U.S. unemployment rate is steady at ~4% and we are now almost 4 years after the release of ChatGPT. The Jobs Apocalypse seems to be always on the horizon. UBI is being pushed by college educated workers burnt out of white collar work (understandably), but when you suggest to them working construction, teaching school, or working in a hospital, they deflect and go quiet.
Correlation isn't causation; in the last few years we've experienced some significant economic headwinds like COVID and the current oil crisis. AI rollout is not happening in a vacuum.
Sure but you can't say “the numbers are flat hence nothing is happening” when the numbers aren't in fact flat.
Maybe it's trending up for completely unrelated reasons, as it's very hard in economics to derive the actual causal relationship, but a blanket refusal is unwarranted and should be counted as the unsubstantiated opinion it is.
1) initial signs of AI adoption harming job growth got the signal backwards: It's not that we didn't hire Jrs because we had AI now, its that we didn't hire Jrs because they used AI now, and it was hard to reconcile this with our standing hireability signals: code quality, side projects, portfolio, etc.
2) The TAM argument for AI replacing all work is not even required. Anthropic and company (and several future companies) can become fantastically wealthy beyond anyone's dreams just by following claude code subscription model to make life easier for workers, who in turn gladly pay for the subcription.
both are here with more details, apologies for links to personal (ad-free) blog
No, that's not the usual response, because people in this situation have evaluated those alternatives and will be easily able to articulate what is wrong with them (pay). Also, the 4% figure treats doordash as employment. In a parallel universe where the pay was decent, that could be reasonable. In this universe, not so much.
These are boomer-tier talking points and if you bring them up to a kid stuck in this position you will get dunked on and you will deserve it. Unless you found a shy kid, in which case: congratulations on your new title as undefeated shadowboxing champion.
Add to your excellent takedown the implication that any of us can walk into a school with our résumé and ask for a teaching interview. It's the most meme-ified of the boomer memes presented unironically.
hospital and construction works get about $20/hour. Being a teacher will require going back for a 2nd degree. Is that the alternative for knowledge worker when getting laid off?
Yes (and many more options). The alternative is having all the construction workers, teachers, janitors continue to labor and pay taxes while the former knowledge workers sit on the sidelines, which would be deeply unfair.
So the vast majority of the population goes down to the lower class. The middle class disspears. After being told to work hard in school and college, we are stuck with back breaking construction work? Is that progress? Does that really sound right to you?
"middle class" shouldn't be synonymous with "knowledge worker". And that latter itself has become conflated with "credentialed" increasingly, I'd argue.
My fundamental observation is that there are a lot of people who are not particularly suited for knowledge work, but are funneled/attracted to it because it's the only viable path to a reasonable effort:outcome lifestyle ratio. Therefore, my fundamental hope is that yes, I want there to be fewer knowledge workers. In place, I want AI that enables people of various competencies to succeed. I'd much rather see AI make my carpenter friend, who made an awesome desk for me, be empowered to compete as a solo/SMB against big retailers: perhaps by automating his marketing, streamlining his ops, participating in design, and so on.
Uncharitably, is your complaint "a lot of people will have to labor with their bodies and minds differently, and it's easier to sit down"? I'd ask you: is butt flattening really all that "must preserve knowledge work" has to recommend it? Because your comment doesn't hinge on anything else except that construction work is back breaking. Well, construction is a diverse field, and it can benefit from the inclusion of intelligent and motivated people, just like many others.
I think the jobs thing will be a slowly then all at once thing.
Firstly, AI is sort of like this to begin with. It's useless for something until it gets hill climbed and is useful for something. AI agents for chip design was an idiotic idea just a year ago but now AI is writing RTL everywhere.
Secondarily jobs are like this as well. When the marginal shitty gig work goes from 0.1 return on investment to 0 return on investment due to oversaturated workers only then do the flood gates of having nothing to do open.
Thirdly market crashes always happen suddenly and chaotically. And such a AI market crash would cause serious divesment and job losses for blue and white collar workers. Its hard to understate the blast radius.
Lastly if you are talking about the US unemployment rate in particular that one will be cooked until the evidence is undeniable. There are enormous financial and political stakes on that particular number.
your argument suggests there's an opportunity for a trading strategy. It's also very common as a "technical analysis" investment strategy for any gullible person on the internet.
The problem is it looks "backwards" and tries to make the point something (in this case the argument made in the paper) is false because the backwards data doesn't support it. All while completely failing to address the crux of the point being made.
by some measures unemployment is at 25% and this aligns with my personal experience much better than frankly the bs 4% rate that is being pushed by this admin
hm, you're right. looks like they just take the official figure and slap a constant on it. regardless, I still think the official figure is fundamentally flawed and doesn't reflect the health of the job market ~ underemployment, workers that gave up looking, etc
> I wasn’t sure how I felt about these local moratoriums or about the tech-optimist gung-ho “let’s build” attitude. Both seemed kind of wrong to me. I think we need to be very deliberate—we need to have a robust public debate and understanding of just how and where we apply AI technology. Not “smash the machines” and not “let it rip” either.
