[galaxyLogic]

So a lot of people might lose their jobs because of AI, right? But the same amount of economic output, probably more, will be produced because of AI. By whom will that output then be consumed? If people don't have jobs they don't have money to buy and therefore ... prices will have to come down!

Society as a whole will be better off because there is more output, better quality output. Then it's for us to vote in a government that shares the fruits of AI with everybody, by way of progressive taxation. Government, use the taxes you collect to give us free food. We don't need 5-star restaurants, just healthy food. We can do this, in a democracy.

[zarzavat]

> prices will have to come down

Prices of services will come down. Prices of things that require natural resources will go up.

In a hypothetical world where let's say we have AIs that can do any human job more effectively than a human, rich people who can afford to control the AIs will control society and poor people who have nothing to offer economically will live in poverty.

A good proxy for our future is Angola: an upper class who got rich off the oil boom, and a lower class who is dirt poor because they have nothing to offer the oil industry.

[Animats]

That's a generic problem with oil states. Or, more generally, where most income is generated by some centralized industry with strong government involvement. See "Dutch disease".[1] It's a strange situation in which having high income from valuable resources ends up making a state less industrial, and usually both more corrupt and poorer.

Is AI going to do this? Quite possibly. One of the symptoms is most investment capital being sucked up by the extractive industry. We're there now with AI. The current US situation is that the economy is flat except for AI companies and data centers, which are booming and are sucking up vast resources.

Most of OPEC has been through this cycle. Venezuela, Egypt, Iran, Iraq - lots of oil, but it didn't make the countries rich.

[1] https://en.wikipedia.org/wiki/Dutch_disease

[analog31]

This is something I've wondered for a long time. Does a software state become more like an oil state, or more like an industrial state?

[Animats]

It's becoming painfully clear that we have no idea how to run a society where machines do most of the thinking.

Maybe there will be a glut of smart people. Historically, that was the case until roughly WWII. Humans produced a certain fraction of smart people, but there were more smart people than jobs for them. Pikkety points out that through most of history, about 97-98% of the population was doing manual work. That started to change with the Industrial Revolution. Not until roughly WWII did an actual shortage of smart people develop. Hence the postwar boom in college education. Not until the 1990s did the nerds take over.

We think of a large group of smart people making society go as normal. Historically, it wasn't like that. The robust, the entitled, and the religious were in charge. Pikkety has a long analysis of this in his Capital and Ideology. Look who runs the Trump administration.

We're already at a smart people glut. In the US, only about half of college graduates find jobs that really need a college education. That's pre-AI. Now what?

[nazgul17]

Is it a good proxy, though? My intuition is that many economic effects play out very differently if they are limited to one country vs the whole world.

To make this more concrete, tax havens only work because most countries keep producing for real. AI will take all jobs, not just Angolan jobs.

[hithre]

Yes. Though it won’t be a small class of rich, it will be a couple of overpowerful families only. I don’t think we have any examples to compare too.

Also, If you control the AI, but there is no middle class to consume its product, everyone is poor and controlling the AI doesn’t bring that much.

There is still some products much more important and stable: food, water and therefore land control.

[oblio]

> Though it won’t be a small class of rich, it will be a couple of overpowerful families only. I don’t think we have any examples to compare too.

A couple of powerful families? Where power is transmitted from generation to generation?

I can't think of any examples either, it's a very novel concept.

Oh, wait. Romanovs. Merovingians. Carolingians. Capetiens. Bourbons. Habsburgs. Hohenzollerns. Tudors.

Extremely novel concept :-)

[gmerc]

You forgot monopolies break the “price must come down”.

[sulam]

I think their assumption is that there will not be enough people with money to pay the prices, monopoly-generated or not.

[generic92034]

On essential goods the prices can still be high enough to make everyone poor.

[matheweis]

> Prices of things that require natural resources will go up.

This suggests a potential equilibrium sooner rather than later .. few modern technological advances have been as resource hungry as AI

[Moto7451]

Yes-Anding you, if one developer is suddenly 3x more productive and does 40 hours of work in 15 with AI tools, any reasonable manager would still want the same three people to keep working at 3x productivity.

I don’t see Keynes’ theory we would all be working drastically fewer hours per week suddenly materializing due to AI. As always we’re just going to try to output more in the same time. The fact I, a manager, can “vibe code” some bugs away between meetings does not mean I will benefit from having one less dedicated engineer.

