[nextworddev]

This is a really poorly argued article, not sure even where to start dismantling the author's arguments. (Almost feels like ChatGPT wrote this article).

But let's start with this "If H&R Block could replace 90 percent of its seasonal employees with AI, it would see its profits skyrocket, given that labor is its biggest expense. Those profits would be reallocated elsewhere, that would increase the potential for even more economic growth, and that would in turn create better opportunities for the accountants."

=> Lol, no. It doesn't work that way. H&R block, if any, will allocate more to share buy backs, and the size of the tax filing "pie" won't increase due to AI.

[skhunted]

Exactly. Rich people tend to horde their wealth and seek more. When they have an opportunity to extract wealth from others they do so. The increase in economic growth from this extraction is minimal in comparison to the amount extracted.

[randomdata]

The only way to “extract wealth from others” is to put them to work.

[skhunted]

This is not correct. Look up rent seeking. If a company has regulatory capture it can seek the maximum profit and remain static (until it loses its capture). Generally it attains its maximum by exercising its pricing power. Exercising pricing power does not lead to more employees by the company.

[randomdata]

Profit is the accumulation of promises other people have made to you that they will work for you in the future.

That is, after all, why people seek profit. They like the security in knowing that others will do work for them in the future. When you feel hungry, you want to know that someone will work to give you food. When you feel cold, you want to know that someone will work to provide you shelter. When you feel bored, you want to know that someone will work to entertain you. So on and so forth.

Unless people can offer work that you want to have done in the future, you cannot profit. Rent seeking doesn't change anything. You still need valid promises of future work in order to profit.

[skhunted]

Your knowledge of economics appears to be lacking. Your original statement that the only way to extract wealth from someone is by putting them to work is factually wrong for the reasons I stated.

https://en.wikipedia.org/wiki/Rent-seeking

[randomdata]

> Your knowledge of economics appears to be lacking.

Well, duh. If it weren't lacking, what reason would there be for me to talk about it? There would be nothing left to learn. That would be a useless waste of time.

> Your original statement that the only way to extract wealth from someone is by putting them to work is factually wrong for the reasons I stated.

Go on. You stated that rent seeking accumulates profit, but as profit is merely the promise of future work, no wealth is actually extracted. Only a potential promise of future wealth is gained. Not until the profit is spent – as in people are put to work – can wealth be extracted out of those promises.

[yowzadave]

Poor people spend a larger share of their income (and therefore put it to productive use stimulating the economy, hiring people, etc). Rich people tend to hoard their pile, and spend a smaller portion of it.

[leereeves]

> The only way to “extract wealth from others” is to put them to work.

I guess you're thinking of people who have no assets. In that case, you're right, when people have no other wealth their labor is all that's left to extract. (And all they have left to trade for their daily expenses.)

What happens to people with no other wealth in an AI economy where labor has little value? That's a scary thought.

[randomdata]

> I guess you're thinking of people who have no assets.

Even of those who do. Wealth cannot be extracted from existing wealth.

> What happens to people with no other wealth in an AI economy where labor has little value? That's a scary thought.

Will people with AI be happy to metaphorically scurry off into the forest and life alone with nothing other than their AI? So long as there is value in human-to-human social interaction, there will be value in labour. The labour may not resemble anything we can imagine today, but it will be there in some form.

And even if we assume that those with AI do go off and live life alone in the forest, those who don't have AI will still need other people in their lives, so labour will continue to hold value within that subset of the population.

Alternatively, those with AI may freely share it with all, creating a post-scarcity society. That's probably not so scary. Hell, entire societies have upended everything in hopes of being able to transition into a post-scarcity world. It is generally considered a welcome future, not something to fear.

[drewmcarthur]

exactly, the only reason to hire someone is because you’re making money off their work.

[nextworddev]

Well at big companies, managers sometimes hire just for the sake of padding their orgs

[amayne]

Original author here:

Yes. Rich people tend to re-invest their money and not throw it into a Scrooge McDuck vault to swim in. The re-investing is what helps create economic growth.

[randomdata]

> H&R block, if any, will allocate more to share buy backs

Okay, but then whomever owned the share previously and accepted the profit in exchange for giving the share back now holds the profit instead. What are they going to do with it?

[syrgian]

Buy houses and lots, keep them empty, and speculate on their value.

Or just build their 6th mansion that uses a plot of land that could fit 400 apartments, keeping the people underneath them commuting 1 hour from their 80 square meter apartment.

[randomdata]

> Buy houses and lots, keep them empty, and speculate on their value.

But then the profit is given to whomever previously owned the property. What are they going to do with it?

> Or just build their 6th mansion

That puts people to work, violating the premise here.

[yowzadave]

You should familiarize yourself with the actual research on this topic, since ill-informed speculation on well-studied topics doesn't contribute to a helpful discussion. The subject you want to study is called "marginal propensity to consume."

[randomdata]

> You should familiarize yourself with the actual research on this topic

That's why we are here, but, frankly, I'll take ill-informed speculation over whatever the hell this is. What on earth is the point of using a discussion forum if you are going to outsource the useful words to other people? If they wanted to contribute to the discussion, they would do so themselves.

In fairness, perhaps you accidentally hit submit before you were finished?

[leereeves]

Some will buy second or third homes, and lobby to prevent new development in more markets.

[randomdata]

> Some will buy second or third homes

Which, again, merely trades the profit to whomever previously owned the homes. What are they going to do with the profit?

[squigz]

Hoard it

[amayne]

Original author here (not ChatGPT):

My claim is that H&R Block would replace all their workers for more efficient AI if it was more profitable. Then they would re-invest that money in the most productive way they can – other companies, etc. This is the same strategy as Apple, Microsoft and other companies do with large amounts of cash.

I don't claim H&R Block would be directly creating new jobs. They would try to maximize profit by investing their profits and diversifying.

[elicksaur]

Why would H&R Block even exist? In this AI-maximalist version of the future, I could just spin up my copy of Llama 25, and it’d do my taxes in seconds. Pennies to the local utility board for the energy. Not much value circulating in the economy to be reinvested anywhere.

[amayne]

Eventually that will probably be the case.

The future isn’t a fixed point. But before then H&R Block (or a company like them) will probably shift to AI. Then eventually your AI will mean you don’t even need them.

The disruptors will get disrupted.

[pylua]

I feel like the author has missed the concept of “Past performance is no guarantee of future results”.

[jazzdev]

Yes, it's not guarantee, but it is one good data source for predicting the future.

See Rule 5 in https://hbr.org/2007/07/six-rules-for-effective-forecasting

[jauntywundrkind]

Does anyone have a single example of a well reasoned good Reason.com article? This seems to be a no worse than average example from them. There's some ridiculous slant serving some glaringly biased agenda, with terrible argumentation.

Sources like Reason getting submitted & discussed as though their normal submissions is usually an incredibly silly time. I don't think the site should do it, but on Bluesky there's moderation layers, and it seriously makes me want something like that for the web at large, where we can turn on some kind of content warning as we browse. Content warning: specious/suspect sight. Content warning: strong agenda.

It's a bad time that the noosphere keeps happening with so little memory. That there's not cues and contexts to be like, hey, this is Reason or Quilette: don't expect normal content here.

[jazzdev]

What biased agenda do you see in this article?