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The dead economy theory

owenmcgrann.com

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Re: The dead economy theory

#91

Post by spondelkryp »

>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 automate workers out of labor, who are we selling these AI services to?

I guess if global population drops by 80-90℅ you suddenly get a "sustainable" economy, as everything is repriced the economy of scale needs a much smaller scale.

(Not speculating this is a plan, just a thought that occurred to me when reading about horses example)

Re: The dead economy theory

#92

Post by Miner49er »

parliament32 wrote: post #19
Miner49er wrote: post #3

> Turn three: the company that fired its workers to save money discovers that its customers were, in aggregate, other companies’ workers. Revenue growth stalls. The AI subscription that was supposed to be an investment in efficiency turns out to be a contribution to the destruction of its own market. For some companies yeah, but this is why companies are switching to consumption based pricing - so they can charge AI.…

If the business process is fully AI-able, why wouldn't it just be implemented by the next AI in line? I'd argue the only companies to survive will be the ones with either a human input or a human output. Everything else is effectively worthless now.

For the same reason it doesn't happen with humans.

Even for AI, it's probably better off paying another AI that is specializing in something and done all the work rather then reimplementing everything from the ground up.

Re: The dead economy theory

#93

Post by zozbot234 »

thierrydamiba wrote: post #83
alecco wrote: post #78

> Every investor presentation of an AI agent “doing the work of ten analysts” is telling you the same thing: the product is labor replacement. I have a solution for that. Let's use AI to replace all these corporations who just lost their big moats. Conveniently, they just laid off a bunch of people with all the critical know-how and I bet they are very willing to just give it up out of spite.

I’m not sure this is so true. Anthropic and OpenAI are both heavily hiring for humans in enterprise roles. Safe to say they are using AI as much as possible and they need humans too.

They'll just order those humans to train their own future overlords.

Re: The dead economy theory

#94

Post by idopmstuff »

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?

That depends if AI gets to the point where it can fully replace workers, as opposed to just augmenting them. I heard Alex Imas on a podcast recently talking about how a SWE can be running 10 agents to be 10x as productive, then that SWE is more valuable so firms should want to hire more SWEs and pay them more.

That works for a while, but what if AI gets to the point where it can manage the 10 agents as well as the SWE? Of course you could say the SWE can now manage 10 agents who each manage 10 agents so he's even more valuable, but that has to break down eventually. You don't need 1,000 SWEs each managing 10,000 agents - you hit a bottleneck in the ability to give them work fast enough (even if you need the SWE at the top at all).

I think it's easier to think of from the perspective of blue collar labor. It's further out there time-wise, but let's assume we get a humanoid robot that can do any labor a human can do. It costs $25,000 and maybe a couple grand a year to operate. Works 20 hours a day when it's not charging.

The construction worker it replaces isn't going to start managing a team of robots construction robots - there's already a GC doing that, and you can't scale building nearly the way you can scale writing code because of physical constraints. When the robot I've described exists, a huge swathe of the population is going to be unemployed. There's no competitor to hire them because the competitors just get robots too.

Re: The dead economy theory

#96

Post by autoexec »

bryanrasmussen wrote: post #73
hexator wrote: post #27

Earlier quoted context omitted.

> not only is the premise wrong The blog post offers several studies as evidence, where's yours?

the studies are set in a society in which the main way of existing in society and contributing to it is via employment. Some generations ago females in this society were regularly without jobs but were "homemakers", in that time if one were not a homemaker and a female how was the person's feeling of well-being? Reports conflict about that, but in that time of course females were often kept from employment by being h…

> the studies are set in a society in which the main way of existing in society and contributing to it is via employment.

That's the one we live in though, so I guess that seems fair

Re: The dead economy theory

#97

Post by autoexec »

spongebobstoes wrote: post #15

this whole blog post is basically "people need jobs to be happy, so we should design our society such that they need jobs" not only is the premise wrong, but forcing people to work is not a good or ethical way to address this problem most people like the social aspect of work, but not being beholden to their boss we can give people meaning, community, culture, growth, without relying on employment and money we can do…

> we can give people meaning, community, culture, growth, without relying on employment and money

I agree, but those people will still need to eat and pay rent so I guess they're stuck either working or dying. People will always find something to do with themselves. You don't need to encourage people to explore their own passions much when they're able to do it. The need for jobs isn't really an issue as much as the need for money is.

Re: The dead economy theory

#98

Post by 3fff »

yyyk wrote: post #63
3fff wrote: post #50

Earlier quoted context omitted.

"Ultimately, we'll reach an economy which objectively does not need humans and everyone will know it. He needs to face that reality and overcome it, and not hide behind temporary and dubious estimates." Who are you projecting your views with such force on others? What have you achieved? I bet you are nobody of substance.

We can all read the news and see AI constantly improving at a very quick pace. What's the barrier AI can't improve beyond? One that would last a lifetime? By all means (since you're such an accomplished person), explain yourself.

Bla-bla-bla.

If you are so insistent on this then in the short-run the only thing to do is to concentrate all your money on firms that are pouring immense money into AI projects.

Have you done that?

You sound like another bozo many on here that cant a) think for themselvs b) think deeply independently because they lack the pre-requisite knowledge and mental models to do so.

Re: The dead economy theory

#99

Post by idle_zealot »

alecco wrote: post #78

> Every investor presentation of an AI agent “doing the work of ten analysts” is telling you the same thing: the product is labor replacement. I have a solution for that. Let's use AI to replace all these corporations who just lost their big moats. Conveniently, they just laid off a bunch of people with all the critical know-how and I bet they are very willing to just give it up out of spite.

> corporations who just lost their big moats

Sure, if you assume that they've used their immense wealth to entrench themselves by paying for quality labor. If you take note of the myriad less-competitive ways they've ensured dominance and guaranteed profits rather than re-investing in their products or services then you will see that you have a large moat to cross yet.

Re: The dead economy theory

#100

Post by interstice »

treis wrote: post #4

This isn't how the economy works at all. We're not all unemployed because farms mechanized. We're not all unemployed because factories automated. We won't all be unemployed if AI takes over white collar work.

Each time people found something else to do that someone would pay them for. This doesn't automatically mean there is an infinite supply of that - unless you believe in it as some kind of fundamental law.
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