[laughing_man]

You need paying customers for whatever those developers are producing. If your market size is relatively fixed, you don't need three people anymore.

Look at it this way: if there really was a 3x market potential, why wouldn't that manager have hired six more people already?

[Moto7451]

No because you have the customers and budget in that moment for three already and I’m not interjecting that more budget is given or any taken away.

Restated, I’m not saying we’re hiring more or less because of LLM AI productivity changes. I’m rejecting the idea we need less people for all the previous reasons stated and my own two cents that we’re yet to see the reduced work hours Keynesian economics predicted as output per hour increased. We humans just keep working the same hours even if that hour is massively more productive.

This last point is well studied and not my own original thought. I’m just poorly regurgitating college level Macro Economics.

My own point I’ll add here is we’re not seeing companies bragging about their two day work weeks.

My personal experience with layoffs is that it’s all been financial engineering and the lack of nearly free financing that we had in the 2010s, again in the Pandemic, CapEx tax changes last year, and/or over hiring similar to but not nearly as massive as Google and Facebook. I worked for a European company that hired a dozen Americans to become more “US Tech Company” like and eventually let us all go two years ago once the fun money ran out when rates increased. They did a little bit of the AI babbling but realistically they couldn’t get the financing to keep it all rolling.

The companies reducing to one developer for a product are likely not doing this because of LLM AI work but likely will survive better because of it.

To your point, I’m actually living it and it’s nothing to do with AI. One of my teams was cut to 25% of its size a year ago and the whole QA team let go. Roughly this was an EBITA play. Basically the only way we get anything done is by doing what I mentioned in my earlier post where the front end dev uses LLMs to build a prototype backend they can use to support their front end expertise and the back end dev does the same for the front end. Eventually they meet in the middle and I can juggle some of the KTLO myself. Is this fun? Absolutely not. If we had the headcount back we’d be able to meet the ‘25-26 roadmap but instead we’re doing 40% of it.

[laughing_man]

Budget is based on revenue, though, at least in broad terms. If you thought you could triple your revenue by hiring a few extra programmers, you would, even if it meant raising money somehow.

I doubt you will ever see two day work weeks. Instead of cutting hours it makes a lot more sense for companies to cut people and have the remaining employees work full time. Or more. There are a lot of fixed costs for each employee, and most people would rather make more money than work less.

I worked at a company which, faced with slow period, reduced everyone's pay by 20% and switched to a 32 hour work week instead of cutting people. Most of my colleagues were bitter about it and a few even quit. Personally I was happy, but I was in a small minority.

Sorry to hear about your rocky employment experience. I feel like that's getting to be the norm these days.

[kuboble]

One thing could be that there is an extra management cost for each person to manage.

It's much easier to manage 3 people with better tools than to manage 9 people even if their output would be the same

[lanfeust6]

You have to account that expectations are set in part owing to bottlenecks, not just limits to desire/needs. Consumer expectations will adapt to the ability to improved productivity.

On the multimedia consumption (tv/film/music/games) side it seems like we are approaching a saturation point (between time sunk and desire to do so), but for business applications I don't see this being the case. Things sometimes move at a glacial pace.

[returnInfinity]

Lets take the example of Uber. If Uber ships 10x the code and features, I will still not 2x my rides.

Even if Uber makes the cost of travel to 0, I will still not 2x my rides.

[ehnto]

Uber needs to prove that they are growing though to validate their stock value, one of the tricks used to be increasing headcount to show growth.

But other tricks include new ventures, essentially public companies and VC companies have an almost unlimited appetite for new ventures, as that is how they keep validating their future growth and stock prices.

Currently financial realities are forcing layoffs, and the AI story is covering for the "growth" validation to keep stock prices going up.

But what's next? After you've fired everyone, what's the next growth story? They'll start hiring again, for new projects, even if AI can handle the coding there is still gobs of work surrounding building a software business or department that needs meat moving it forward.

[creamyhorror]

The end of ZIRP (cheap money) is precisely what ended the new-ventures/new-projects drive among big companies and turned them all to cost-cutting and maintenance mode.

[Moto7451]

This is precisely my experience. Except our roadmaps didn’t change much.

[ghaff]

0, yes you will. Or at least most would unless piblic transit were a genuinely better way to get around. But it won’t be zero as it’s bounded by the base cost of operating the vehicle.

[KellyCriterion]

How would they lower the prices to 0 in this scenario, if they have to keep operating their AI-driver-army?

