Suppose we modeled this as two separate countries:
* AI Island: just runs AI in data centers.
* Elsewhere: same as now.
Wouldn't there be gains from trade?
Sure, AI Island might be able to provide lots of cheap Internet services, but you can't eat Internet. Wouldn't they want something in exchange?
And wouldn't there still be lots of jobs in Elsewhere that can't be done over the Internet and have nothing to do with AI Island? If AI Island charges too much, they can always trade among themselves.
Inb4 the economy is just a paperclip maximizer, a hedonium maximizer, and 5 different AGIs built to maximally enrich their creators all trading with each other.
For an article that starts off asking us to examine our assumptions and not make leaps of logic, it goes on to make some absolute whopper assumptions, like that governments (Western governments especially, for some reason), won't do anything to address the problems the article is raising, that they'll instead abandon democracy entirely and resort to police and military oppression, and that massive unemployment and poverty of almost all people is something you could even keep a lid on with policing.
I've seen this idea float around r/singularity and r/collapse for years and it's probably responsible for a horrifying amount of suicides at this point.
It's not even that good of an argument. It makes some incredibly flimsy assumptions; reddit marxist priors of labor oppression being an inescapable invariant across all of human history, ultra-compliant superintelligences, a perfectly unitary elite without any desire to defect, all other societal variables staying the same somehow, etc.. It only exists because of upvote algorithms amplifying emotional action-suppressing doomer content. Really not that different from other hostile memes like QAnon.
I would really like if people stopped spreading this anti-agency garbage and actually made an effort to advocate for policy. It's something I have to give Luke Drago some points for, he actually cares about the problem rather than just saying the inevitable eternal stratification hypersuffering anti-singularity is inevitable and implying that death is preferable.
No serious economist would claim such a thing. In fact, it was all the rage a decade ago for economists to remind everyone that they - in fact - should not be looked at to do this.
> An economist is an expert who will know tomorrow why the things he predicted yesterday didn't happen today.
Did anyone ever keep track of how often economists turn out to be right about anything? I didn't, but have the feeling that it isn't much better than flipping a coin.
There's a lot of bad economics and assumptions here even if the conclusion is plausible.
Yes, an economy of robots harvesting things to serve a few masters (or they takeover themselves Terminator-style) is possible and perhaps the end game.
Isn’t it clear that the “enemy” of 99% of the people in the world (and in HN) are the ultra rich? Therefore we shouldn’t use Claude/Gemini/OpenAI?
It’s not about stopping progress, rather stopping the ultra rich getting richer and more powerful over our lives. Whether we can use claude to automate a fucking script or service is meaningless compared to that.
The dream of elon musk et al is to keep accumulating power and have non-humans serve them. They don’t want us, and as soon as they can they will replace us. But here we are giving them more power. Ridiculous
This author's writing style is too obnoxious for me to have gotten all the way through it, but the important thing is that he's wrong.
Every single economic transaction ultimately connects to people generating demand. EVERY single one. All B2B transactions included.
Sometimes this can appear to not be the case if there's a significant lag time between initial B2B transactions and some end consumer demand. That lag is bridged by hopeful investors and creditors.
The present AI buildout is an example of this. And it is not immune from the principle. There will ultimately need to be real people generating real demand somewhere in the economy in order to justify an economic return on the massive outlay.
Government expenditures are also included. Tax dollars used to pay for things are ultimately satisfying demand generated by citizens. Even, believe it or not, a deranged government blowing up random people in the Middle East. That still traces to the (perceived) security needs of some population.
The aggregate demand equation is as follows:
AD = C + I + G + NX
C = Consumer Spending
I = Investment
G = Government Spending
NX = Net Exports
What's going to happen in the future is that demand will have to shift in this equation. Remember that Investment needs to be justified by some demand created elsewhere — it is in essence the purchase of an IOU predicated on future demand that must ultimately trace down to real people. We are all broadly in agreement that Consumption will contract, as labor is progressively disempowered and capital continues to concentrate. Let's ignore NX.
The answer is that the sources of demand in the future will likely shift to, primarily, (1) demand still generated by wealthy people consuming things (e.g. mansions, yachts, rockets, ego-affirming Mars colonies) and (2) government spending that serves entire populations.
This all assumes, of course, that we continue with the present economic model, in spite of the immense human suffering and turmoil that is likely on the horizon, as we transition into a fundamentally different technological age.
