In the AI Economy, There Will Be Zero Percent Unemployment
reason.com
reason.com
But let's start with this "If H&R Block could replace 90 percent of its seasonal employees with AI, it would see its profits skyrocket, given that labor is its biggest expense. Those profits would be reallocated elsewhere, that would increase the potential for even more economic growth, and that would in turn create better opportunities for the accountants."
=> Lol, no. It doesn't work that way. H&R block, if any, will allocate more to share buy backs, and the size of the tax filing "pie" won't increase due to AI.
See Rule 5 in https://hbr.org/2007/07/six-rules-for-effective-forecasting
That is, after all, why people seek profit. They like the security in knowing that others will do work for them in the future. When you feel hungry, you want to know that someone will work to give you food. When you feel cold, you want to know that someone will work to provide you shelter. When you feel bored, you want to know that someone will work to entertain you. So on and so forth.
Unless people can offer work that you want to have done in the future, you cannot profit. Rent seeking doesn't change anything. You still need valid promises of future work in order to profit.
Well, duh. If it weren't lacking, what reason would there be for me to talk about it? There would be nothing left to learn. That would be a useless waste of time.
> Your original statement that the only way to extract wealth from someone is by putting them to work is factually wrong for the reasons I stated.
Go on. You stated that rent seeking accumulates profit, but as profit is merely the promise of future work, no wealth is actually extracted. Only a potential promise of future wealth is gained. Not until the profit is spent – as in people are put to work – can wealth be extracted out of those promises.
In case you don’t know this there are people knowledgeable about a topic who also talk about that topic.
Just as you have demonstrated yourself. You are no doubt knowledgeable in the subject, but have completely refused to talk about it, spending all your time focused on my character. Which is to be expected, as what more are you going to learn about the topic at hand? The only thing you might stand to learn something about is me.
This is not necessarily true. Sometimes people do things without financial gain.
I guess you're thinking of people who have no assets. In that case, you're right, when people have no other wealth their labor is all that's left to extract. (And all they have left to trade for their daily expenses.)
What happens to people with no other wealth in an AI economy where labor has little value? That's a scary thought.
Even of those who do. Wealth cannot be extracted from existing wealth.
> What happens to people with no other wealth in an AI economy where labor has little value? That's a scary thought.
Will people with AI be happy to metaphorically scurry off into the forest and life alone with nothing other than their AI? So long as there is value in human-to-human social interaction, there will be value in labour. The labour may not resemble anything we can imagine today, but it will be there in some form.
And even if we assume that those with AI do go off and live life alone in the forest, those who don't have AI will still need other people in their lives, so labour will continue to hold value within that subset of the population.
Alternatively, those with AI may freely share it with all, creating a post-scarcity society. That's probably not so scary. Hell, entire societies have upended everything in hopes of being able to transition into a post-scarcity world. It is generally considered a welcome future, not something to fear.
Yes. Rich people tend to re-invest their money and not throw it into a Scrooge McDuck vault to swim in. The re-investing is what helps create economic growth.
Sources like Reason getting submitted & discussed as though their normal submissions is usually an incredibly silly time. I don't think the site should do it, but on Bluesky there's moderation layers, and it seriously makes me want something like that for the web at large, where we can turn on some kind of content warning as we browse. Content warning: specious/suspect sight. Content warning: strong agenda.
It's a bad time that the noosphere keeps happening with so little memory. That there's not cues and contexts to be like, hey, this is Reason or Quilette: don't expect normal content here.
Okay, but then whomever owned the share previously and accepted the profit in exchange for giving the share back now holds the profit instead. What are they going to do with it?
Which, again, merely trades the profit to whomever previously owned the homes. What are they going to do with the profit?
Or just build their 6th mansion that uses a plot of land that could fit 400 apartments, keeping the people underneath them commuting 1 hour from their 80 square meter apartment.
But then the profit is given to whomever previously owned the property. What are they going to do with it?
> Or just build their 6th mansion
That puts people to work, violating the premise here.
That's why we are here, but, frankly, I'll take ill-informed speculation over whatever the hell this is. What on earth is the point of using a discussion forum if you are going to outsource the useful words to other people? If they wanted to contribute to the discussion, they would do so themselves.
In fairness, perhaps you accidentally hit submit before you were finished?
My claim is that H&R Block would replace all their workers for more efficient AI if it was more profitable. Then they would re-invest that money in the most productive way they can – other companies, etc. This is the same strategy as Apple, Microsoft and other companies do with large amounts of cash.
I don't claim H&R Block would be directly creating new jobs. They would try to maximize profit by investing their profits and diversifying.
The future isn’t a fixed point. But before then H&R Block (or a company like them) will probably shift to AI. Then eventually your AI will mean you don’t even need them.
The disruptors will get disrupted.
A few paragraphs in, the statements felt generic and lacked supporting details to the point I got that uncanny valley sense of LLM writing. It doesn’t seem like this piece adds much that hasn’t already been said.
