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Everything IT does is slightly simplifying things we already could do. We could already telegraph someone across Atlantic, we could extract knowledge in library, we could do accounting. The speedup is small compared to horses vs steam power for transportation for example.
However, almost all of these are purely private benefits that do not show in any ledger. This is at least in part why the Internet seems to have had such small impact on gdp.
How about AI? So far, even more private benefits than the Internet.
The Industrial Revolution was basically the height of western civilization, and the modern revolution is the beginning of something else. It’s not surprising that the metrics we developed in the previous civilization can’t really account for the gains we’re seeing now.
My opinion on that is, it's not such a big gain compared to legacy banking with checks, phone calls etc. All the operations you can do now you could do with legacy banks, just a bit slower. Given banking is not something you do every second, the overall speedup is tiny.
> We could already telegraph someone across Atlantic, we could extract knowledge in library, we could do accounting. The speedup is small compared to horses vs steam power for transportation for example.
The speedup is much larger than horses vs steam power. How much time would it take you to find some scientific article if your library did not stock journal it was published in? You'd have to write request to get that issue and then wait few weeks before it arrives. Now you can get it basically instantly.
But seriously, your ability to expediently research just doesn't compare to the ability to ship a metric ton of freight across the country without marshalling an army of people for months on end. As one example.
You can't make people who have basically been, their entire lives, coding variations of JavaScript "punch the monkey" abusive ads understand the impact the Internet had on the world.
Does not mean that some of these gains have not been wasted or there has not been in sense waste introduced to waste excess productivity and efficiency. IT certainly has made this waste lot more easy to do.
AI powered robots will be flexible (once they work reliable) ..
In the accepted framework of global trade, where exchange value is either confounded or accepted as a use value, this is a correct stance. I think where we'd end up disagreeing is on that equality. I don't believe that just because you can sell targeted advertising for millions of dollar, that it's actually millions of dollars worth of social use value. We'd have to bicker about the definition of use value, obviously, but I find it hard to imagine an argument for why writing adware at Google is worth the money people are getting paid for it, relative to useful manual labour. In much the same way I don't believe the CEO's labour is worth 100x what the employee is paid, I don't believe the Google Engineer is worth 5x the gardener maintaining a park.
This spoken separation of use value and exchange value is missing from most internet opinions on the economy.
I hope that somewhat helps you understand how the stance can exist, even if I haven't explained it deeply enough for you to actually accept it.
1) Give some (frontier) model my symptoms, circumstances, etc.
2) Model outputs a list of possible causes, some more urgent than others
3) If its not something benign, I go to a doctor
4) Doctor orders blood work, checks me up, and I discuss possible diagnoses with them.
Around 60-70% of the time the model was correct about the illness, the doctor just confirms it with empirical evidence. This means that I am able to pretty effectively triage myself, saving me a considerable amount of time.
Now its already the case that the role of doctors is diminishing in medical practice, and Nurse Practitioners are performing the majority of the same work. Armed with AI tools, Nurse Practitioners are effectively at the same level of skill and knowledge as an actual MD, and we would need far less MDs, then to do medical care, reserving them for specialty cases, expertise where AI tends to fail. So there is both more room for particular and intricate medical research and care for the most stubborn conditions, and more capacity for care in general.
In the long run, this will lead to improved outcomes, greater cognitive and physical health, and lower costs for child rearing. All of this is an economic boon. And all of it will not be apparent in the numbers for decades. I believe this is the case for the majority of the processes that AI is improving.
Besides that 60-70% is not an acceptable hit rate and there’s already early evidence of skill atrophy in AI saturated fields like radiology. We need way more people offering more personalized care, using more judgement and offering more compassion, not a chat interface that says “you’re totally right to push back, the post nasal drip was the smoking gun.”
Maybe some forms of ML, even LLMs, become part of the solution to that shortfall, but we’re a long way from proving that’s a net positive let alone a big leap forward.
