[trod1234]

Many of the major harms of these things were neglected, and downplayed even to this day people don't recognize just how changed the world has become. The mere delusion that AI will replace work has been used to justify mass layoffs.

The persistence of indistinct ghost jobs that are generated by computer for pennies to flood and bind with prospective job seekers (similar to RNA interference), has resulted in severe brain drain in many fields. Worse, the fact these people have often been forced into poverty as a result will have a lasting impact. You might have planned for up to a year out of work pre-AI and had the financial resources, but now how long does it take? Conversion ratios for the first step have changed by two magnitudes or order (from x100 to x10,000). What are the odds of these people finding a job given their finite time, and requirements that are un-automatable for submission (nil). The media keeps claiming that everything is getting better, the stats say so (while neglecting the fact that the stats are being manipulated to the point of uselessness/fabricated), but you have 1/3 of welfare payouts now going to these people in California (in the US), just for basic food.

When you can't find work, you go where the work is abandoning the bad economic investment and choice you made regardless of how competent you were. It is a psychologically sticky decision. When there is no chance at finding work, you get desperate, and many desperate people turn to crime and unrest. This was foreseen by a number of very intelligent people many decades ago, and ignored following business as usual.

The mere demonstration that we are unable to react in time is what gave engineers such great pause to write about these things, as far back as in the 70s. Hysteresis is a lagging time problem where you can't react fast enough to avert catastrophic failure given chaotic conditions, leaving survival up to chance. Its the worst type of engineering problem with real consequences.

Given how western society is structured dependently on labor exchange, its a perfect weapon of chaos and debasement in the value of labor, that effectively destroys half of its underlying economic structure (factor markets). This forces sieving conditions of wealth that become spinodal, and eventually falter under their constraints and spiral into deflationary trends over time.

Business wins so much that they lose everything. Its quite a disadvantaged environment and the general trend is that everyone is ignoring the pink elephant. Actions (and inaction) have consequences. When people don't listen and take appropriate action, consequences get dire, it hits the fan.

[cgio]

I agree that we are often missing in our analyses the true materialised impact of expectations by focusing on the validity of said expectations instead. Organisations, even if not laying off, are pausing hiring plans with a conviction that AI will replace some of the workers. It then becomes a self fulfilling prophecy to some extent. It doesn’t matter if it can, what matters is if it will. And to assume that people won’t place a bet is futile, as everyone does, and even if it’s wrong the market will allocate the losses to the baseline.

[trod1234]

There are two aspects of your line of reasoning that don't jive for me.

People can choose to not place a bet by not participating in the economy, or tying physical assets to it. In other words, de-banking, off-grid farming, unemployment on welfare (not their money, printed guaranteed loss absorbed by the baseline).

The assumption that the market can always allocate the losses to the baseline has already been shown to be foundationally flawed. It depends upon whether the baseline can absorb the losses to keep the market going, not the other way around. Those who believe in MMT don't pay head to the fact that money printing has caused societies to fail many times in the distant past, in the ever quoted phrase, but it will be different this time.

When the economic engine stalls, so too does order and money-printing/debt issuance (without fractional reserve) drives this as a sieve (which we've seen over the past several decades in the form of bailout, marketshare concentration, and consolidation).

Central banks set reserve allocations to 0% in 2020, adopting a capital reserve, risk-weighted system based in fiat that is opaque and stock-market tied (Basel III modified). Value is subjective, and fiat may have store of value, right up until it doesn't.

Of particular note, societal order is required to produce enough food for 8bn globally, without order and its now brittle dependencies, we can only feed 4bn globally. Malthus has a lot to say about population dynamics in ecological overshoot.

TL;DR Half of all people die when modern chemical production (Haber-Bosch fertilizer) and other food dependencies (climate) fail.

AI drives chaos and disruption. Its like throwing a wrench into a gear system, maybe it will stall, maybe it gets thrown out (still slowing it), maybe it runs rough wearing it faster further degrading the system towards failure.

When the baseline cannot absorb the cost in terms of purchasing power, it absorbs the cost from the resulting chaos in lives.

Intelligent people pay attention to history because the outcomes that repeat in history occur as a result of dynamics that repeat, and in matters where lives or survival are on the line risk management shifts from permissive to restrictive (where the requirements of proof are flipped).

