reasons other than pessimism about the future.

One can also argue that, besides lack of contraception, pessimism about survival of your offspring drove some amount of creating descendants.

Re: The dead economy theory

#782

Post by discodonkey »

This article, like Citrini research's scenario before it, misses much of the economics.

AI is unlikely to be as revolutionary as is presumed. It's definitely going to lead to increased productivity, and will probably render some jobs redundant, but it's unlikely to have a significant effect on wages/employment [1], and as of now there isn't one [2]. When it does effect workers (which is still uncommon), AI mostly leads to task reallocation.

Right now, AI's massive valuations seem more like a reflection of the typical speculation that accompanies major technological innovations (thinking IoT, railroads, automobiles) than of its real economic value [3].

The "dead economy" scenario would only be possible in the event of extraordinary, and extraordinarily-unlikely levels of AI-driven unemployment.

[1] https://economics.mit.edu/sites/default/files/2024-04/The%20...

[2] https://www.nber.org/papers/w33509

[3] https://www.foreignaffairs.com/reviews/capsule-review/2003-0...

Re: The dead economy theory

#783

Post by ozim »

unusualmonkey wrote: post #741
palmotea wrote: post #737

Earlier quoted context omitted.

> If AI suddenly makes it possible for a law firm to be run with a skeleton crew, then what's stopping all those people you fired from starting new law companies, where AI also does most of the work, and competing with you for the same market? Money. They won't have the money to pay for the tokens, or the best models, because they'll be unemployed. They also won't have the connections to get the clients. When you're…

Sorry that's no realistic. People start businesses, including law firms, all the time with little to no capital. Assuming token costs will be prohibitive assumes: A) tokens will be really expensive and B) you need to fund tokens before you have revenue. Your asserting AI makes the economy more capital intensive, when I think you'll see in practice it's the opposite.

People start businesses all the time yes.

But like 80% shuts down before reaching 2 years as they run out of money.

Re: The dead economy theory

#784

Post by My_Name »

Not many people see that the end result is that when ordinary people stop earning money, and stop buying products, all the money will be used purely for B2B transactions.

Money will still exist, but people will not see hardly any of it. To break out of being just a person and start a business you will still need money, but be unable to get any.

Thus, the endgame is revealed. You don't need to form a dictatorship, you don't need to have a war, you just need to remove all real choice from people, and then you have complete control over what they are able to do by simply making it cost too much. There will be a firewall between ordinary people, and the people who own businesses where all the money sits.

We see the start of it already, when just two individuals have a combined wealth on the order of a trillion dollars. That inequality is not going down, only upwards.

Sure, you may get universal basic income, have a nice house, car (food, clothing etc of course) but there will be a massive air gap between what you could obtain in a lifetime and the minimum you would need to move from that situation into the world where the real money is.

Corporate saving rose by nearly 5 percentage points of global GDP between 1980 and 2013, and since the 2000s the corporate sector flipped from net borrower to net lender in many advanced economies — the "corporate saving glut." Much of it just piled up as cash reserves. Currently, 10–15% of GDP per year flows into corporate retained earnings never to leave. Think about the long term ramifications of that for you and your purchasing power.

AI didn't make this situation, it is just speeding it up.

Re: The dead economy theory

#785

Post by easyThrowaway »

palmotea wrote: post #737
iliaxj wrote: post #457

The article doesn't seem to take his train of thought quite far enough. If AI suddenly makes it possible for a law firm to be run with a skeleton crew, then what's stopping all those people you fired from starting new law companies, where AI also does most of the work, and competing with you for the same market? And ultimately, if AI gets to be so good that it can competently do a lawyer's job, what reason do big law…

> If AI suddenly makes it possible for a law firm to be run with a skeleton crew, then what's stopping all those people you fired from starting new law companies, where AI also does most of the work, and competing with you for the same market? Money. They won't have the money to pay for the tokens, or the best models, because they'll be unemployed. They also won't have the connections to get the clients. When you're…

It has become a meme at this point but this sentence still stands: "The underlying purpose of AI is to allow wealth to access skill while removing from the skilled the ability to access wealth".

Re: The dead economy theory

#786

Post by 5701652400 »

iliaxj wrote: post #457

The article doesn't seem to take his train of thought quite far enough. If AI suddenly makes it possible for a law firm to be run with a skeleton crew, then what's stopping all those people you fired from starting new law companies, where AI also does most of the work, and competing with you for the same market? And ultimately, if AI gets to be so good that it can competently do a lawyer's job, what reason do big law…

[dead]

Re: The dead economy theory

#787

Post by 5701652400 »

bang1a wrote: post #561
iliaxj wrote: post #457

The article doesn't seem to take his train of thought quite far enough. If AI suddenly makes it possible for a law firm to be run with a skeleton crew, then what's stopping all those people you fired from starting new law companies, where AI also does most of the work, and competing with you for the same market? And ultimately, if AI gets to be so good that it can competently do a lawyer's job, what reason do big law…

By your logic, aren't the entreprenuers also middlemen?

straight to the point. users will do it themselves, thanks to God-like Google Gemini super-app that does everything and owns whole internet.

Re: The dead economy theory

#788

Post by qsera »

palmotea wrote: post #745
unusualmonkey wrote: post #741

Earlier quoted context omitted.

Sorry that's no realistic. People start businesses, including law firms, all the time with little to no capital. Assuming token costs will be prohibitive assumes: A) tokens will be really expensive and B) you need to fund tokens before you have revenue. Your asserting AI makes the economy more capital intensive, when I think you'll see in practice it's the opposite.

> Sorry that's no realistic. People start businesses, including law firms, all the time with little to no capital. You're clinging past: what you is true when human capital counts for something, but what happens when it doesn't? Where the party who can spend the most tokens on the case wins (or has a much greater chance of success)? Law might not be the best example of that, but (under current trends) a lot of areas…

> what happens when it doesn't?

It will never happen. Capitalism works when consumers can choose the best service provider. When there is only one universal service provide (AI), behind various "fronts", it would be catastrophic.

And all the consumers lose catastrophically.

So there should be at least some human component to differentiate between the various "AI" providers.

Re: The dead economy theory

#789

Post by raincole »

unusualmonkey wrote: post #741
palmotea wrote: post #737

Earlier quoted context omitted.

> If AI suddenly makes it possible for a law firm to be run with a skeleton crew, then what's stopping all those people you fired from starting new law companies, where AI also does most of the work, and competing with you for the same market? Money. They won't have the money to pay for the tokens, or the best models, because they'll be unemployed. They also won't have the connections to get the clients. When you're…

Sorry that's no realistic. People start businesses, including law firms, all the time with little to no capital. Assuming token costs will be prohibitive assumes: A) tokens will be really expensive and B) you need to fund tokens before you have revenue. Your asserting AI makes the economy more capital intensive, when I think you'll see in practice it's the opposite.

> People start businesses, including law firms, all the time with little to no capital.

Those people are usually very talented and work 16/7. And they need to convince other similar people to work for them, usually at a lower-than-market rate.

The premise here is "talented humans working hard" will stop being a valuable thing due to AI.

Re: The dead economy theory

#790

Post by motbus3 »

I agree with most of it, but I don't think these three turns are the end of it.

We see that as soon as companies can, they will drop support for end consumers like us and focus on B2B.

The only way to sustain some level of revenue is by turning into aggression levels which is ineffective, and obviously, imoral and unacceptable.

The way things are going we all be dead by hunger. This seems by design made up to seem unavoidable.

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