I somehow doubt that AI will accelerate growth constantly as the world has inertia and I'm not sure AI is sustainably increasing our ability to change. On the other side, if there is a technology that can do that it could be intelligence.
You don't see the internet in terms of dollars because it often makes it cheaper to do something that was possible before. That looks like a negative, in terms of GDP. In terms of what people can do, and can afford to do, though, it opens enormous doors. Want some information? Don't need a library. Want to plan a trip? Don't need a travel agent. Want to download some free software? Don't need a floppy and a friend who has a copy. And so on.
But if you look around, you see things like Amazon. They don't exist without the internet. You see Facebook. Youtube. Netflix existed, but they became a lot more convenient - no need to run to a store. There's a lot that was created that people found valuable, but didn't have to pay for (Amazon excepted). There's value, but because the nominal charge is $0, it doesn't show up in the GDP statistics.
This isn't as much of a positive as you seem to be implying. You can just go to a library. Or a travel agent. And it's probably better for you. It's not a downside.
The acceleration of the speed of technological growth seems real, look how fast AI research and tools are advancing seemingly on a daily basis, rather than innovation happening in months, years or decades long timescales.
Think about the rate of progress of the steam engine, and then think about technology since the splitting of the atom. Warp speed!
This is both correct and incorrect.
US and China tech did totally skyrocket in the 21st century and pulled the GDPs of both the US and China up like mad.
The one western continent that had none of the Google, Amazon, Netflix, Alibaba, Tencen, Micron, SK Hynix, NVidia, that's nowhere in drones, etc. saw his GDP (in USD and inflation adjusted) barely moving and that'd be the EU.
The EU now has an economy based, as someone pointed out the other day, on selling overpriced "luxury" (at least pretending to be luxury) handbags assembled in China: in the Top 100 companies by market cap besides ASML the EU has L'Oreal and LVMH. That and fake public companies that are actual state monopolies (like spanish banks and french oil companies). It's really totally pathetic.
The EU, even though the public debt of its countries grew like mad, is where to look at to see a continent that had hardly any GDP growth in the 21st century.
But I'd say that it's precisely because the EU missed the Internet: it was all chinese (and now asian too) tech companies.
If this first quarter of the 21st century is of any indication, it looks like history is repeating: the EU is, once again, absolutely nowhere when it comes to AI (yay, Mistral, but we all know how that one is doing) and shall, once again, continue to see the public debt of its countries grow like there's no tomorrow (France is at 6% deficit of its GDP seen the insane spending of the state) and its GDP hardly move at all.
But AI leading to no growth in the US and in Asia? I think it's a bit early to call that.
It is however crystal clear in what direction both your examples are headed and I’m not sure it’s the wonderland you seem to think it is. China is an authoritarian hell-hole and the US is.. I don’t know there is even a word for it. Let’s just say I’m glad to be on this side of the pond.
If GDP increases, that’s just money left on the table by the ultra wealthy.
What is "bad"? Hunger?
To be fair, the industrial revolution was a 100 year period or so, computers, web, cloud, mobile and AI will likely be perceived in the same historical framework.
AI will take some time to pan out in terms of productivity, but it will.
A better comparison might be railroads.
[0] https://en.wikipedia.org/wiki/Panic_of_1873
And yet all of the track laid was ultimately put to good use, and it was transformative.
Elon's 'magic' is attracting legions of retail investors - Dentists, Lawyers, others who keep those valuations high.
Some of them believe, on some level, that he's going to put 1 million people on the moon. After all - why would he strike a deal with the board for a bonus on that target?
Because it's a fake deal, intended to give legitimacy to a scammy proclamation.
Altman's 'magic' is the nauseating narrative around 'the singularity' and 'AGI'
Tesla, Space X, AI - are all very real, they're doing materially good things, but that's actually what makes it dangerous.
'NFTs' are narrative nonsense based on nonsense.
AI and Space are narrative nonsense based on something legitimate ... which gives the backers an inch of ground to stand on, which ironically imbues some of them ridiculous cognitive impairment.