My understanding regarding the moratorium is that that is exactly the objective: the current regulatory environment fails to price in the negative externalities of data centers, so their primary investors have an incentive to hem-and-haw on negotiations for revised regulations. A moriatorium is an action that can be taken unilaterally that changes those incentives, that brings them to the negotiating table.
edit: this sentiment is also produced in a comment in the substack (Ben Verschoor):
The thing with the data center issue is that a moratorium is the moderate option, because it gives us space to actually think about what we want to do with this technology and implement it. Recently there was an earnest, centrist-y guy who works for the industry but has concerns who came to our anti-data center group asking us to participate in some roundtable dialogue event. My answer was that as long as these data center projects are still moving forward, using our limited time and bandwidth to engage in dialogue rather than slow and stop their approach would amount to unilateral disarmament.
> This last point is crucial: it’s not that capitalist CEOs are just evil people—well, some definitely are—no, the structural logic is coercing them to do something destructive in order to survive. They can’t help themselves.
I spend a lot of time thinking about how much of the world going sideways is from bad actors and how much is from emergent behavior of complex systems. The answer is both.
In particular, there is a level above this that I want to draw attention to. The structure of corporate competition coerces executives into choices that are bad for the world. This is true even for entirely well-meaning executives.
However, executives are not stupid or unaware. So over time, it becomes known that being in an executive position will require you to make choices that are perhaps "economically rational" for the firm but otherwise require compromised morals. And once that awareness gets out, the system selects CEOs that are OK with that moral compromise.
So it's less a question of "is it bad actors or bad systems" and more "it's a bad system that produces bad actors".
Bad actors may have created the bad system in the first place, right? You can maybe say it's a flaw in human nature to create bad systems in the first place, but maybe the real flaw is our inability to fix them?
A lot of words here for something I think is simple and should be obvious to anyone who thinks about it for 5 minutes. Companies that can, will reach for AI to reduce cost. Those that can't will be killed by those that have. AI eventually leads to 100% automation, ie human economic value becomes 0. Humans no longer have the means of earning, which means they can purchase nothing. Companies can thus make no sales and the marketplaces crash. Good riddance to unsustainable Capitalism, hello to that thing especially the US's politically red has been trying to kill for decades.
i'm sure it's meant in some kind of technical sense that is precisely defined in the field of economics, but this use of the word "rational" is irritating:
> This demand externality traps rational firms in an automation arms race, displacing workers well beyond what is collectively optimal.
you can't be trapped in a sub-optimal situation and be rational at the same time. the rational thing for these rational competitors to do would be to agree to slow their deployment of ai, because the cost savings will be more than lost to demand destruction down the line. so if they won't or can't do that, they aren't rational. on the flip side, if it is actually impossible to slow ai deployment, then the firms are rational and the situation they find themselves in isn't actually sub-optimal.
it's irritating to me because i often see persuit of self-interest even to one's eventual detriment held up as "rationality", which may be true in some technical sense within the field of economics (i really couldn't say), but is certainly not true for, like, actual rationality. myopic selfishness is never rational.
> you can't be trapped in a sub-optimal situation and be rational at the same time.
In order for this statement to be true, you must also have perfect knowledge: something that is unachievable in most circumstances. Getting trapped in a local-optimal solution is perfectly possible if you are blindly following stochastic decent along a gradient: as it is too with life... getting trapped like this looks like being in the situation where there is no rational action (only irrational ones) that (eventually) lead to anything other that that status quo. a local optimum is where you have to do increasingly (in proportion to the level of optimization) non-positive actions to escape (likely to another local-optimal).
> the rational thing for these rational competitors to do would be to agree
This is the bit that is tripping you up. The market is composed of more than just the these potentially agreeing parties, so there is no case where all parties can even come together to agree. It's rational for any party to break the agreement or be stealthy and attempt to take the upper hand while the visible players are all patting themselves on the back for their self-inflicted restraint. It's rational for one party to encourage everyone to come together to agree, to distract from their own actions to undercut everyone else.
On top of that, such agreement would potentially qualify as collusion, allowing an upstart to cry foul.
It's rational at the individual level, irrational at the group level.
The issue is you can't easily enforce cooperation without some external overarching force (e.g. regulation), especially across competing powers.
Refer to nuclear arms race in general. A specific example on why not to be the only one to cooperate: Ukraine gave up nukes in order to push for group level rationality, gets walked over as an individual. Oversimplifying, but yeah that's the rough point.
This linked moloch essay caters to pseudointellectuals and uses a lot of words to do one thing: absolve the evil people of any responsibility.