[thaumasiotes]

Lowering the cost of travel to 0 would mean implementing a technology by which anyone can simply desire to be somewhere else, and they will instantly teleport to that new location.

returnInfinity is simply lying about not doing double (or more!) the amount of travel in that case.

[theobreuerweil]

I’m sure that he/she would ride a lot more if it cost nothing, but I think the point is valid: even if Uber could 10x or 100x productivity, they could not do the same with income, because there is a limit to how much people actually need to go places.

[ghaff]

That’s true but fully autonomous driving alone might double my car travel. Going into the nearest major city is a pain. So is driving into the mountains. Operating costs and time are still costs. But not having to drive would really change the game for me.

[dmurray]

Who said anything about instantly teleporting? Uber could cut the cost in money to 0 but still operate cars which are bound by the laws of physics and the rules of the road.

Maybe returnInfinity already spends 12 hours a day in Ubers, or otherwise has them satisfy all his transportation needs, and couldn't usefully double his usage of them.

[thaumasiotes]

Uber can cut the price of their service to 0.

It's impossible for them to cut the cost to 0 (without using magic), but that doesn't make it impossible for us to talk about what the cost being 0 would involve. Travel time is one of the costs you pay for Uber's service. That you don't pay it to Uber doesn't matter. If Uber reduced that cost to 0, you would use Uber a lot more.

[idiotsecant]

This is a silly easily falsifiable example, though. My Uber usage is approximately zero. If cost was zero my Uber usage would increase.

[jghn]

The concern isn't that a dev sees 3x. Rather that at some point devs become a pointless middleman in the workflow. If the manager/PM can just tell the computer what they want, why do they need the dev in the middle to do it for them?

Will we ever achieve that world? Who knows. We've heard these promises before, with things like COBOL and 4GLs. Yet we're still here coding.

[ej88]

the role of a 'developer' is ever-shifting, even now a lot of swe roles expect a good amount of product or customer-facing skills

[fnordpiglet]

Because in modern society we equate toil with morality we will toil on ever more meaningless crap tasks for food coupons for food that costs nothing to produce but is withheld through artificial scarcity to ensure meaningless toil occupies our existence because of a philosophy from the 1700’s.

[gruez]

>we will toil on ever more meaningless crap tasks for food coupons for food that costs nothing to produce but is withheld through artificial scarcity

Seems dubious given how much agricultural subsidies most western countries engage in. If anything foods are under-priced.

[ghufran_syed]

I look forward to seeing your company actually producing and selling food for “next to nothing”, given how easy it apparently is

[fnordpiglet]

We can produce enough food for everyone on earth to eat, and as more automation sets in, labor costs will decline. We are already at artificial scarcity - other than political animus rooted in racism and toil is moral there’s no reason for anyone anywhere to starve. This trend won’t reverse, but will become increasingly perverse.

For example, in my neck of the woods there’s the company Carbon Robotics, which is pretty successful. They develop autonomous tractors and a laser weeding system both of which have good adoption and sales at megafarms. They decrease the cost of herbicide application and labor significantly. That’s just one such company. It’s to the point that farms go fallow, or convert to solar, because the revenue produced farming isn’t enough to justify farming because we would be feeding people for free otherwise. That, my friend, is artificial scarcity. So keep toiling for your food coupons and convince yourself that the market is infallible.

[squeaky-clean]

Producing the food is only 10% of the challenge. How do you deliver it to everyone at no cost without rotting? How do you deal with a delivery of flour if you have no oven?

If it's so easy this is ripe for a startup to disrupt. Food is the most necessary thing to human existence. Every living person is a potential customer.

[grigri907]

I agree, we can - and should - produce enough food for everyone on earth to be happy and healthy.

But nobody is saying "people shouldn't eat for free, therefore I won't grow crops."

You said it yourself: farms are left fallow because the revenue doesn't justify the cost for the farmer. That, my friend, is basic economics, not artificial scarcity.

[dionidium]

> We can produce enough food for everyone on earth to eat,

Who is this "we?"

There's a kind of circular complaint built into all such endeavors that goes like, "we can do this, but unfortunately we as a group don't want to, but we could definitely do it if we wanted, but sadly we currently have the wrong opinions, but we can definitely do it, if only we weren't inclined not to, but we should and we will, as soon as we all come around to the truth."

Your "we" doesn't seem to want to do what you want them to do, which is why communists so often end up thinking that the real problem is the existing populace and maybe what they really need is to be re-educated or even replaced.