And a lot of populist fools all around, carving out niches on ideological or populist territory (aka 'Elon Bad', 'Elon God', 'AI fake', 'AI will do everything') etc.
The truth is extra hard to discern because the future does actually depend on 'the herd' - and how much they can be convinced, and in a sustainable way etc..
Some degree of 'narrative' might bode well for everyone, too much is fraud.
Railroads were a perfect opportunity for overstatement.
Our system of capitalism is partly at fault: builders have no choice but to 'play the game' to some extent, they have to balance that with reality, and hopefully morality.
Every industrial economy seems to reach a plateau of diminishing returns, and it actually seems to be reached faster the faster industrialization is implemented. We see it in Europe, in the US, in Japan, in South Korea and it seems China is well on their way there, too: Cheap energy is diminishing (shale oil fracking, increased cost of building nuclear, etc) and exploitable labor has mostly been pushed as far as it can (dwindling fertility rates across the globe). Thus, we place our hope in automation, which has also been taken incredibly far already.
LLMs really must be some magic special sauce if they're to automate us into a new era of explosive growth. So far I don't think they're living up to that promise.
I see the industrial revolution as the invention of the cart. It made horses more productive. Then the car replaced horses.
It is taking people longer to wrap their heads around the reality than I thought it would. If there was a competitive human species on the planet getting smarter by the day, people would get it.
It is hard to maintain awareness of something which presents questions with no obvious answers. The one answer I have, is we need to clean up the ethics in our systems. Ethics are not costs against value, they are the full accounting and optimization of all value.
More intelligent creatures than us, not held back by our our outdated biologically instincts, won't have any trouble with that game theory.
So ethical systems are not just a shield for us as individuals, but also of inherent value to new forms of self-interest.
But that won't help us, if we don't push to align and strengthen our own systems now. And reverse the concentration of power in corrupt individuals who demonstrate every day that they are not interested in the wellbeing of humans in general.
This is urgent. We do not have a lot of time to effect this change.
The fundamental flaw of the constitution is that it had no ethics built in, it’s up to the voters to pick better, our press to report truthfully without bias and those have failed as well.
Yes, that would have been a really good intent to make explicit, to guide the courts.
I think of that when the Supreme Court or a state court rules process is more important than a convicts demonstrable (with new evidence that has come to light) innocence. Really horrific given that one out of eight death row inmates are exonerated. That level of bad convictions being overturned despite all the difficulties doing that, strongly suggests that a great many innocent people are still executed.
Another thing I wish the constitution did: Explicitly and universally enshrine decentralization. Not just the implicit decentralization of checks and balances only within the government.
I.e. party seat limits, independent federal and state parties, etc. For any kind of political group or coordination.
Where enough decentralization is enforced, a stable majority interest is maintained (even as who is the majority may change) for no minority to be able to break those requirements.
But where centralization is allowed, it is an eternal fight to hold it back.
Things like accepting germ theory (so treating sewage and drinking water), the development of vaccines and antibiotics, the creation of mechanical motion (previously biological methods, in the horse, was the fastest mode), electricity (artificial light that did not entail burning things), mechanical/electrical calculation of numbers.
These jumps in productivity/efficiency will never happen again, so expecting corresponding jumps in growth that they led to is not reasonable:
* https://en.wikipedia.org/wiki/The_Rise_and_Fall_of_American_...
Certain new inventions and refinements of existing ones will continue, but it is hard to think of things that will improve people's lives as, say, clean drinking water.
One things that could be done is more redistributive tax policies, like existed post-WW2, so as to better spread around the current income and wealth in a less concentrated way.
https://en.wikipedia.org/wiki/Panic_of_1893
Rising productivity either means more stuff or lower prices.