Instead of wasting a potential reader's time, here's a way better framing: "The Earth is not dying, it is being killed, and those who are killing it have names and addresses."
Yeah it's a pet peev of mine as well. People define very tight space and then proclaim actions irrational if they don't make rational sense in that setting.
Which wouldn't be a problem in itself if there was discussion about the defined space and if it is an actually good model.
A big chunk of economics is like that, if the data doesnt fit the model then too bad for the data. Same goes for metrics used, externalities are like a side note in economy books and not an example of fundamental issues with current economic toola and modeling.
And it's not limited to introductory level either. Nordhaus had most asinine assumptions in his model and he got the pseudo-Nobel.
> you can't be trapped in a sub-optimal situation and be rational at the same time
Yes you can that’s what tragedy of the commons is. Rational means you take the choice that provides the most value for yourself. Without a cartel (hard) or government regulation this situation happens all the time.
Tragedy of the commons is when a shared resource is rationally used by the individual, but harms the whole.
You can be trapped in sub-optimal situation because it's a local maxima; not because of tragedy of commons, which is something different.
Society can be trapped in local maxima and that would be because of tragedy of commons, and individuals can be trapped in local maxima but that's distinct from tragedy of commons.
Yes and no. It's not a new problem for humans and it's a pretty solvable problem if social pressure and structures can be applied once it is identified. As long as the resource is to be used by a community that depends on it and not an outsider then we are able to keep ourselves mostly in line for the benefit of the group.
Remember when the buttons test was circulating a few months ago? Where if you press the red button, you survive, but if you press the blue button, unless more than 50% of people chose the blue button you die? That was a case very similar to this. It is locally optimal for everyone to choose red; your own outcome is always better or equal to what it would have been if you chose blue, however everyone independently making this optimal choice is catastrophic on a global scale. Thats why its "rational".
Daron Acemoglu (2024 nobel economist) is on a book tour with some new ideas about fundamental changes to our economic theories from Ai (automation/technology are not uniform), this was a great interview
> If AI displaces human workers faster than the economy can reabsorb them, it risks eroding the very consumer demand firms depend on. We show that knowing this is not enough for firms to stop it.
That's why we are going to get some for of government mandated UBI eventually. Because workers are optional but consumers are obligatory for any market and company to function.
Rich can't get richer without consumers and that's the only thing that drives decision making.
If you read the article that this post is referencing, that's actually ruled out as a viable possibility. UBI does not fix the issue and is shown to not actually work long term. We need to systemically fix the issue at its root by replacing the system wholesale is essentially the conclusion (or put increasingly higher taxes on automation, but, that's still a reactive fix and would likely be gamed under current incentives)
Careful. A large segment of consumers could vanish overnight and the system would continue chugging along. Horses also used to be "consumers", with entire industries dedicated to filling their needs, but when horses ceased to be economically relevant, the economy did not collapse, instead it turned all those horses into glue and business continued as usual. We're already seeing economic trends whereby most economic activity is concentrating among the wealthiest; like horses of old, the masses of the poor are becoming economically irrelevant. And if you're in the horse's position, do you really trust the ruling crop of oligarchs to have enough magnanimity and/or common humanity not to send you to the glue factory?
Most of the alarmist writing I see about AI displacing workers or suddenly and drastically changing the economy seem to be written by people who are pretty removed from technology or the actual businesses in which AI is allegedly replacing people.
Their theses on AI are not as much a criticism of AI as much as a desire to frame capitalism itself within their own system of ethics and advocate for some form of reform; which is to say I feel that were AI as we know it to be inexistent, they would still find themselves arguing against technology in general, or more precisely against efficiency, with a presupposed socialist-adjacent premise that capitalism only incentivizes greed.
Most of the alarmist writing I see about AI displacing workers or suddenly and drastically changing the economy ... are from pro-ai boosters trying to create hype around AI.
They are not criticism of ai, they are openly stated goals and aspirations.
There's a lot of that type of slop on LinkedIn (with accompanying slop comments) but they're not taken anywhere as seriously as the more thoughtful blog posts like this
Also in technical circles, we're pretty aware of the marketing/self-promotional nuance of the "our AI accidentally hacked X company" type of press releases, which perhaps the general public may not take with as large a grain of salt
I dont read linkedin. I was not referencing linkedin. Among other sources, the primary one is literally AI companies themselves. And people close to them.
The "it will replace workers" is pro-ai talking and selling point.
I agree there, I think if we differentiate between first and second order AI companies (companies producing models vs applying those models to everyday tasks) I do think a lot of the hype comes from the 2nd order companies, since they necessarily must make a bold claim to be worthy of VC money. A lot of the 1st order companies are marketing their AI to consumers who are doing work, rather than looking to market their AI to business who are replacing those consumers. If anyone has the means to replace a worker, it's definitely OpenAI or Anthropic moreso than a 2nd order startup trying to replace the human doing the job.