[CalRobert]

Bulk grains, etc are pretty cheap.

[ehnto]

That may waver, a main input across the whole chain for farming is crude oil.

[lanfeust6]

I'm not sure what this is contradicting. People can already get free food through a myriad of different institutions, including the government qua food stamps and welfare. Cheap grains are affordable by basically anyone who earn an income.

[fennecfoxy]

Turns out, plants have been growing all by themselves for millions of years. Lmao.

[sulam]

Yeah those idiot farmers with all their machinery and services are really missing out on your trenchant observations.

[fennecfoxy]

No, what I'm really saying is that the baseline of plat growing is "it works by itself". Anything above letting nature take its course is a force multiplier.

As opposed to other technologies; microchips do not grow on trees.

[SequoiaHope]

I agree completely, but you forget that another option is that the powerful will use these tools to make us suffer and we will be powerless to stop them.

[dandanua]

That's the default option. Power seeks only more power, sharing is worthless to it, except as a temporary instrument. And AI is a perfect tool to concentrate even more power in tiny hands.

[throwuxiytayq]

Well, we could vote. In some parts of the world, at least.

[fennecfoxy]

You would vote. Everyone else would vote for "their party" regardless of policy cause tribalism. Plus politics always follows the same old pattern "AI took your jobs? We generate food etc so cheaply now it may as well be free? Our robots could be building human shelters for free? Those are _small_ problems, if I get in I'll stop those dirty immigrants coming in! I'll make it so that men act like men and women act like women and they both use the correct bathroom! I'll get rid of the gays, too!"

And it's not even just the right leaning that are tricked. The left get thrown a bone now & then on some trivial thing like getting gay marriage (which shouldn't have even been an argument, more of a realisation) meanwhile nothing is done about corporate tax evasion, improving labour laws etc - or they lean too far into their voterbase and allow rampant immigration, welfare handouts without checks & balances etc.

And all of this because managing a large group of human is pretty much impossible. We need to reorganise into smaller groups.

[returnInfinity]

And look at what that led to. Democracy is not a panacea.

[csomar]

I like your optimistic view. The reality is that AI concentrates power and when power concentrates, the rulers can dictate. Democracy is not just voting but also a productive populace that has a voice in the production process.

The people on the top are not going to share sh*t. That's just not how greed works.

[Epa095]

Progressive taxes hit wage earners, while its the owners who will reap the benefits of AI. We won't get a share of the fruits without solving how to properly tax wealth(in a world where money is power, and its trivial for rich people to move to a different tax regime), which unfortunately seems tabu in large parts of the western world.

[BrenBarn]

That's true, although "progressive taxes" can be construed more broadly. Taxes on unrealized capital gains would be a start.

[sofixa]

> Taxes on unrealized capital gains would be a start

A start to what? There is no way of taxing unrealised capital gains that makes sense. You're taxing theoretical value that may or may not actually exist. Rebates (e.g. you're taxed on theoretical current value, but when you realise the actual gain, you get back the difference if there is any) just moves the problem around, makes everything complicated, and penalises attempting growth.

[bdangubic]

> There is no way of taxing unrealised capital gains that makes sense.

There is - tax it when it is being used as realized gain (e.g. when you get a loan like our billionaires do). fine to leave it alone as unrealized and not be taxed but as soon as you use it as real/tangible thing you gotta pay taxes, it is that simple

[BrenBarn]

> You're taxing theoretical value that may or may not actually exist.

If it's real enough to, say, use it as collateral for a loan, it's real enough to tax.

> penalises attempting growth

There is a lot of growth going on that should absolutely be penalized.

[Scarblac]

It's not hard. Tax the amount the stocks are valued at at january 1.

Make exceptions for investments in illiquid things.

[sofixa]

Ok, and on the 2nd the price crashes, company goes bankrupt, stock is worth zero. You were taxes on theoretical value that you can't sell at to pay that tax.

What then?

[BrenBarn]

For me, a lot of these issues become immaterial if the threshold is high enough. If the threshold for a particular tax is assets over $100 million, or a billion, then the answer can just be "you are totally screwed" and I'm basically fine with that. If you don't want that risk, just don't get that rich.

[squeaky-clean]

This would destroy every retirement investment vehicle for the middle class more than it would affect the 1%

[BrenBarn]

That can be mitigated by setting high thresholds on the whole process (e.g., the tax doesn't apply if your total net worth is under $10 million).

