I’m pondering editing the post to discuss this explicitly and acknowledge that it does weaken the analogy with AGI and humans. The issue is that AGI could bring down the costs more broadly than tractors did, which raises the question of why the marginal revenue product of labor would fall more quickly than the subsistence wage?
Thinking out loud, the thing is that there are analogs to the non-feed upkeep costs (shelter and farmer/veterinarian labor) for humans. Though some work, like composing poems, requires little more than physical sustenance to be performed well, most human production requires complementary inputs, principally various equipment or machinery. The question then comes down to whether you want to invest in such human-augmenting equipment as opposed to a fully automated solution.
For example, suppose total production is AhLαK1−αh+ArKr. Then optimal capital allocation means Kh/L∝(Ah/Ar)1/α so that human-augmenting capital falls as robot productivity increases relative to human-in-the-loop productivity. Then the real wage, the marginal product of labor, is proportional to Ah(Ah/Ar)1−αα. If both Ah and Ar grow exponentially, the condition for the wage to remain constant is that Ah grow at a rate 1−α times the rate at which Ar grows (where 1−α is traditionally taken to be 1/3). (Google Sheet simulation)
In this toy model, it is conceptually possible that human-augmenting technology, Ah, advances sufficiently quickly relative to full automation, Ar, to keep humans fully employed (at above subsistence wages) indefinitely. (And sufficiently deliberate policy could help.) But if, instead, Ah continues growing at 1-2% annually while Ar takes off at 10%+ rates of growth, human labor eventually becomes obsolete (in this toy model).
This seems like a whole other essay, rather than an edit to this one, though. I’m guessing the analogy to Ah for horses was relatively fixed during 1910-1960.
I think the question of ai controlled humanoid robots vs humans and horses vs cars is interesting. RethinkX on this subject is kinda scary. Humanoid robots amortized over 3 years and say 16-20 hours a day quickly go below minimum wage in America so the question of whether the economy has enough tasks for such a labor revolution that starts out not very general, but becomes more general use over time. So I encourage your thoughts on this topic, as I don’t know what framework to use to think about it
I’m pondering editing the post to discuss this explicitly and acknowledge that it does weaken the analogy with AGI and humans. The issue is that AGI could bring down the costs more broadly than tractors did, which raises the question of why the marginal revenue product of labor would fall more quickly than the subsistence wage?
Thinking out loud, the thing is that there are analogs to the non-feed upkeep costs (shelter and farmer/veterinarian labor) for humans. Though some work, like composing poems, requires little more than physical sustenance to be performed well, most human production requires complementary inputs, principally various equipment or machinery. The question then comes down to whether you want to invest in such human-augmenting equipment as opposed to a fully automated solution.
For example, suppose total production is AhLαK1−αh+ArKr. Then optimal capital allocation means Kh/L∝(Ah/Ar)1/α so that human-augmenting capital falls as robot productivity increases relative to human-in-the-loop productivity. Then the real wage, the marginal product of labor, is proportional to Ah(Ah/Ar)1−αα. If both Ah and Ar grow exponentially, the condition for the wage to remain constant is that Ah grow at a rate 1−α times the rate at which Ar grows (where 1−α is traditionally taken to be 1/3). (Google Sheet simulation)
In this toy model, it is conceptually possible that human-augmenting technology, Ah, advances sufficiently quickly relative to full automation, Ar, to keep humans fully employed (at above subsistence wages) indefinitely. (And sufficiently deliberate policy could help.) But if, instead, Ah continues growing at 1-2% annually while Ar takes off at 10%+ rates of growth, human labor eventually becomes obsolete (in this toy model).
This seems like a whole other essay, rather than an edit to this one, though. I’m guessing the analogy to Ah for horses was relatively fixed during 1910-1960.
I think the question of ai controlled humanoid robots vs humans and horses vs cars is interesting. RethinkX on this subject is kinda scary. Humanoid robots amortized over 3 years and say 16-20 hours a day quickly go below minimum wage in America so the question of whether the economy has enough tasks for such a labor revolution that starts out not very general, but becomes more general use over time. So I encourage your thoughts on this topic, as I don’t know what framework to use to think about it
Interesting, this is the first I’ve heard of them. Thanks, I’ll check this out: https://www.rethinkx.com/labor