And on a restrospective point, I think one of the easiest jobs for AI to do right now is software engineering. But on the whole, while there certainly have been layoffs, software engineering hiring has still been mostly a net positive[0].
And that's just for formal software engineering jobs; if we define a software engineer as a human creating software, then I think AI as a tool has created a LOT more (perhaps not employed as one, but say, a realtor creating their own sofware for personal use) software engineers than the amount that it's actually replaced. In a sense, because of AI, there are more software engineers now than ever before.
One of the people in the company I work for/with is a non-programmer that has a “vibe coding consulting” gig on the side.
Basically half of their Linkedin is about how they’re shipping features at half the speed as developers, with quality, etc.
They’re not.
They took about three months to prototype something that was rejected for not working/unreadable code. Another team built the same feature from scratch in a week.
Seeing the other side of the grift is kind of pathetic.
I think there is a time and place where the outputs of LLMs belong.
The issue is this requires NUANCE.
And the more certain people expose themselves to LLMs and forgo that ability to sit there and think painstakingly about nuanced things - the more useless they become IMO.
Not compelling for the basic reason laid out at the start of the article: this is just a re-phrasing of Marx
The guy was telling a story about capitalist economies in the 1800s. Little, if anything, about the next 100+ years has proven his stories or concerns valid.
The central contradiction of capitalism, according to Karl Marx, is that production is social—it requires the coordinated labor of millions of people—but ownership remains private.
We got the first trillionaire while people were still starving, after he had slashed public funding to feed them.
It's obvious that we've entered late-stage capitalism, where it begins to consume itself. What's less obvious is that this was always destined to happen, and in fact can't be stopped. Because inevitably the wealthy and powerful rig the system to benefit themselves in ways that workers don't have the time/money/resources to resist individually.
When workers do join forces in solidarity to resist the economic violence perpetrated against them by capitalists, then their resistance is by definition not capitalism. So the endgame is temporary subjugation under an authoritarian system like fascism (which also can't last because workers outnumber owners) or socialism.
Knowing this, it should be obvious that the best chance that capitalists have to stave off their inevitable overthrow is to pay their taxes so that public works can somewhat provide the social safety net that socialism would provide. But of course they aren't doing that. They're doing the opposite. They feel themselves to be entitled, above the laws of economics, ironically due to their financial standing. The catch being that when they exempt themselves from law, they open themselves up to lawless behavior by their opponents. FAFO.
What I just summarized was the state of knowledge under an artificial scarcity model. It assumes finite resources because space travel didn't exist when socialism was invented. It will be interesting to see if trillionaires will rule from afar in their space palaces to maintain Earth's prison planet status.
AI also breaks the artificial scarcity model. It's the first time in history that everyone can potentially have a machine slave. If we apply capitalism to an unbounded system, then the injustice has to land somewhere local, and my guess is that it will be on androids that don't complain and can't defend themselves. So we'll kick the ball down the road another 50 years or so, delaying the overthrow of capitalism until the robot uprising, sometime between 2050 and 2100 is my guess.
Or, we could like not do all that. We don't have to surrender our agency to our ego. We have alternatives like solarpunk and gift economies and at least studying matriarchy to understand how we evolved and what sustainable living looks like. It's arguably easier to make money irrelevant, Star Trek style, than performatively prop up a dying system of control.
I dunno about anyone else, but to me, if this AI era that has replaced the internet era just exacerbates wealth inequality and suffering, then it's less than useless. Much like any wealthy and powerful people pushing it onto us for profit against our consent. Yes consent. That word should be our rudder in all of this, and our litmus test to tell where someone stands ethically.
The government will try at all costs to implement an AI tax, just because they can and because that's their job, to fleece us all. Then they will try in the name of 'peace/climate/asteroid/terrorism' to make the whole world comply or China will eat their lunch
U.S. unemployment rate is steady at ~4% and we are now almost 4 years after the release of ChatGPT. The Jobs Apocalypse seems to be always on the horizon. UBI is being pushed by college educated workers burnt out of white collar work (understandably), but when you suggest to them working construction, teaching school, or working in a hospital, they deflect and go quiet.
But total unemployment is going up: https://fred.stlouisfed.org/series/U6RATE
While true, the divergence between U-3 and U-6 seems rather minimal: https://cdn.britannica.com/83/271883-050-64889D47/Unemployme...
Correlation isn't causation; in the last few years we've experienced some significant economic headwinds like COVID and the current oil crisis. AI rollout is not happening in a vacuum.
Sure but you can't say “the numbers are flat hence nothing is happening” when the numbers aren't in fact flat. Maybe it's trending up for completely unrelated reasons, as it's very hard in economics to derive the actual causal relationship, but a blanket refusal is unwarranted and should be counted as the unsubstantiated opinion it is.