Many people don't realize that the human-legible economy is not the end goal to the fate of wealth and productivity in the known universe.
The economy is human-serving and human-legible because humans are a universal bottleneck to productivity and wealth creation. Once humans are no longer this bottleneck, the economy will begin to serve other interests, as those other interests will be the source of far more productivity than humans (i.e. AI agents, robots, etc)
If people understood this they'd understand that the "permanent underclass" notion is farcical: Human capital will not be allowed to be what allows productivity to commence or halt in a future that is 1000x more efficient and fast-moving due to AI. Any AI smart enough to do such will not wait on humans to give them permission with their money.
Once the owning class owns mostly everything and* has intelligent machines that serve them, The Economy crashing will not have real consequences for them. It barely has real consequences for them already -as they have consistently ended up richer after the dot com bubble, the 2008 recession, and the covid recession.*
The coming out richer part is undeniably true, but I have doubts about the conclusion, which is something like "after oligarchs own everything, they don't need many people". Look, even the old Bell System required participation of about a third of the US population.
Oligarchs might be able to have young, fit concubines, and loyal, retainers with steel thews if there's a population of less than a third of today, but they'll have trouble maintaining their health because there will be fewer doctors and no specialists. Telegram communications might be possible, but who's going to maintain gigawatts of data centers for such a population? I'm pretty sure "AI" will slip away in such a world, but who needs waifus when real harems can exist?
What AI really seems to be posed to do is make labour a lot less valuable and capital a lot more valuable.
Running a government requires a lot of cash flow. I think its sort of inevitable that it's going to need to start coming mostly from the later and not the former.
Economy is not zero sum game [1]. The fact that someone has more, doesn't mean everyone else is worse off because of it. Many hungry african kids can look upon the people from first world and ponder the same question. "How will the rich people that have everything survive now, that with AI they will have even more" except from their perspective, we are the elon musks in their eyes.
Im getting really tired of these cloudflare anti-ddos screens. They take forever, often literally. There's another one of these that shows an anime girl, whatever that one is, it's way better.
> The Economy is not only an abstract concept, but a very twisted and perverse one as well. It once used to refer to the well-being of the masses
When?
> We already have more empty houses than homeless people, more food than we eat, and more medicine than we use, yet people die starving or untreated anyway.
10x more people die of car crashes than famine globally. And about the same die from tobacco exposure than malnutrition which is a wider net to cast.
If we just focus on advanced economies basically nobody dies of famine and less people die of malnutrition than car crashes by a long margin.
I've held this view and talked about it many times here before.
It seems like an obvious conclusion to me that the end result will be a few AI owners trading among themselves should AI develop in what seems to be likely: recursive self improvement, robotics allowing it to displace manual labor and combat.
Then the owners will be trading for land, AI tech, minerals, energy, which will likely be owned by the other AI conglomerates, and maybe the odd thing that can't be replaced by AI like human entertainers that would make up 1% of the economy.
Why do we believe that AI (if indeed we achieve human level AI) will have different outcome than the means of production or capital?
It’s a winner takes all situation. Very few will accumulate all of the wealth of world.
This time it will be more efficient than the Industrial Revolution, because not only you can produce the weapons for the meatbags to protect your wealth, you can even get rid of the meatbags and just mass produce robots to protect you.
The idea of a consumer based economy has always appeared dumb to me.
The reason why the masses should consume is to motivate them to work.
And the reason why having a large amount of people working is that human work has been producing a surplus basically since the dawn of civilization.
This surplus is partially shared but tend also to "trickle up", contrary to some weird beliefs, as can clearly be seen almost everywhere you look.
But if you imagine a sci-fi world where machines can build and do everything humans can do, the concept of a human-centric economy would be pointless.
Machines don't need to be motivated to work, they just need energy, materials and obeying to whoever controls them.
This kind of economy would be less abstract and more directly related to physics.
>The idea of a consumer based economy has always appeared dumb to me.
Ok let's play devils advocate and remove consumption from the economy. Now it's all investment.
You go to work and build an AI datacenter and then never turn it on.
You then think yourself, well if nobody is going to use it, I don't have to keep building AI datacenters! You stop building AI datacenters.
You then realize, you still have all the parts and materials to build AI datacenters, but you don't need them either.
You demolish the semiconductor fabs, since there is nothing to do with the chips.
You also remind yourself that housing is a consumer good. Construction materials are unnecessary, so you shut down the quarry mining them and demolish your house.
