Comment by safety1st | Hacker News Reader

Comment by safety1st | Hacker News Reader

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As any student who takes Econ 101, or reads history, (or has heard of a country called Argentina? or has opened a newspaper during the past year of post-Covid inflation?) will learn, this assumption is factually incorrect. If you give everyone ten million dollars, there will be a phenomenal and rapid increase in the price of goods, especially consumer staples (since everyone got that money, and everyone buys staples).

You can't really just throw money at the demand side of the equation and expect everything else to stay the same. Supply side will raise their prices because they can (when everyone's got $10M in the bank, why not charge $50, $500 or even $5,000 for a loaf of artisan bread? And eventually other producers of bread follow suit because the consumer has become less price sensitive).

If you want to improve everyone's standard of living, what has repeatedly worked throughout history is to lower the cost of production through technology, and ensure there's lots of competition on the supply side. With enough competition, producers are unable to behave like a cartel. Eventually someone cracks and sacrifices part of their margin to attract more customers, and then a price war ensues. A textbook example is salt, which for most of human history was quite expensive, but after mechanized mining techniques were developed it became so cheap that for the average household it's practically free.

Technology + competition. At this moment in history we're quite good at the technology part of the equation but we have allowed many monopolies and oligopolies to form, so we're struggling at the competition part.

Sure if you give everybody 10 million dollars in pieces of paper, what you described happening will happen.

Money is the measure of the productive capacity of an economy. If you increase the money without increasing the capacity then you get inflation. But let's be charitable and assume that "Gud" was talking about increasing the capacity commensurately. Because that's what's happening. AI, robots and almost zero marginal cost green energy are going to increase the productive capacity of economies dramatically over the next decade or two.

Execting green energy to produce zero marginal cost is probably a bit too optimistic at this point. We have been adding green energy for at least 20 years now and energy keeps getting more expensive. Not even addressing whether its sustainable, but expecting a point at which additional solar panels or wind installations are going are going to produce extra energy at close to zero cost is expecting too much.

You might have that argument with nuclear energy, because most of the cost is upfront. But approval process for that will have to be expedited by congress.

Price is set at the margin. Right now the marginal energy is fossil fuel powered and the quickly increasing share of low cost renewable energy doesn't impact price.

> AI, robots and almost zero marginal cost green energy are going to increase the productive capacity of economies dramatically over the next decade or two.

Oh boy, maybe much much later on, 15-30 years from now if we're lucky, and maybe just the opposite. But as for coming decade? Forget it. https://www3.weforum.org/docs/WEF_Global_Risks_Report_2023.p...

The problem is often technology becomes a barrier to entry especially when it requires scale to operate. AI is the extreme example of this kind of technology - needs large compute, and large amounts of data, and requires a actor with enough capital to create it. In effect a lot of modern technology has helped create monopolies.

The barriers to entry definitely exist, but is it the technology itself that creates them, or is it the intellectual property laws we've adopted? Capital is a barrier but it's far from an insurmountable one -- there's plenty of capital floating around in the world. As a thought experiment imagine what the tech industry might look like if the US introduced some form of compulsory licensing for software (for patents? for copyrighted source code?) like what exists for music.

Natural monopolies certainly exist in sectors of the economy like public utilities, but I don't think they are so strong in tech.

For me monopolies, even natural ones, are maintained due to power structures in society. If you see most natural monopolies that are privately owned there's usually a political system that allows that to occur and a well connected powerful actor. AI has the ability to break the one power structure keeping the middle class intact - that being they still technically need people to "think on the ground" to provide the things they want. i.e. output is still a function of labor. AI breaks the need for "labor" to be a required input into the production line long term - i.e. it will no longer be a large economic factor of production.

My personal view: AI makes most of the world's population in the long run surplus to requirements for people who own capital, societal power and the planet's scarce resources. That's a form of monopoly.

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