I think it’s a little unbelievable that the right proportion of people want to, say, serve food at a restaurant. But that’s the idea.
a) No disentanglement of growth factors. Economic growth tied to expansion of consumer base is slowing for demographic reasons and more crucially, key markets in the knowledge economy are demand saturated - attention economy for example is not growing - it peaked in the pandemic and outside of policy intervention, there’s very limited growth potential.
b) Failure to spell out the transformer as machine that prints machines. The transformer extracts the rules of creation from the corpus of human created labor results and automatically produces the replication function. The technology may be in its infancy, but it will only improve.
c) Historically adjustment for new job creation has operated on a multi decade timescale, complimentary to the often massive infrastructure needs (wires, power plants, distribution infrastructure) but this technology does not have those requirements. The app stores, fiber lines, machines, API platforms all exist. Adopting products can happen in months. The loop from science to product is months (see vision transformer)
d) Do I spot trickle down economics? Are we gonna invoke this boomer level of delusional narrative for the next 20 years again despite the iron clad metrics showing it’s wishful thinking to appeal to certain ideological positions rather than grounded in any kind of reality. The gains from operational efficiency will become stock buybacks, yachts, macadamia chewing cows and vanity dildos flying to space.
Appealing to history is all fine and dandy, but one has to spell out the divergent core conditions to have a serious conversation - this article feels like faith, not well reasoned forecasting or even science fiction
A. Some parts of the economy will grow. Some will shrink. My claim is that if you believe that AI will create new efficiencies and continue to do so, then overall economic growth will increase at a faster rate than ever.
B. Predicting what architecture could lead to this growth is beyond the scope of this article. The point was to say that if we keep getting increased efficiencies we'll get increased growth.
C. Job creation accelerates. Before I was hired at OpenAI in 2020, nobody on the planet had ever been hired as a prompt engineer. Now it's a career (at least for the time being.)
D. I'm assuming maximizing profit in the most near-sighted way possible. Same as it has ever been.
Is there a specific claim or argument that you disagree with?
Okun's law shows a strong correlation between GDP and employment. Which runs counter to your previous claim – as I understand it (please forgive me if I'm not understanding it correctly.)
Did you make a comment somewhere else that I missed?
Would have been nice to explain how people would be employed in an AI scenario and how they would benefit from the surpluses created by it.
Change is equally hard to comprehend. Two centuries ago, 80 percent of the U.S. population worked on farms. If you told one of those farmers that in 2024 barely 1 percent of the population would work on farms, he'd have a difficult time imagining what the other 79 percent of the population would do with their time. If you then tried to explain what an average income could purchase in the way of a Netflix subscription, airplane transportation, and a car, he'd think you were insane. The same principle applies to imagining life 50 years from now."
i would love to live forever, because these changes have been beneficial, and those who lived two centuries go would've loved to trade places.
The bee population in America is supposedly growing very quickly thanks in part to tax breaks in Texas.
Global poverty is way down. Large part of that is China.
Gay rights have come a long way. Not perfect, but it’s nice that generally people can be more open about who they are.
I absolutely love all the open source projects out there for almost anything I want.
Yeah, we could be doing better. Much better. But it’s actually unlikely we will hit the worst case scenarios for climate change. The developing world is going to get rocked by the 2+C temperature increase, but it won’t be an extinction event, there is still more we can do, and there is much less denialism than the 90s or 00s.
Am I touching too much grass?
Russia and China are again extremely adversarial and autocratic, the US is tearing itself apart in political polarisation. In my own country the extreme right fascists won 24% of votes. Gay rights are ok but Trans people are being demonised by the right now. As a whole it feels like the LGBTQ+ community is under attack. Big corporations are getting ever more powerful.
The internet is decidedly less free and very enshittified and we get tracked and surveilled wherever we go, online or not.
And no it won't be an extinction event but it will be heavy for the marginal people everywhere, leading to even more differences between rich and poor and even more pressure to equalise this by war.
And in the 90s we had much better social welfare safety nets here. Three decades of neoliberal government hollowed out anything good here in Holland. The rage of the disadvantaged by this are what's fueling this swing to fascism, they take advantage of this anger and redirect it to worse.
I am excited about some stuff in the future, but I'm more pessimistic about how ever increasingly complicated and expensive life will become. There are a few things that I enjoy where I can already see the writing on the wall for them to disappear or be banned.
But some other people that have much less demanding jobs did think that in the future people would barely work. This has become much more true for Europe than USA although as you'll see pointed out all the time, USA salaries are higher then Europe.
I suspect Keynes was a socialist since he seems to have this idea that everybody would chip in only 15 hours a week in order to produce enough stuff for the whole of society.
> "But beyond this, we shall endeavour to spread the bread thin on the butter-to make what work there is still to be done to be as widely shared as possible. Three-hour shifts or a fifteen-hour week may put off the problem for a great while. For three hours a day is quite enough to satisfy the old Adam in most of us!" [1]
And approximately a decade later, the United States did just that. The workweek was reduced to 40 hours to make what work there was to be done as widely as possible. He didn't get the number of hours quite right, but nailed the overall premise.
WRONG:
In the AI Economy, There Will Be Zero Percent Unemployment
RIGHT:
In the AI Economy, There Will Be Zero Percent Unemployment (reason.com)
TL:DR;
(reason.com)