And once you realize this, the entire scenario falls apart, and ultimately it’s anti-capitalist pablum that has it’s bottom line already written, as shown by Alex Armlovich here:
Bad econ. “White collar workers switch to Doordash, driving down real wages there too” is partial equilibrium thinking
Robot firms only grow if they’re producing more real goods & services. If production is growing, real incomes are rising not falling. No doom loop!
If production is growing but somehow consumption stalls, that’s just a failure of monetary & fiscal policy. Cut rates to zero quickly; below zero, fiscal policy kicks in to redistribute income to consumers & restore consumption growth to trend
Either there’s no doom loop in the first place, or else New Keynesian monetary & fiscal policy kicks in to close any emergent wedge between robot output & human consumption
This piece is ultimately just anticapitalist pablum (teasing a belief that most markets are just scams and rent seeking in the intro!)--and after that, the piece simply underrates or misunderstands the stabilizing powers of liberal democratic Keynesian capitalism to keep output & consumption in balance
We don’t have to allow what @delong calls “a failure of the exchange mechanism” in the future any more than we did in the 1930s
Remember the top line, where they talked about this being a model of left tail risk (for investors).
They are predicting specifically that there is reasonable odds of a case where the stimulus is underbaked and too late, causing significant deflation, and a large number of past claims on future economic activity do not survive the restructure, and so every actor taking interest rate risk is at risk of getting blown out by deflation, or taking huge nominal losses from a default due to their counterparties getting blown out by deflation.
@Noosphere89 I notice that I am confused. Before the rise of the AIs a car factory would have to pay white-collar workers for things like engineering or management, blue-collar workers for, well, working with the machinery making cars out of metal, plastic, etc, and the companies which produce metal and other resources. After the rise of AI white-collar work flies out of the window, and resources become the main bottleneck. Does it mean that the main aim of altruists is to ensure an egalitarian distribution of property rights to resources on Earth and in space?
And once you realize this, the entire scenario falls apart, and ultimately it’s anti-capitalist pablum that has it’s bottom line already written, as shown by Alex Armlovich here:
Remember the top line, where they talked about this being a model of left tail risk (for investors).
They are predicting specifically that there is reasonable odds of a case where the stimulus is underbaked and too late, causing significant deflation, and a large number of past claims on future economic activity do not survive the restructure, and so every actor taking interest rate risk is at risk of getting blown out by deflation, or taking huge nominal losses from a default due to their counterparties getting blown out by deflation.
@Noosphere89 I notice that I am confused. Before the rise of the AIs a car factory would have to pay white-collar workers for things like engineering or management, blue-collar workers for, well, working with the machinery making cars out of metal, plastic, etc, and the companies which produce metal and other resources. After the rise of AI white-collar work flies out of the window, and resources become the main bottleneck. Does it mean that the main aim of altruists is to ensure an egalitarian distribution of property rights to resources on Earth and in space?