I am a great believer in the ability to markets to find solutions, but I don't dare hazard a prediction of what is going to happen when Adam Smith's animal spirits combine with AI and the tech world's preference for productivity (or the appearance thereof) over people.
Well, I totally follow the reasoning but for one blindspot, even staying on an economical approach: this displacement of employees will also be a displacement for demand, whether direct demand (once most of these people have no income, there goes most of their demand that drives a lot of modern economies, be it goods beyond basic necessity, and virtually all services, and this includes the financial markets, hence the wealth of the "tech bros") or indirect demand (another significant part of the economy comes from services that are driven by the fact that business have employees: think commercial real estate and facility management, IT systems and hardware, payroll, child daycare, public transportation, etc.).
The whole argumentation on the disappearance of work - but also the one on UBI - relies on the assumption that the economy will stay the same, and it is just the wealth distribution that will change. Take that assumption away, and this becomes far less predictable. Not necessarily better, far from it, but not necessarily worse either. I mean, the 90% compression you mention: beyond the workforce, this also means that everything ends up costing 90% less - I guess this is what the storytelling about Abundance is about, but I haven't looked it up much, but to stay with the links from your article, the 13'500$ a year mentioned by Altman look different if everything is 90% cheaper... I know it is not that simple but it is not totally far-fetched: think about the change in big cities' real-estate market if office demand drops by 90% (why people would want to live there if they have no job there is a different question).
I do realize this becomes mind-blowing and virtually impossible to predict - there is an infinite number of variables. Don't get me wrong, I am convinced some of it will happen (is happening), but these actions will have consequences on the economy and this will generate feedback loops and change the variables.
Thanks for the insightful response, derdide, you raise a lot of interesting points!
I think you've hit on the issue Henry Ford identified a century ago - employers want to pay their staff as little as they can get away with (which will soon be zero, because they won't be employing them in the first place) while wanting lots of cashed-up consumers around to purchase the goods or services their business sells.
I haven't got any idea how that fundamental contradiction gets resolved in a capitalist system, which is why I expect AI will inevitably involve a transition to some type of post-capitalist economic system.
But as you say, collapsing prices might just allow the circle to be squared - $13,500 might allow people to live like kings if the price of everything – especially housing – drops by 90 per cent.
But as you note in conclusion, the changes that are soon coming will be so disruptive that it's difficult to predict how the great AI disruption will play out.
I don't know whether it is post-capitalist, but I expect a transition away from the "classical" employee-employer relationship, and I'm also wondering whether the corporation concept (as in these gigantic companies of - currently - thousands of people all over the world) still make sense. Replaced by what? No clue. But there will be demand for "stuff" and there will be supply for it, and the market dynamics will remain.
I am a great believer in the ability to markets to find solutions, but I don't dare hazard a prediction of what is going to happen when Adam Smith's animal spirits combine with AI and the tech world's preference for productivity (or the appearance thereof) over people.
Yes, I suspect a lot of people's faith in markets - and the state, for that matter – will soon be sorely tested!
Well, I totally follow the reasoning but for one blindspot, even staying on an economical approach: this displacement of employees will also be a displacement for demand, whether direct demand (once most of these people have no income, there goes most of their demand that drives a lot of modern economies, be it goods beyond basic necessity, and virtually all services, and this includes the financial markets, hence the wealth of the "tech bros") or indirect demand (another significant part of the economy comes from services that are driven by the fact that business have employees: think commercial real estate and facility management, IT systems and hardware, payroll, child daycare, public transportation, etc.).
The whole argumentation on the disappearance of work - but also the one on UBI - relies on the assumption that the economy will stay the same, and it is just the wealth distribution that will change. Take that assumption away, and this becomes far less predictable. Not necessarily better, far from it, but not necessarily worse either. I mean, the 90% compression you mention: beyond the workforce, this also means that everything ends up costing 90% less - I guess this is what the storytelling about Abundance is about, but I haven't looked it up much, but to stay with the links from your article, the 13'500$ a year mentioned by Altman look different if everything is 90% cheaper... I know it is not that simple but it is not totally far-fetched: think about the change in big cities' real-estate market if office demand drops by 90% (why people would want to live there if they have no job there is a different question).
I do realize this becomes mind-blowing and virtually impossible to predict - there is an infinite number of variables. Don't get me wrong, I am convinced some of it will happen (is happening), but these actions will have consequences on the economy and this will generate feedback loops and change the variables.
Thanks for the insightful response, derdide, you raise a lot of interesting points!
I think you've hit on the issue Henry Ford identified a century ago - employers want to pay their staff as little as they can get away with (which will soon be zero, because they won't be employing them in the first place) while wanting lots of cashed-up consumers around to purchase the goods or services their business sells.
I haven't got any idea how that fundamental contradiction gets resolved in a capitalist system, which is why I expect AI will inevitably involve a transition to some type of post-capitalist economic system.
But as you say, collapsing prices might just allow the circle to be squared - $13,500 might allow people to live like kings if the price of everything – especially housing – drops by 90 per cent.
But as you note in conclusion, the changes that are soon coming will be so disruptive that it's difficult to predict how the great AI disruption will play out.
I don't know whether it is post-capitalist, but I expect a transition away from the "classical" employee-employer relationship, and I'm also wondering whether the corporation concept (as in these gigantic companies of - currently - thousands of people all over the world) still make sense. Replaced by what? No clue. But there will be demand for "stuff" and there will be supply for it, and the market dynamics will remain.