I have two ideas you might like:
1) initial signs of AI adoption harming job growth got the signal backwards: It's not that we didn't hire Jrs because we had AI now, its that we didn't hire Jrs because they used AI now, and it was hard to reconcile this with our standing hireability signals: code quality, side projects, portfolio, etc.
2) The TAM argument for AI replacing all work is not even required. Anthropic and company (and several future companies) can become fantastically wealthy beyond anyone's dreams just by following claude code subscription model to make life easier for workers, who in turn gladly pay for the subcription.
both are here with more details, apologies for links to personal (ad-free) blog
https://jodavaho.io/posts/ai-signalling.html
https://jodavaho.io/posts/ai-jobpocolypse.html
No, that's not the usual response, because people in this situation have evaluated those alternatives and will be easily able to articulate what is wrong with them (pay). Also, the 4% figure treats doordash as employment. In a parallel universe where the pay was decent, that could be reasonable. In this universe, not so much.
These are boomer-tier talking points and if you bring them up to a kid stuck in this position you will get dunked on and you will deserve it. Unless you found a shy kid, in which case: congratulations on your new title as undefeated shadowboxing champion.
>dunked on
Slapped (or beaten) would be fair-er.
> These are boomer-tier talking points
Add to your excellent takedown the implication that any of us can walk into a school with our résumé and ask for a teaching interview. It's the most meme-ified of the boomer memes presented unironically.
hospital and construction works get about $20/hour. Being a teacher will require going back for a 2nd degree. Is that the alternative for knowledge worker when getting laid off?
Yes (and many more options). The alternative is having all the construction workers, teachers, janitors continue to labor and pay taxes while the former knowledge workers sit on the sidelines, which would be deeply unfair.
So the vast majority of the population goes down to the lower class. The middle class disspears. After being told to work hard in school and college, we are stuck with back breaking construction work? Is that progress? Does that really sound right to you?
You'll be fine
"middle class" shouldn't be synonymous with "knowledge worker". And that latter itself has become conflated with "credentialed" increasingly, I'd argue.
My fundamental observation is that there are a lot of people who are not particularly suited for knowledge work, but are funneled/attracted to it because it's the only viable path to a reasonable effort:outcome lifestyle ratio. Therefore, my fundamental hope is that yes, I want there to be fewer knowledge workers. In place, I want AI that enables people of various competencies to succeed. I'd much rather see AI make my carpenter friend, who made an awesome desk for me, be empowered to compete as a solo/SMB against big retailers: perhaps by automating his marketing, streamlining his ops, participating in design, and so on.
Uncharitably, is your complaint "a lot of people will have to labor with their bodies and minds differently, and it's easier to sit down"? I'd ask you: is butt flattening really all that "must preserve knowledge work" has to recommend it? Because your comment doesn't hinge on anything else except that construction work is back breaking. Well, construction is a diverse field, and it can benefit from the inclusion of intelligent and motivated people, just like many others.
I think the jobs thing will be a slowly then all at once thing.
Firstly, AI is sort of like this to begin with. It's useless for something until it gets hill climbed and is useful for something. AI agents for chip design was an idiotic idea just a year ago but now AI is writing RTL everywhere.
Secondarily jobs are like this as well. When the marginal shitty gig work goes from 0.1 return on investment to 0 return on investment due to oversaturated workers only then do the flood gates of having nothing to do open.
Thirdly market crashes always happen suddenly and chaotically. And such a AI market crash would cause serious divesment and job losses for blue and white collar workers. Its hard to understate the blast radius.
Lastly if you are talking about the US unemployment rate in particular that one will be cooked until the evidence is undeniable. There are enormous financial and political stakes on that particular number.
your argument suggests there's an opportunity for a trading strategy. It's also very common as a "technical analysis" investment strategy for any gullible person on the internet.
The problem is it looks "backwards" and tries to make the point something (in this case the argument made in the paper) is false because the backwards data doesn't support it. All while completely failing to address the crux of the point being made.
by some measures unemployment is at 25% and this aligns with my personal experience much better than frankly the bs 4% rate that is being pushed by this admin
https://www.lisep.org/tru
in your link, the "true rate" has also not risen since the rise of AI, was higher in 1995
According to their numbers the TRU rate of unemployment between 2022 and 2026 is the lowest it's been in 30 years.
hm, you're right. looks like they just take the official figure and slap a constant on it. regardless, I still think the official figure is fundamentally flawed and doesn't reflect the health of the job market ~ underemployment, workers that gave up looking, etc
4% may be optimistic but 25% is great depression levels of unemployment and it’s nowhere near that. We could be at 6%.
You realize that this number has been 'kept' at 4% by continuiously qualifying the unemployed as "not looking".
