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The dead economy theory

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Re: The dead economy theory

#921

Post by peder »

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…

> 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?

Because if everyone is doing the same, then it's just brutal competition. Margins will squeeze, and eventually very lean companies will become the norm. In time, this means that the pool of information workers will change tremendously.

Re: The dead economy theory

#922

Post by checker »

momoschili wrote: post #757
checker wrote: post #560

Earlier quoted context omitted.

I agree in the short term. But in the long term, the owners of the compute will become disgustingly rich without a wealth tax, nationalization, or local AI becoming competitive and ubiquitous. There are still problems to solve; the alternative is an absolute oligarchy.

what do you mean short term? We aren't even in the short term yet (has the AI revolution truly begun?) and the owners of compute are already disgustingly rich.

I agreed that AI will enable entrepreneurship but yes everyone will continue to lose ground to the owners of compute.

Re: The dead economy theory

#923

Post by lumost »

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…

The author’s implied argument is that capital control’s the entrepreneurship game already.

There is only 1 top law firm, financiers of law firms have no interest in starting a race to the bottom. Foundation model labs will take a significant portion of the value, the remainder will be captured by entrenched monopolies.

Re: The dead economy theory

#924

Post by kevlened »

RandomLensman wrote: post #820
halapro wrote: post #807

Earlier quoted context omitted.

I'm not buying this argument at all. What jobs are available to humans if AI can do it all? I foresee everyone paying Anthropic to do anything . The only jobs left are manual jobs at small scale (think waiters, cleaners, nurses), but only because robots still aren't good enough. LLMs have shown us that all the jobs we once thought were safe (creative, coding) are really not safe at all. Even if it results in AI slop,…

If AI could do it all, why would there be any firm if AI could operate itself, too, then?

One argument may be that ownership is the last role for a human in a business. The firm exists to show ownership of an AI and provides a mechanism for managing its proceeds.

Re: The dead economy theory

#925

Post by mplanchard »

hammock wrote: post #908
easyThrowaway wrote: post #785

Earlier quoted context omitted.

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".

Haven’t heard that meme, but it seems like you could replace “AI” with “civilizational striving/class struggle” and extend it across the whole of human history

Of course! This is just class consciousness. But AI does potentially represent a sea change in the ability of the capital class to make labor superfluous. Considering AI outside of the context of the eternal class struggle risks missing the forest for the trees.

Re: The dead economy theory

#926

Post by mplanchard »

My_Name wrote: post #784

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…

> Sure, you may get universal basic income…

This is the only point I disagree with. Given human history, it’s much more likely that you wind up in a slum, dying of dysentery. Or the third generation trapped in a trailer park cooking meth to get by. Or, maybe, if you’re lucky, being a cleaner, chauffeur, or cook for one of the wealthy.

Re: The dead economy theory

#927

Post by 9rx »

CM30 wrote: post #89

I think the thing companies forget is that a lot of them can't remain functional if a shrinking percentage of the population can afford their products. Yes, you can try and appeal to the rich and sell products/services aimed at their needs. But does that work for most companies? I'd say no. The rich won't buy millions of food items or works of fiction or go to every service available in real life. So, many of those c…

> I think the thing companies forget is that a lot of them can't remain functional if a shrinking percentage of the population can afford their products.

Why not? Apple, for example, had billions upon billions of dollars in cash. Think about that: That means they gave billions upon billions of dollars worth of stuff to people and never got back anything in return. And there is no sign that they ever plan to get anything in return. They are already quite happy to give their stuff away for free.

And why wouldn't they? When you give people stuff for free, they put you on a pedestal and treat you like a king. Those who lead Apple get to do things and get away with things you and I can only dream of. That's the appeal of still doing it even though you don't get any economic return. Social return is what actually starts to matter once your basic needs are met.

Re: The dead economy theory

#928

Post by majormajor »

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…

> I foresee a wave of entrepreneurship coming. AI will empower more people to provide useful services directly to other people, with less middlemen and menial work, and more direct problem solving.

Why doesn't this extend one step further? Many of those "service provider" people no longer are needed? If you're a consultant for domain X, and you used to work at Big Consulting, and they fire you to replace you with AI... soon the customer will hire neither your new provider, or Big Consulting, and just use AI directly, if it's that good.

Certain professions have legal/regulatory protections, but thesis (a) "entrepreneurs replace big incumbent service providers" doesn't seem necessarily more stable compared to thesis (b) "the people who need the knowledge have their AI do it themselves". In order for (a) to be true without (b), the AI tools themselves have to be good enough to make the concentration of specialized knowledge and institutional expertise/history no longer critical; but not good enough that the would-be-entreprenurial-middleman's own specialized knowledge can't also be replaced.

Re: The dead economy theory

#929

Post by projectazorian »

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? And ultimately, if AI gets to be so good that it can competently do a lawyer's job, what reason do big law firms even have to exist? Who is going to hire them if they can just hire AI? The companies that are rushing so hard to replace their workers don't realise that AI is eventually going to replace them too.

Lawyers will be fine IMO, they’re a government protected guild whose key outputs have to be human certified, and where error has real consequences + can threaten licensure or lead to civil/criminal liability in the worst cases.

Not to mention that AI dramatically lowers the barrier to entry for filing lawsuits. Courts are already being inundated by pro se filings, mostly from nutters as usual, but some of which will have real merit. And entrepreneurial litigators will eventually figure out how to harness AI properly, some probably already have. All of those lawsuits will require lawyers to handle them. And this is without getting into the complex IP issues that AI raises.

I’d say that there might be some short term dislocation but demand for lawyers is about to go up, not down. Paralegals without specialized knowledge may be in for a hard time though.

Re: The dead economy theory

#930

Post by projectazorian »

majormajor wrote: post #928
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…

> I foresee a wave of entrepreneurship coming. AI will empower more people to provide useful services directly to other people, with less middlemen and menial work, and more direct problem solving. Why doesn't this extend one step further? Many of those "service provider" people no longer are needed? If you're a consultant for domain X, and you used to work at Big Consulting, and they fire you to replace you with AI.…

> If you're a consultant for domain X, and you used to work at Big Consulting, and they fire you to replace you with AI... soon the customer will hire neither your new provider, or Big Consulting, and just use AI directly, if it's that good.

Most consulting is not some flashy 25 year old Ivy grad putting together a slide deck that says “fire people,” it usually involves either gathering (or providing) extensive domain knowledge much of which is in forms not legible to AI (or at least in forms that can’t be encapsulated at a context level that doesn’t cause unacceptable quality drops.) Often there are compliance mandates involved that have real teeth. So again I think there will still be plenty of humans involved.

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