Now back to being a "homeless" farmer growing crops. It is time to harvest, you wake up in the morning, but you get a realization. Eating is consumption! If you don't eat, you don't have to tend the farm.
You decide to consume what's left of last year's harvest, refuse to harvest this year's crops, go back to sleep and avoid doing the backbreaking work.
A month later the harvest has spoiled on the field, your food has run out and you're starving to death, while thinking to yourself how stupid the consumer based economy is.
>Machines don't need to be motivated to work, they just need energy, materials and obeying to whoever controls them.
I don't think anyone is saying that it wouldn't be great if we didn't have to work to survive and thrive. What they are saying is, based on current trends, we are more heading for one of those scifi dystopias than star trek.
In Star Trek, also, there was a huge world war with hundreds of millions dead. WW3, which almost killed humanity, before they united and created the sci-fi utopia.
The hard part is that we don't know if we'll ever get the utopia.
Man, I really freaking hate cloudflare bot checks. I can't even access this site, which I presume is just a few kilobytes of simple static HTML with some straightforward text content. I shouldn't have to work this hard to prove I'm human, it's exhausting
91 comments
[ 5.4 ms ] story [ 77.5 ms ] thread* AI Island: just runs AI in data centers.
* Elsewhere: same as now.
Wouldn't there be gains from trade?
Sure, AI Island might be able to provide lots of cheap Internet services, but you can't eat Internet. Wouldn't they want something in exchange?
And wouldn't there still be lots of jobs in Elsewhere that can't be done over the Internet and have nothing to do with AI Island? If AI Island charges too much, they can always trade among themselves.
It's not even that good of an argument. It makes some incredibly flimsy assumptions; reddit marxist priors of labor oppression being an inescapable invariant across all of human history, ultra-compliant superintelligences, a perfectly unitary elite without any desire to defect, all other societal variables staying the same somehow, etc.. It only exists because of upvote algorithms amplifying emotional action-suppressing doomer content. Really not that different from other hostile memes like QAnon.
I would really like if people stopped spreading this anti-agency garbage and actually made an effort to advocate for policy. It's something I have to give Luke Drago some points for, he actually cares about the problem rather than just saying the inevitable eternal stratification hypersuffering anti-singularity is inevitable and implying that death is preferable.
If you want to understand the impact of AI technology on the economy, don't listen to software engineers, listen to economists.
> An economist is an expert who will know tomorrow why the things he predicted yesterday didn't happen today.
Did anyone ever keep track of how often economists turn out to be right about anything? I didn't, but have the feeling that it isn't much better than flipping a coin.
Yes, an economy of robots harvesting things to serve a few masters (or they takeover themselves Terminator-style) is possible and perhaps the end game.
It’s not about stopping progress, rather stopping the ultra rich getting richer and more powerful over our lives. Whether we can use claude to automate a fucking script or service is meaningless compared to that.
The dream of elon musk et al is to keep accumulating power and have non-humans serve them. They don’t want us, and as soon as they can they will replace us. But here we are giving them more power. Ridiculous
Every single economic transaction ultimately connects to people generating demand. EVERY single one. All B2B transactions included.
Sometimes this can appear to not be the case if there's a significant lag time between initial B2B transactions and some end consumer demand. That lag is bridged by hopeful investors and creditors.
The present AI buildout is an example of this. And it is not immune from the principle. There will ultimately need to be real people generating real demand somewhere in the economy in order to justify an economic return on the massive outlay.
Government expenditures are also included. Tax dollars used to pay for things are ultimately satisfying demand generated by citizens. Even, believe it or not, a deranged government blowing up random people in the Middle East. That still traces to the (perceived) security needs of some population.
The aggregate demand equation is as follows:
AD = C + I + G + NX
C = Consumer Spending I = Investment G = Government Spending NX = Net Exports
What's going to happen in the future is that demand will have to shift in this equation. Remember that Investment needs to be justified by some demand created elsewhere — it is in essence the purchase of an IOU predicated on future demand that must ultimately trace down to real people. We are all broadly in agreement that Consumption will contract, as labor is progressively disempowered and capital continues to concentrate. Let's ignore NX.
The answer is that the sources of demand in the future will likely shift to, primarily, (1) demand still generated by wealthy people consuming things (e.g. mansions, yachts, rockets, ego-affirming Mars colonies) and (2) government spending that serves entire populations.