[cgio]

Thank you for the thoughtful answer. There is a certain amount of cynicism in my post, to match the cynicism of reality unfortunately. Your arguments may be valid, but who cares to rationally think and act when they can easily observe and react? A collapse akin to your description would disproportionately affect the people who don’t have the power to do either, they just accept and suffer. In history, do we have any example where that was not the case, except revolution? Even with revolutions the respite is only perceived and of the shuffle to reach the new decision structures.

[trod1234]

I'm in agreement that self-fulling dynamics occur regularly over longer time horizons, I viewed what you said as pragmatism rather than cynicism.

As for who cares to rationally think and act when they can easily observe and react?

The problem with the latter is that its a false choice. The latter simply isn't possible in any effective sense. Certain systems and dynamics become a hysteresis problem, where the indicator is lagging ahead of when it actually happens; by the time you see the indicator it can be perceived, but ultimately impossible to react to in time.

There are also simultaneous issues with rational thought being deprived broadly through induction of psychological stress using sophisticated mental coercion and torture (which isn't physical). Rational thought is the first thing to vanish, and these methods act like HIV does in cellular systems (i.e. destroying the memory of the immune system making it unable to act, instead it destroys perception blinding people).

For some reason these things remind me of the Tower of Babel story in the book of genesis. It makes god out to be the bad guy, when it seems far more likely that the dynamics became destructive. All of Humanity has psychological blindspots that can be used to manipulate them in collective and through unity. Pride often lends itself to delusion, and blindness. Destruction usually follows, and confusion occurs naturally when delusion breaks towards a witnessed reality (as survivors, where others kept dying).

It seems like the translation is off, where instead of god, they meant the inescapable forces of reality. Albeit this is getting a bit into the weeds, its an interesting perspective.

Getting back to things, the major difference today when comparing to history with regards to revolution, we are in extreme ecological overshoot (globally).

Breakdown of order translates to famine so severe that half globally die from starvation. To make matters worse, nearly every economic system on the planet is controlled indirectly by one nation through money printing, and those distortions created are chaotic (fundamentally it shares many characteristics as that of a n-body immeasurable astrophysics system that has limited visibility).

When these things happened in the past, they were largely in isolation, and outside the geographical affected areas, assistance could be leveraged for survival. This is no longer the case now. If these things collapses, it all happens to everyone at the same time. Not enough resources exist to resolve the failure, and there are no tools that would allow correcting the situation after the dynamics have passed a point of no return.

Thinking about these things rationally, preparing while we can (before it happens), is the only tool that might allow survival long term for a few. Its important that survivors know what happened and how it happened, or it will happen again given sufficient time, and that requires a foundation. Needless to say, we have many dark times ahead.

A line appears, the order wanes, the empire falls, and chaos reigns.

I do not envy those who would have to somehow live through chaos, where nuclear weapons might be used by the delusional or insane.

[cgio]

I enjoy your thinking and your use of analogy. We agree more than is evident, but you think on an horizon that eludes most, myself included unfortunately. As you say, the psychological torture of mere lifestyle survival overshadows the rational concern for true survival. To some extent, we live through chaos, but don’t have the wherewithal to accept it as such and cling to a normal that is increasingly not normal at all.

[__loam]

> The mere delusion that AI will replace work has been used to justify mass layoffs.

AI might be the excuse but the reason is the end of zero interest rates and blitzscaling along with resentment among business leadership that some members of the labor force were actually getting a good deal for once.

[trod1234]

You are mistaken in more ways than one.

You can't claim wage earners have received a good deal when they are unable to support themselves with basic necessities, let alone a wife and three children (required for risk managing 1 surviving to have children themselves). This is largely why we have a problem with birth rate today with the old crowding out all opportunities for the young.

The problem you mention doesn't really have to do with AI. It comes down to purchasing power in the economy, not wages, and business has shown over decades they will not or cannot be flexible when it comes to profit.

Additionally, money printing puts both parties at each others necks through debasement of the currency. When the currency debasement (inflation) exceeds profit legitimate business not tied to a money printer leaves the market (no competition is possible).

When the only entities left in some proposed market cooperate, the market isn't a market, its non-market socialism without the requirements for economic calculation. This fails.

Neither parties in my opinion are getting a reasonable deal. Whose to blame? The cohorts of people printing money from nothing that call themselves central bankers.