[dontwannahearit]

That doesn't sound like it could be gamed, at all.

[slikc]

Great, i don'trust the government with my pension retirement. Put all my life savings(that i already paid taxes on) on an investment portfolio. Now the government wants a cut on my unrealized gains as well. Do you realize each time the money changes hands it gets taxed? Do you trust the gov to be as effective and as efficent with that money att all?

[bandrami]

As of now, at least, nobody is actually seeing an increase of productivity from AI that shows up in any measurements anybody is making. So some of this talk is really getting ahead of the facts on the ground.

[laughing_man]

We may very well end up with similar prices, a few stupendously wealthy people, and the rest of us living on the dole.

[baxtr]

I wouldn’t say it’s impossible but I’d argue from all we know now highly unlikely.

Why? Assume a company has a high margin because they used AI and reduced their workforce by 10x. What usually happens is that a new competitor comes in and offers the same for half the price.

Since AI is lowering the bar for entry this process should be even faster than previously.

[Epa095]

What usually happens is that that competitors then gets disappeared. Either by a happy ending (it gets bought up), or it gets squeezed out.

Monopolies arise naturally unless we work hard to avoid them.

[baxtr]

Monopolies stay stable only with a sustainable competitive advantage, eg through network effects or patents.

With no barriers, margins get squeezed out rapidly.

[bluefirebrand]

> Assume a company has a high margin because they used AI and reduced their workforce by 10x. What usually happens is that a new competitor comes in and offers the same for half the price.

Wouldn't you need 10x the number of competitors to get back to the same amount of employees, assuming they are running with similar workforces?

[baxtr]

Yes, true for existing companies.

On the other hand we still don’t know which new companies will be created that couldn’t be be created before due to unfavorable economics.

[gosub100]

> We can do this, in a democracy.

In a democracy where corporations have 0 representation, I would agree with you. However, they do have representation in a way that is invisible to see and impossible to quantify. And it goes beyond citizens united. There is an invisible hand pressing on the scales.

[intended]

Eh, the line of better quality output is suspect.

I’ve been looking at AI productivity gains, and the idea that it’s better quality output is the weakest claim that can be made.

There ARE more software project starts, yes. This also means it’s a more crowded field to be noticed in.

Also productivity gains are HIGHLY variable. I see some people being 2x more effective, most people publicly willing to claim 30% efficiency gains, and a more likely 15% gain for most people.

At the same time, I hear of cases in content and media where it’s essentially a wipeout. I know of a story where a firm went to an advertisement agency with an AI generated video they wanted, and only wanted the animations cleaned up.

When they got the quote for the costs to have it done professionally, they decided to just go with the AI generated video.

Fraud is another area which is seeing a boom. The degree of information pollution we are seeing has also seen a step change.

This matters because all the rosy eyed theories of productivity gains from AI do not account for changes to our shared information commons.

The business cases that come to mind are Fast Fashion, and Coke vs Pepsi, and Tobacco.

[bryanrasmussen]

>better quality output.

that doesn't seem to follow necessarily.

[laffOr]

Rich people will consume most of the output. This is how life worked for most of the last 10k years, didn't it?

[throwaway290]

> But the same amount of economic output, probably more, will be produced because of AI

> Society as a whole will be better off because there is more output

> better quality output

citation needed

> By whom will that output then be consumed?

So there's this thing called "waste"...

> If people don't have jobs they don't have money to buy and therefore ... prices will have to come down!

Yeah, and falling prices and unemployment are sure signs of boom and prosperity...

> government that shares the fruits of AI with everybody, by way of progressive taxation. Government, use the taxes you collect to give us free food

and you think though that never happened is now possible because?

[libertine]

Prices don't have to come down, in fact I doubt they will ever come down.

Maybe you will have a class that can afford things and services, and another class who can only afford services and service based things.

Some one own things, others will rent them fractionally.

[overfeed]

> If people don't have jobs they don't have money to buy and therefore ... prices will have to come down

Here's the one trick the oligarchs will not tell you: they intend to bill the government directly, they won't care if unemployment rises to 80%. They'll keep it up for however long the taxes and debt will last, and then jet off to their bunkers to usher in what comes next - or wait out the chaos.

[xbmcuser]

The problem is not type of government but rather the type of economic system people in the west especially in the US have been brainwashed into conflating democracy with capitalism. Europe was able to keep some socialist values for a few decades after world war 2 but capitalists were able to wipe a lot of in the last 20-30 years.