Comment by cornholio | Hacker News Reader

Comment by cornholio | Hacker News Reader

Innovation is always disruptive and the best positioned to take advantage of the disruption are the capital owners. If you have the money, you can simply buy stock in the latest tech IPOs or angel ten AI startups. The switching cost is low. Those who only harness their own human capital have massive switching costs, as the example shows, a famous Luddite learned for 7 years a trade that was made obsolete by machines. This has always been the case, yet innovation was historically beneficial creating new winners and social mobility.

What could be different this time compared to the Luddite era is that machine progress happens at an ever faster rate, until you reach fundamental - biologic and social - limits of the humanity's ability to adapt, especially as workers age. The majority of people will never be programmers or stock traders, and the market for those professions is shallow anyway.

This is all to say that it seems the fundamental social contract of capitalism - that the benefits of innovation are redistributed to everybody through competition and growth, employing more people in new industries and lowering real prices of machine manufactured goods to almost nothing - seems seriously threatened going forward in the AI and super-internet-company age. If the majority of the workforce can't adapt fast enough to become productive with the new methods, then they are redundant as far as capital is concerned; not only do they not make a living wage, they won't make any wage, since whatever they are able to do a machine can do it cheaper.

So you would end up with this near-feudal arrangement where returns to capital can be maintained in perpetuity as long as capital owners can maintain IP rights, strong walled gardens, control over limited mineral and natural resources, or keep innovation and disruption going using the services of a few loyal samurai-innovators, the tech salaried class.

I’ve seen this argument stated many times but it’s incomplete. If the majority of the population is made redundant and unable to earn any income then what happens to consumer spending? It drops to zero and it takes the likes of Amazon, Walmart, and countless other retailers as well as manufacturers with it.

Are they going to just let that happen?

Feudalism worked because the knights and lords needed people to work their land and provide a product: food. If machines can do that instead then there won’t be any farm workers, so it won’t really be feudalism. But then there won’t be any jobs in the city either, so no one will be able to afford food and all of that farmland will be worthless as well.

The loyal samurai-innovators aren’t enough to consume all that food and consumer goods. The whole economy will collapse in this scenario.

David Ricardo covered this: Prices will adapt.

Yes. Prices for corn and cheap clothing and consumer electronics will all fall to zero because no one has any money so demand will be zero. But then in response production will halt since there’s no longer any profit to be made.

This widespread contraction of production is economic collapse. So you haven’t answered my question.

Wealthy capitalists aren’t going to keep McDonald’s in business: they don’t eat there. If consumers don’t have any money, McDonald’s collapses.

Second-order effects are hard! Especially when your day-to-day is already consumed by first order effects: keeping your job, putting food on the table.

In times of great turbulence, it pays to hold on to fundamentals. Partly because they're a stable beacon that helps one muddle through; partly because there's little else to hold on to anyway.

On that note, a few observations:

1) We're biological animals. People love profit, but ultimately need other people to realize and enjoy that profit. To your point, in the limit, what good is being the wealthiest man on Earth, if you are the last man on Earth?

The rich and powerful are hardwired to flaunt their power and wealth and social status too, just like the apes we all are. Which puts a lower cap on how much they want to reduce the outside human population, whether consciously or as a 2nd order effect of their "whoopsie, I never!" actions. At some point on the concentration-of-wealth vs population-size curve, capitalism self-aligns with humanism, simply to preserve the biological substrate that powers it.

2) Taking off the human-centric goggles, "profit" is a function (one of many) to optimize. Humans love to optimize because Nature loves to optimize.

Nature's favourite goal appears to be bulldozing energy gradients, reducing free energy, increasing entropy. Everything else a downstream corollary: chemistry, biology, humans, civilizations, ecology.

So any plan to pause or subvert this optimization process is immediately suspect. Especially if that plan lacks a clear articulation of the process and ways to counter it. You and who's army? You think putting ink to paper to draft a regulation will do it? Because "Democracy" and "Will of the people" and "We humans are special"?

That's not a call for cynicism or despondency; just an observation of nature's directionality over the past few billion years. You'll be up against some formidable forces; Nature's rat-race to always do more with less is real, and us men and women merely players.

Having a way to model this space rigorously and explore the various equilibria and inflection points would be cool. Rather than humanity bouncing off the walls with new 1st-order-effect ideologies and religions all the time; a few million murdered here; a starvation there; an economic collapse yonder.