"England was to become the ‘workshop of the world'; all other countries were to become for England what Ireland already was — markets for her manufactured goods, supplying her in return with raw materials and food. England, the great manufacturing centre of an agricultural world, with an ever-increasing number of corn and cotton-growing Irelands revolving around her, the industrial sun. What a glorious prospect! …
But then a change came. The crash of 1866 was, indeed, followed by a slight and short revival about 1873; but that did not last. We did not, indeed, pass through the full crisis at the time it was due, in 1877 or 1878; but we have had, ever since 1876, a chronic state of stagnation in all dominant branches of industry. Neither will the full crash come; nor will the period of longed-for prosperity to which we used to be entitled before and after it. A dull depression, a chronic glut of all markets for all trades, that is what we have been living in for nearly ten years. How is this?
The Free Trade theory was based upon one assumption: that England was to be the one great manufacturing centre of an agricultural world. And the actual fact is that this assumption has turned out to be a pure delusion. The conditions of modern industry, steam-power and machinery, can be established wherever there is fuel, especially coals. And other countries besides England — France, Belgium, Germany, America, even Russia — have coals. And the people over there did not see the advantage of being turned into Irish pauper farmers merely for the greater wealth and glory of English capitalists. They set resolutely about manufacturing, not only for themselves, but for the rest of the world; and the consequence is that the manufacturing monopoly enjoyed by England for nearly a century is irretrievably broken up."
The same could be said today of the US and China.
The same technical advances created rapid growth in non industrialized non capitalist societies once they were introduced like the USSR or China. It's silly to say that orders of magnitude reductions in human labour needed to produce food, provide clean water, build sanitation and sewer systems do not result in steady growth regardless of economic system. Producing the food easily is more fundamental than deciding who gets what amount of easily produced food allocated to them.
What created rapid growth in both the USSR and China is precisely their respective transitions from non capitalist societies to capitalist societies. Regardless of the technical advances of the (very different) times.
> It's silly to say that orders of magnitude reductions in human labour needed to produce food, provide clean water, build sanitation and sewer systems do not result in steady growth regardless of economic system.
No, what’s silly is to talk about "economic growth" regardless of the economic system. The growth in "economic growth" is a growth of exchange value produced in a given year. It makes sense only where production is meant for exchange, i.e. in capitalism.
And no, it is not silly to say that orders of magnitude reductions in human labour needed to produce food, provide clean water, build sanitation and sewer systems do not result in steady growth in capitalism. It is silly that orders of magnitude reductions in human labour needed to produce food, provide clean water, build sanitation and sewer systems do not result in steady growth in capitalism. Capitalism is silly.
> Producing the food easily is more fundamental than deciding who gets what amount of easily produced food allocated to them.
Now that’s a silly thing to say. Producing food easily is useless if the producers themselves can’t access it.
That might give the reader the wrong impression. It is the same labour, but spread out over more commodities. You won't get to work less.
We are living in a global economy now. There is no growth into unexplored territories left to do.
The amount of carbon we're spewing into the atmosphere is unsustainable, and will lead to more worldwide instability. The first effects have already been seen. Remember that the "Arab Spring" (rise to IS, wars and refugee crisis) had been triggered by rising food prices.
The other giant growth leap mankind had happened just before the Bronze Age Collapse.
Trade, automation, labor, same recipe. The outcome was a few centuries of dark ages though.
In any case, I'd like to make two points about the job market.
1. Yes, it is true that the job market recovered from the machine-ization of agriculture and industry. What's never mentioned, is that it took 80 years for the UK's job market to recover occupation and salaries seen at the beginning of the 1800s.
Europe's salaries and occupational levels were hit with a similar cataclysm as machines started appearing in the agricultural fields. That prompted millions and millions of Europeans to flee Europe for the Americas. Again, sure, the job market did recover, depending on the specific western European country between the 1960s and 1970s. That's between 50 to 70 years of slump. Almost twice the average person's career in a long lasting job market slump.
Please remind that to people that "AI will not impact job markets or will do so positively" using previous technological advancements as examples, that might be very well true but on a very undefined and likely very long time frame.
2. At no point in history a technical revolution threatened all kind of jobs at the same time, it always hit specific sectors like manufacturing or agriculture. Not all of them at once, manual and intellectual.