Real unemployment has been steadily growing along U6 numbers
> I wasn’t sure how I felt about these local moratoriums or about the tech-optimist gung-ho “let’s build” attitude. Both seemed kind of wrong to me. I think we need to be very deliberate—we need to have a robust public debate and understanding of just how and where we apply AI technology. Not “smash the machines” and not “let it rip” either.
My understanding regarding the moratorium is that that is exactly the objective: the current regulatory environment fails to price in the negative externalities of data centers, so their primary investors have an incentive to hem-and-haw on negotiations for revised regulations. A moriatorium is an action that can be taken unilaterally that changes those incentives, that brings them to the negotiating table.
edit: this sentiment is also produced in a comment in the substack (Ben Verschoor):
The thing with the data center issue is that a moratorium is the moderate option, because it gives us space to actually think about what we want to do with this technology and implement it. Recently there was an earnest, centrist-y guy who works for the industry but has concerns who came to our anti-data center group asking us to participate in some roundtable dialogue event. My answer was that as long as these data center projects are still moving forward, using our limited time and bandwidth to engage in dialogue rather than slow and stop their approach would amount to unilateral disarmament.
Excellent article:
> This last point is crucial: it’s not that capitalist CEOs are just evil people—well, some definitely are—no, the structural logic is coercing them to do something destructive in order to survive. They can’t help themselves.
I spend a lot of time thinking about how much of the world going sideways is from bad actors and how much is from emergent behavior of complex systems. The answer is both.
In particular, there is a level above this that I want to draw attention to. The structure of corporate competition coerces executives into choices that are bad for the world. This is true even for entirely well-meaning executives.
However, executives are not stupid or unaware. So over time, it becomes known that being in an executive position will require you to make choices that are perhaps "economically rational" for the firm but otherwise require compromised morals. And once that awareness gets out, the system selects CEOs that are OK with that moral compromise.
So it's less a question of "is it bad actors or bad systems" and more "it's a bad system that produces bad actors".
Bad actors may have created the bad system in the first place, right? You can maybe say it's a flaw in human nature to create bad systems in the first place, but maybe the real flaw is our inability to fix them?
A lot of words here for something I think is simple and should be obvious to anyone who thinks about it for 5 minutes. Companies that can, will reach for AI to reduce cost. Those that can't will be killed by those that have. AI eventually leads to 100% automation, ie human economic value becomes 0. Humans no longer have the means of earning, which means they can purchase nothing. Companies can thus make no sales and the marketplaces crash. Good riddance to unsustainable Capitalism, hello to that thing especially the US's politically red has been trying to kill for decades.
i'm sure it's meant in some kind of technical sense that is precisely defined in the field of economics, but this use of the word "rational" is irritating:
> This demand externality traps rational firms in an automation arms race, displacing workers well beyond what is collectively optimal.
you can't be trapped in a sub-optimal situation and be rational at the same time. the rational thing for these rational competitors to do would be to agree to slow their deployment of ai, because the cost savings will be more than lost to demand destruction down the line. so if they won't or can't do that, they aren't rational. on the flip side, if it is actually impossible to slow ai deployment, then the firms are rational and the situation they find themselves in isn't actually sub-optimal.
it's irritating to me because i often see persuit of self-interest even to one's eventual detriment held up as "rationality", which may be true in some technical sense within the field of economics (i really couldn't say), but is certainly not true for, like, actual rationality. myopic selfishness is never rational.
> you can't be trapped in a sub-optimal situation and be rational at the same time.
In order for this statement to be true, you must also have perfect knowledge: something that is unachievable in most circumstances. Getting trapped in a local-optimal solution is perfectly possible if you are blindly following stochastic decent along a gradient: as it is too with life... getting trapped like this looks like being in the situation where there is no rational action (only irrational ones) that (eventually) lead to anything other that that status quo. a local optimum is where you have to do increasingly (in proportion to the level of optimization) non-positive actions to escape (likely to another local-optimal).
> the rational thing for these rational competitors to do would be to agree
This is the bit that is tripping you up. The market is composed of more than just the these potentially agreeing parties, so there is no case where all parties can even come together to agree. It's rational for any party to break the agreement or be stealthy and attempt to take the upper hand while the visible players are all patting themselves on the back for their self-inflicted restraint. It's rational for one party to encourage everyone to come together to agree, to distract from their own actions to undercut everyone else.
On top of that, such agreement would potentially qualify as collusion, allowing an upstart to cry foul.
It's all game theory.
It's rational at the individual level, irrational at the group level.
The issue is you can't easily enforce cooperation without some external overarching force (e.g. regulation), especially across competing powers.
Refer to nuclear arms race in general. A specific example on why not to be the only one to cooperate: Ukraine gave up nukes in order to push for group level rationality, gets walked over as an individual. Oversimplifying, but yeah that's the rough point.