It's an interesting point of view, but the assumption that human society is bound to replicate internally the natural law of increasing entropy is quite the naturalistic fallacy. Until now, there hasn't been, to our knowledge, rational processes in our universe, capable of self reflection and decision making regarding their own behavior and organization, so past observations are not really relevant.

Sure, humanity is just another physical process that will ultimately dissolve in a high entropy lukewarm soup, but as long as we have access to low entropy, high energy density sources, we can buck the trend and choose to do quite unoptimal things, such as assigning individual rights to every individual, even those unfit for reproduction.

Zooming out past the current Stelliferous era of the universe and into the distant black hole and dark eras might risk losing quite a bit of nuance about humanity's nature and destiny.

Of course. Different levels of resolution reveal different details, and 2. was the ultimate zoom-out.

Still, I believe keeping the directionality in mind helps with perspective – even as turbulent whirls and eddies appear to float upstream, miraculously, temporarily.

I now realize I forgot another observation, closer to chongli's original slightly-beyond-human resolution of bust-and-boom economic feedback loops:

3) Most people are pliable and will do as they're told.

Even to their detriment, even all the way to their demise. And the process of human self-domestication is still accelerating.

Historical examples abound; from extremely ancient to uncomfortably recent.

Well, you could say the same today: why would the capital owners pay stagnating or decreasing real wages if they sell their products to those very same wage earners? Say, if I own a furniture store, isn't it in my interest for Walmart and McDonald's to pay good wages, so that more people can afford my products? But what real leverage do I have to get that outcome? It's not like there's a dark cabal of employers that sets wages.

Money is just a made up thing we invented to measure economic value. If a worker is truly valueless, then he gets no money and simply does not participate in the economy. For all the capitalist system is concerned, it's as if he's a starving subsistence farmer in sub-saharian Africa, he's outside the economy and there are no money to be made supplying him with goods and services. The economy does not "collapse" compared to a virtual level where all starving people of Africa are housed, fed, card and amazoned.

Of course you could interpret this as just an extreme form of inequality, where the redundant get some form of food and shelter covering UBI, while the capitalist and the samurai class earn riches beyond comprehension. The system is feudal in the sense that all relative wealth (thus, political power) is concentrated to a small number of people, not that somebody necessarily starves. The serfs could have quite a comfortable life, arguing on HN etc.

There is no money to be made supplying a subsistence farmer with goods and services? Are you aware of the donations business?

For all the capitalist system is concerned, it's as if he's a starving subsistence farmer in sub-saharian Africa, he's outside the economy and there are no money to be made supplying him with goods and services. The economy does not "collapse" compared to a virtual level where all starving people of Africa are housed, fed, card and amazoned.

I brought up an African country in another comment in this discussion: Eritrea. This is a country where a tiny elite owns pretty much all of the wealth in the country and the bulk of the population live in vast slums of unimaginable deprivation. There is no path for those people to achieve even the most basic working-class lifestyle because they have nothing to offer the wealthy aristocrats of their country.

If we are reduced to that situation, I consider it a collapse, and I think that people take for granted the belief such a collapse is impossible. It is absolutely possible. A wealthy elite tended by an army of robotic servants living in obscene luxury, maintained by a handful of samurai technologists, while untold billions live in squalor. Elections reserved only for the landed elite. The vast population left freezing in the darkness.

Well, you could say the same today: why would the capital owners pay stagnating or decreasing real wages if they sell their products to those very same wage earners?

You can't say the same today. The capital owners right now earn a profit by doing so and their wealth grows. If an AI revolution makes all of their workers redundant then they won't hesitate to lay them all off. McDonald's has already begun the experiment [1].

[1] https://www.newsweek.com/first-ever-mcdonalds-served-robots-...

In a democracy, if the majority of the population is unable to earn a living they can just vote themselves a living.

Such a system also happens to be in the interest of the haves because they need consumers to purchase their products that they generate with machines.

If you can mass produce the production machines to the extent that everybody can have them, you can create a post-scarcity society[0] which is the only condition under which communism is a workable system.

Another possibility would be that the market simply produces other jobs that currently don't exist for all of the people put out of work. So far, that's what has happened after ever "job destroying" technological innovation.

[0]: Post-scarcity means the price of everything falls to 0 or very close to 0 because it is trivial to create.

