Transformative AI will demand a rethink of the entire economic system. The world economy is based on an underlying assumption that most humans are essentially capable of being productive in some real way that generates value. Once that concept is eroded, and my intuition is that it will only take a surprisingly small percentage of people being rendered unproductive, some form of redistribution will probably be required. Rather than designing this system in such a way that ‘basic’ needs are provided/paid for, I think a percentage of output from AI gains should be redistributed. After all, defining ‘basic’ needs is hard-people have drastically different definitions that change over time and location. The basic needs of someone in 1000AD are obviously not the same as in 2023.
If this approach is used, it also lessens popular anxiety about AI. They have direct benefits that scale with the success of it. Most likely, the hardest part of all this is changing an economic system that is highly entrenched.
i’m generally receptive to the idea that our economic systems could be changed significantly for the better, but looking historically i don’t think any of this “demands” a rethink of the dominant economic system in play today. it will mutate in the same patchwork way it has ever since the invention of the printing press (an early device that turned a previously scarce resource into an abundant one). it somehow made it through both the explosive decrease in energy scarcity of the industrial revolution and the explosive decrease in information scarcity of the past 50 years.
i think there’s some argument here that the periods which experience outsized economic growth are largely those same periods which experienced rapid decrease in scarcity of some underlying resource, though i don’t have the data to properly claim that. on the other hand, the industrial revolution while successful in economic terms had some pretty terrible social consequences at the time: generally poor living and working conditions for large segments of the population. the response to this was largely social and political: unions, regulation. the actual economic system has proven itself to be robust to these kind of changes and also faster at responding to them than the social/political systems, so i think the more appropriate focus is on the latter: are our social and political systems of today up to the task of handling another rapid decrease in scarcity?
I don’t think AI in the long run will be comparable to events like the industrial revolution (or anything, historically) because AI will be less tool like and more agent like in my view. That is not a situation that draws any historical precedent. A famous investor, Ray Dalio made a point something along the lines that recessions, bubbles etc (but really any rare-ish economic event) are incredibly hard to model because the length of time the economic system has existed is actually relatively short so we don’t have that large a sample size. That point can be extrapolated across to this situation almost exactly. Technological revolutions are incredibly rare and we do not have enough of them to find two that are very similar. I don’t think AI is going to be like anything that came before and I don’t see why the economic system would be durable towards shocks like it.
AI will be less tool like and more agent like in my view.
it’s not clear to me that this distinction is real, or would matter even if it is real. from my perspective, looking up, i am an agent within the company i work within. from the employer’s perspective, looking down, i am a tool to drive revenue. this relation exists all the way up through to the C-suite, and then the hedge funds and retirement fund managers, and back around to the employees who own those funds. in our capitalist system of ownership every agent is also someone else’s tool.
recessions, bubbles etc (but really any rare-ish economic event) are incredibly hard to model because the length of time the economic system has existed is actually relatively short so we don’t have that large a sample size. That point can be extrapolated across to this situation almost exactly.
our economic systems have weathered all these events. if your point is that AI is of the same class as bubbles/recessions, then shouldn’t the takeaway be that our economic systems can handle it — just expecting it to be as painful as any other economic swing?
i suppose i probably just don’t understand what you mean when you speak of “rethinking” the economic system. that sounds like a revolutionary change, whereas for the dominant economic systems today, looking back i can trace what is more of an evolutionary path from the dawn of cities/trade up to the present day. the only time i can say we’ve “rethought” our economic system is when various countries tried to pivot from their established distributed system to a centrally managed system of production more or less “overnight”.
Transformative AI will demand a rethink of the entire economic system. The world economy is based on an underlying assumption that most humans are essentially capable of being productive in some real way that generates value. Once that concept is eroded, and my intuition is that it will only take a surprisingly small percentage of people being rendered unproductive, some form of redistribution will probably be required. Rather than designing this system in such a way that ‘basic’ needs are provided/paid for, I think a percentage of output from AI gains should be redistributed. After all, defining ‘basic’ needs is hard-people have drastically different definitions that change over time and location. The basic needs of someone in 1000AD are obviously not the same as in 2023.
If this approach is used, it also lessens popular anxiety about AI. They have direct benefits that scale with the success of it. Most likely, the hardest part of all this is changing an economic system that is highly entrenched.
i’m generally receptive to the idea that our economic systems could be changed significantly for the better, but looking historically i don’t think any of this “demands” a rethink of the dominant economic system in play today. it will mutate in the same patchwork way it has ever since the invention of the printing press (an early device that turned a previously scarce resource into an abundant one). it somehow made it through both the explosive decrease in energy scarcity of the industrial revolution and the explosive decrease in information scarcity of the past 50 years.
i think there’s some argument here that the periods which experience outsized economic growth are largely those same periods which experienced rapid decrease in scarcity of some underlying resource, though i don’t have the data to properly claim that. on the other hand, the industrial revolution while successful in economic terms had some pretty terrible social consequences at the time: generally poor living and working conditions for large segments of the population. the response to this was largely social and political: unions, regulation. the actual economic system has proven itself to be robust to these kind of changes and also faster at responding to them than the social/political systems, so i think the more appropriate focus is on the latter: are our social and political systems of today up to the task of handling another rapid decrease in scarcity?
I don’t think AI in the long run will be comparable to events like the industrial revolution (or anything, historically) because AI will be less tool like and more agent like in my view. That is not a situation that draws any historical precedent. A famous investor, Ray Dalio made a point something along the lines that recessions, bubbles etc (but really any rare-ish economic event) are incredibly hard to model because the length of time the economic system has existed is actually relatively short so we don’t have that large a sample size. That point can be extrapolated across to this situation almost exactly. Technological revolutions are incredibly rare and we do not have enough of them to find two that are very similar. I don’t think AI is going to be like anything that came before and I don’t see why the economic system would be durable towards shocks like it.
it’s not clear to me that this distinction is real, or would matter even if it is real. from my perspective, looking up, i am an agent within the company i work within. from the employer’s perspective, looking down, i am a tool to drive revenue. this relation exists all the way up through to the C-suite, and then the hedge funds and retirement fund managers, and back around to the employees who own those funds. in our capitalist system of ownership every agent is also someone else’s tool.
our economic systems have weathered all these events. if your point is that AI is of the same class as bubbles/recessions, then shouldn’t the takeaway be that our economic systems can handle it — just expecting it to be as painful as any other economic swing?
i suppose i probably just don’t understand what you mean when you speak of “rethinking” the economic system. that sounds like a revolutionary change, whereas for the dominant economic systems today, looking back i can trace what is more of an evolutionary path from the dawn of cities/trade up to the present day. the only time i can say we’ve “rethought” our economic system is when various countries tried to pivot from their established distributed system to a centrally managed system of production more or less “overnight”.