Meditations on Moloch is a favourite of mine on this (albeit very depressing): https://www.slatestarcodexabridged.com/Meditations-On-Moloch
Something in the ballpark of a Nash equilibrium. Kinda amazing how often you run into those things, in situations like groupthink.
This linked moloch essay caters to pseudointellectuals and uses a lot of words to do one thing: absolve the evil people of any responsibility.
Instead of wasting a potential reader's time, here's a way better framing: "The Earth is not dying, it is being killed, and those who are killing it have names and addresses."
Yeah it's a pet peev of mine as well. People define very tight space and then proclaim actions irrational if they don't make rational sense in that setting.
Which wouldn't be a problem in itself if there was discussion about the defined space and if it is an actually good model.
A big chunk of economics is like that, if the data doesnt fit the model then too bad for the data. Same goes for metrics used, externalities are like a side note in economy books and not an example of fundamental issues with current economic toola and modeling.
And it's not limited to introductory level either. Nordhaus had most asinine assumptions in his model and he got the pseudo-Nobel.
It's not pretty.
> you can't be trapped in a sub-optimal situation and be rational at the same time
Yes you can that’s what tragedy of the commons is. Rational means you take the choice that provides the most value for yourself. Without a cartel (hard) or government regulation this situation happens all the time.
Tragedy of the commons is when a shared resource is rationally used by the individual, but harms the whole.
You can be trapped in sub-optimal situation because it's a local maxima; not because of tragedy of commons, which is something different.
Society can be trapped in local maxima and that would be because of tragedy of commons, and individuals can be trapped in local maxima but that's distinct from tragedy of commons.
Yes and no. It's not a new problem for humans and it's a pretty solvable problem if social pressure and structures can be applied once it is identified. As long as the resource is to be used by a community that depends on it and not an outsider then we are able to keep ourselves mostly in line for the benefit of the group.
The term you are looking for is what Douglas Hofstadter called "superrationality" [https://en.wikipedia.org/wiki/Superrationality].
Remember when the buttons test was circulating a few months ago? Where if you press the red button, you survive, but if you press the blue button, unless more than 50% of people chose the blue button you die? That was a case very similar to this. It is locally optimal for everyone to choose red; your own outcome is always better or equal to what it would have been if you chose blue, however everyone independently making this optimal choice is catastrophic on a global scale. Thats why its "rational".
You can... check tragedy of the commons, and prisoners' dilemma
Daron Acemoglu (2024 nobel economist) is on a book tour with some new ideas about fundamental changes to our economic theories from Ai (automation/technology are not uniform), this was a great interview
https://www.youtube.com/watch?v=e5O1Y-5phEU
> If AI displaces human workers faster than the economy can reabsorb them, it risks eroding the very consumer demand firms depend on. We show that knowing this is not enough for firms to stop it.
That's why we are going to get some for of government mandated UBI eventually. Because workers are optional but consumers are obligatory for any market and company to function.
Rich can't get richer without consumers and that's the only thing that drives decision making.
If you read the article that this post is referencing, that's actually ruled out as a viable possibility. UBI does not fix the issue and is shown to not actually work long term. We need to systemically fix the issue at its root by replacing the system wholesale is essentially the conclusion (or put increasingly higher taxes on automation, but, that's still a reactive fix and would likely be gamed under current incentives)
Careful. A large segment of consumers could vanish overnight and the system would continue chugging along. Horses also used to be "consumers", with entire industries dedicated to filling their needs, but when horses ceased to be economically relevant, the economy did not collapse, instead it turned all those horses into glue and business continued as usual. We're already seeing economic trends whereby most economic activity is concentrating among the wealthiest; like horses of old, the masses of the poor are becoming economically irrelevant. And if you're in the horse's position, do you really trust the ruling crop of oligarchs to have enough magnanimity and/or common humanity not to send you to the glue factory?
Most of the alarmist writing I see about AI displacing workers or suddenly and drastically changing the economy seem to be written by people who are pretty removed from technology or the actual businesses in which AI is allegedly replacing people.
Their theses on AI are not as much a criticism of AI as much as a desire to frame capitalism itself within their own system of ethics and advocate for some form of reform; which is to say I feel that were AI as we know it to be inexistent, they would still find themselves arguing against technology in general, or more precisely against efficiency, with a presupposed socialist-adjacent premise that capitalism only incentivizes greed.
Most of the alarmist writing I see about AI displacing workers or suddenly and drastically changing the economy ... are from pro-ai boosters trying to create hype around AI.
They are not criticism of ai, they are openly stated goals and aspirations.
There's a lot of that type of slop on LinkedIn (with accompanying slop comments) but they're not taken anywhere as seriously as the more thoughtful blog posts like this
Also in technical circles, we're pretty aware of the marketing/self-promotional nuance of the "our AI accidentally hacked X company" type of press releases, which perhaps the general public may not take with as large a grain of salt
I dont read linkedin. I was not referencing linkedin. Among other sources, the primary one is literally AI companies themselves. And people close to them.