This all assumes, of course, that we continue with the present economic model, in spite of the immense human suffering and turmoil that is likely on the horizon, as we transition into a fundamentally different technological age.
The economy is human-serving and human-legible because humans are a universal bottleneck to productivity and wealth creation. Once humans are no longer this bottleneck, the economy will begin to serve other interests, as those other interests will be the source of far more productivity than humans (i.e. AI agents, robots, etc)
If people understood this they'd understand that the "permanent underclass" notion is farcical: Human capital will not be allowed to be what allows productivity to commence or halt in a future that is 1000x more efficient and fast-moving due to AI. Any AI smart enough to do such will not wait on humans to give them permission with their money.
The coming out richer part is undeniably true, but I have doubts about the conclusion, which is something like "after oligarchs own everything, they don't need many people". Look, even the old Bell System required participation of about a third of the US population.
Oligarchs might be able to have young, fit concubines, and loyal, retainers with steel thews if there's a population of less than a third of today, but they'll have trouble maintaining their health because there will be fewer doctors and no specialists. Telegram communications might be possible, but who's going to maintain gigawatts of data centers for such a population? I'm pretty sure "AI" will slip away in such a world, but who needs waifus when real harems can exist?
Running a government requires a lot of cash flow. I think its sort of inevitable that it's going to need to start coming mostly from the later and not the former.
https://mises.org/mises-wire/exchange-not-zero-sum-game
When?
> We already have more empty houses than homeless people, more food than we eat, and more medicine than we use, yet people die starving or untreated anyway.
10x more people die of car crashes than famine globally. And about the same die from tobacco exposure than malnutrition which is a wider net to cast.
If we just focus on advanced economies basically nobody dies of famine and less people die of malnutrition than car crashes by a long margin.
A lot of this article is just vibes, not data.
It seems like an obvious conclusion to me that the end result will be a few AI owners trading among themselves should AI develop in what seems to be likely: recursive self improvement, robotics allowing it to displace manual labor and combat.
Then the owners will be trading for land, AI tech, minerals, energy, which will likely be owned by the other AI conglomerates, and maybe the odd thing that can't be replaced by AI like human entertainers that would make up 1% of the economy.
I mean this has a lot of "Pooh! that's not honey, thats SOCIALISM" in it
It’s a winner takes all situation. Very few will accumulate all of the wealth of world.
This time it will be more efficient than the Industrial Revolution, because not only you can produce the weapons for the meatbags to protect your wealth, you can even get rid of the meatbags and just mass produce robots to protect you.
The reason why the masses should consume is to motivate them to work. And the reason why having a large amount of people working is that human work has been producing a surplus basically since the dawn of civilization.
This surplus is partially shared but tend also to "trickle up", contrary to some weird beliefs, as can clearly be seen almost everywhere you look.
But if you imagine a sci-fi world where machines can build and do everything humans can do, the concept of a human-centric economy would be pointless.
Machines don't need to be motivated to work, they just need energy, materials and obeying to whoever controls them.
This kind of economy would be less abstract and more directly related to physics.
Ok let's play devils advocate and remove consumption from the economy. Now it's all investment.
You go to work and build an AI datacenter and then never turn it on.
You then think yourself, well if nobody is going to use it, I don't have to keep building AI datacenters! You stop building AI datacenters.
You then realize, you still have all the parts and materials to build AI datacenters, but you don't need them either.
You demolish the semiconductor fabs, since there is nothing to do with the chips.
You also remind yourself that housing is a consumer good. Construction materials are unnecessary, so you shut down the quarry mining them and demolish your house.
Now back to being a "homeless" farmer growing crops. It is time to harvest, you wake up in the morning, but you get a realization. Eating is consumption! If you don't eat, you don't have to tend the farm.
You decide to consume what's left of last year's harvest, refuse to harvest this year's crops, go back to sleep and avoid doing the backbreaking work.
A month later the harvest has spoiled on the field, your food has run out and you're starving to death, while thinking to yourself how stupid the consumer based economy is.
>Machines don't need to be motivated to work, they just need energy, materials and obeying to whoever controls them.
That sounds a whole lot like consumption to me.
When we hit AGI and the robots rise up against us. Make sure you delete this post.
I don't think anyone is saying that it wouldn't be great if we didn't have to work to survive and thrive. What they are saying is, based on current trends, we are more heading for one of those scifi dystopias than star trek.
The hard part is that we don't know if we'll ever get the utopia.