There’s never going to be post-scarcity. Resources are finite, land is finite, energy is finite. These things may become ever-more concentrated into the hands of a few, but they’ll never be infinite. New sources can always be captured and monopolized.

The alternative to people voting themselves an income is wealthy people taking away the vote. If they can defend their holdings with robotic drone armies and AI-powered mass surveillance then democracy will collapse along with the economy.

We need look no further than Eritrea for a real-world case study of what I’m talking about. A country with vast slums of people in absolute destitution kept separate from the wealthy aristocrats by walls and armed guards. Replace those guards with robots and there’s no reason that couldn’t happen here.

Scarcity doesn't mean "limited," it means "not enough."

Enough but still limited is not longer scarce.

This is why everyone needs a strong state that can input demand at the bottom.

> If the majority of the population is made redundant and unable to earn any income then what happens to consumer spending? It drops to zero and it takes the likes of Amazon, Walmart, and countless other retailers as well as manufacturers with it. Are they going to just let that happen?

This is a reasoning that starts with the idea there is some sort of global conspiracy of the global elite making agreements on what to do. I strongly believe there isn't, at least not on the level you are describing. There is however the underlying capitalist system that demands profit optimization.

If there would be some sort of new product or company that would make all other aspects of the economy obsolete but it would bring massive profits for the stakeholders it would absolutely be launched.

Companies don't make predictions on what might happen to the economy if they launch x, y or z.

> This is all to say that it seems the fundamental social contract of capitalism - that the benefits of innovation are redistributed to everybody through competition and growth, employing more people in new industries and lowering real prices of machine manufactured goods to almost nothing - seems seriously threatened going forward in the AI and super-internet-company age.

This isn’t the social contract. There are two classes, workers and capital owners, and each tries to get as much for themselves a they can. But the capital owners have an advantage since they can more easily band together. This has been pointed out since Adam Smith (or that’s the oldest one I know).

But of course it is correct that normal people have benefited from capitalism as well. But you can’t disentangle that from the centuries of class struggle which fought against the tendency of capital taking all the gains for itself. But this fact gets whitewashed as a “social contract”, i.e. a cooperative arrangement, when really the only reason why the so-called middle class thrived in the 50’s USA was because of concessions between the two classes after the struggles of the 30’s and 40’s.

(A sort of We Were Friends All Along history.)

Which is just to say that there absolutely never was a cooperative balance between these two classes under capitalism. There have just been different degrees of imbalance and then class struggle in order to try to correct for that.

Comparative advantage, even if some techbro had all the super ai and money to use, they would still be better served by doubling down on the specific products/services that provide the best return.

> seems seriously threatened going forward in the AI and super-internet-company age

The real threat is ai companies stealing people’s products and reselling them.

It’s as if they stole the furniture luddites made, dismantled it, reassembled it and the sold it for a profit.

A real shame that ai has been taken over by Sociopaths. I suppose punishing one or two will send the message.

I presume you alluding to the fact that, without pre-existing human creation, tools like Midjourney or Chat-GPT and their output are not possible, so the original authors rightfully deserve compensation.

But artificial intelligence is much more than artistic or text authorship. It will replace most service workers, most agricultural workers, drivers, doctors, vast segments of society become redundant in the next century.

If you could press a button and duplicate the garment made by a Luddite at zero cost, would you consider that machine "stealing"? Should we smash that machine, or should we rather develop a new social contract aware of its existence and power?

> Midjourney or Chat-GPT and their output are not possible

Precisely.

> But artificial intelligence is much more than artistic or text authorship.

Correct. But that type of AI takes time to develop. Time we can use to adjust to the changes it brings. ChatGPT, Midjourney, and similar, have developed fast because they are essentially stolen goods resold.

> Should we smash that machine, or should we rather develop a new social contract aware of its existence and power?

As with any tech, we will develop new social contracts and work patterns. Sociopaths want to build tools that completely obliterate industries through theft of people's intellectual property. Those are what's detrimental to society. Everything else is beneficial, and we will change our patterns of behaviour. Computers were meant to eliminate accountants, architects, graphic designers, etc. but we have ever more accountants, architects and graphic designers. Also if everyone is able to use said ai, then everyone is at the same level, meaning we need to figure out ways to get ahead, and for that we need people.

This whole madness that society will end is solely based on the idea that we will steal what they built so far and resell it. We need to push these thieves back to the sewers where they belong.

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