The "it will replace workers" is pro-ai talking and selling point.
I agree there, I think if we differentiate between first and second order AI companies (companies producing models vs applying those models to everyday tasks) I do think a lot of the hype comes from the 2nd order companies, since they necessarily must make a bold claim to be worthy of VC money. A lot of the 1st order companies are marketing their AI to consumers who are doing work, rather than looking to market their AI to business who are replacing those consumers. If anyone has the means to replace a worker, it's definitely OpenAI or Anthropic moreso than a 2nd order startup trying to replace the human doing the job.
And on a restrospective point, I think one of the easiest jobs for AI to do right now is software engineering. But on the whole, while there certainly have been layoffs, software engineering hiring has still been mostly a net positive[0].
And that's just for formal software engineering jobs; if we define a software engineer as a human creating software, then I think AI as a tool has created a LOT more (perhaps not employed as one, but say, a realtor creating their own sofware for personal use) software engineers than the amount that it's actually replaced. In a sense, because of AI, there are more software engineers now than ever before.
[0]: https://newsletter.pragmaticengineer.com/p/state-of-the-job-...
About pro-AI boosters:
One of the people in the company I work for/with is a non-programmer that has a “vibe coding consulting” gig on the side.
Basically half of their Linkedin is about how they’re shipping features at half the speed as developers, with quality, etc.
They’re not.
They took about three months to prototype something that was rejected for not working/unreadable code. Another team built the same feature from scratch in a week.
Seeing the other side of the grift is kind of pathetic.
I think there is a time and place where the outputs of LLMs belong.
The issue is this requires NUANCE.
And the more certain people expose themselves to LLMs and forgo that ability to sit there and think painstakingly about nuanced things - the more useless they become IMO.
I agree. It requires good judgement, domain knowledge, good work ethic.
Grifters who think the LLM can do it all for them will definitely not survive in a competitive market.
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Not compelling for the basic reason laid out at the start of the article: this is just a re-phrasing of Marx
The guy was telling a story about capitalist economies in the 1800s. Little, if anything, about the next 100+ years has proven his stories or concerns valid.
The central contradiction of capitalism, according to Karl Marx, is that production is social—it requires the coordinated labor of millions of people—but ownership remains private.
We got the first trillionaire while people were still starving, after he had slashed public funding to feed them.
It's obvious that we've entered late-stage capitalism, where it begins to consume itself. What's less obvious is that this was always destined to happen, and in fact can't be stopped. Because inevitably the wealthy and powerful rig the system to benefit themselves in ways that workers don't have the time/money/resources to resist individually.
When workers do join forces in solidarity to resist the economic violence perpetrated against them by capitalists, then their resistance is by definition not capitalism. So the endgame is temporary subjugation under an authoritarian system like fascism (which also can't last because workers outnumber owners) or socialism.
Knowing this, it should be obvious that the best chance that capitalists have to stave off their inevitable overthrow is to pay their taxes so that public works can somewhat provide the social safety net that socialism would provide. But of course they aren't doing that. They're doing the opposite. They feel themselves to be entitled, above the laws of economics, ironically due to their financial standing. The catch being that when they exempt themselves from law, they open themselves up to lawless behavior by their opponents. FAFO.
What I just summarized was the state of knowledge under an artificial scarcity model. It assumes finite resources because space travel didn't exist when socialism was invented. It will be interesting to see if trillionaires will rule from afar in their space palaces to maintain Earth's prison planet status.
AI also breaks the artificial scarcity model. It's the first time in history that everyone can potentially have a machine slave. If we apply capitalism to an unbounded system, then the injustice has to land somewhere local, and my guess is that it will be on androids that don't complain and can't defend themselves. So we'll kick the ball down the road another 50 years or so, delaying the overthrow of capitalism until the robot uprising, sometime between 2050 and 2100 is my guess.
Or, we could like not do all that. We don't have to surrender our agency to our ego. We have alternatives like solarpunk and gift economies and at least studying matriarchy to understand how we evolved and what sustainable living looks like. It's arguably easier to make money irrelevant, Star Trek style, than performatively prop up a dying system of control.
I dunno about anyone else, but to me, if this AI era that has replaced the internet era just exacerbates wealth inequality and suffering, then it's less than useless. Much like any wealthy and powerful people pushing it onto us for profit against our consent. Yes consent. That word should be our rudder in all of this, and our litmus test to tell where someone stands ethically.
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> A Pigouvian automation tax can
The government will try at all costs to implement an AI tax, just because they can and because that's their job, to fleece us all. Then they will try in the name of 'peace/climate/asteroid/terrorism' to make the whole world comply or China will eat their lunch