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Comment by whatisthiseven | Hacker News Reader

> But will it?

My prediction is no, because productivity gains must benefit the lower classes to see a multiplier in the economy.

For example, ATMs being automated did cause a negative drop in teller jobs, but fast money any time does increase the velocity of money in the economy. It decreases savings rate and encourages spending among the class of people whose money imparts the highest multiplier.

AI does not. All the spending on AI goes to a very small minority, who have a high savings rate. Junior employees that would have productively joined the labor force at good wages, must now compete to join the labor force at lower wages, depressing their purchasing power and reducing the flow of money.

Look at all the most used things for AI: cutting out menial decisions such as customer service. There are no "productivity" gains for the economy here. Each person in the US hired to do that job would spend their entire paycheck. Now instead, that money goes to a mega-corp and the savings is passed on to execs. The price of the service provided is not dropping (yet). Thus, no technology savings is occurring, either.

In my mind, the outcomes are:

* Lower quality services

* Higher savings rate

* K-shaped economy catering to the high earners

* Sticky prices

* Concentration of compute in AI companies

* Increased price of compute prevents new entrants from utilizing AI without paying rent-seekers, the AI companies

* Cycle continues all previous steps

We may reach a point where the only ones able to afford compute are AI companies and those that can pay AI companies. Where is the innovation then? It is a unique failure outcome I have yet to see anyone talk about, even though the supply and demand issues are present right now.

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> My prediction is no, because productivity gains must benefit the lower classes to see a multiplier in the economy.

Baumol's cost disease hurts the lower classes by restricting their access to services like health care and education, and LLMs/agents make it possible to increase productivity in these areas in ways which were once unimaginable. The problem with services is that they're typically resistant to productivity growth, and that's finally changing.

If you can get high quality medical advice for effectively nothing, if you can get high quality individualized tutoring for free, that's a pretty big game changer for a lot of people. Prices on these services have been rising to the stratosphere over the past few decades because it's so difficult to increase the productivity of individual medical practitioners and educators. We're entering an era that could finally break this logjam.

"Baumol's cost disease hurts the lower classes by restricting their access to services like health care and education, and LLMs/agents make it possible to increase productivity in these areas in ways which were once unimaginable."

You've expressed very clearly what LLMs would have to do in order to be economically transformative.

"If you can get high quality medical advice for effectively nothing, if you can get high quality individualized tutoring for free, that's a pretty big game changer for a lot of people. Prices on these services have been rising to the stratosphere over the past few decades because it's so difficult to increase the productivity of individual medical practitioners and educators. We're entering an era that could finally break this logjam."

It's not that process innovations are lacking, it's that product innovations are perceived as an indignity by most people. Why should one child get an LLM teacher or doctor while others get individualized attention by a skilled human being?

> Why should one child get an LLM teacher or doctor while others get individualized attention by a skilled human being?

Is the value in the outcome of receiving medical advice and care, and becoming educated, or is the value just in the co-opting of another human being's attention?

If the value is in the outcome, the means to achieving that aren't of much consequence.

More subtly, what is an education? What is care? As you point out, the LLMs are (or probably will become) perfectly good at the measurable parts of those services; but I think the residual edge of “good” education/care is more than just the other human’s co-opted attention.

How many of us have a reminiscence that starts “looking back, the most life-changing part of my primary or secondary education was ________,” where the blank is a person, not a curriculum module? How many doctors operate, at least in part, on hunches—on totalities of perception-filtered-through-experience that they can’t fully put into words?

I’m reminded of the recent account of homebound elderly Japanese people relying on the Yakult delivery lady partly for tiny yoghurt drinks, but mainly for a glimmer of human contact [0]. Although I guess that cuts to your point: the value in that example really is just co-opting another human’s attention.

In most of these caring professions, some of the value is in the measurable outcome (bacterial infection? Antibiotic!), but different means really do create different collections of value that don’t fully overlap (fine, I’ll actually lay off the wine because the doctor put the fear of the lord in me).

I guess the optimistic case is, with the rote mechanical aspects automated away, maybe humans have more time to give each other the residual human element…

[0] https://news.ycombinator.com/item?id=47287344

> How many of us have a reminiscence that starts “looking back, the most life-changing part of my primary or secondary education was ________,”

For me it was a website with turotirals on how to make flash games. It literally launched my career and improved the quality of life for my whole family by an order of magnitude.

I am primarily the naysayer of AI but I admit that current LLMs could have easily replicated the whole website.

I love, love that. And if even one of my weird little side projects—including the ones I build with AI-powered tools—connects with a young person like that, I’ll be satisfied.

To me it’s not the “how” so much as the “what,” though.

I can only speak to my own experience with that sort of thing, but how much of what moved you was the invisible authorial hand behind the tutorials—deciding what’s fun to them to write about, and how to talk about it in a way that clicked with a young you?

I guess, what’s the difference between that website, the official docs for the language in question, the formal spec for the language, the .h files themselves that mechanically define the engine that compiles the language, a big pile of examples of working code in the language…

For that matter what’s the difference between what’s fun to do in the language and what’s boring?

I would grant that LLM tech would probably shine at the grunt work part of “please translate these docs into a grade-school-pitched, engaging, example-driven tutorial website; make it dinosaur themed.” But equally it could pitch it for a billion other audiences, and most will not bear fruit without guidance and refinement. And LLM frontends are already same-y, what will distinguish it to your young eyes? Knowing (or finding out) what’s worth doing is the tricky part—and that’s hard to separate from the humans on the receiving end.

I think about when tiktok made it “easy” to recut songs and memes, and to do basic compositing effects. The “how” required specialized software and serious skill for a long time, then suddenly it didn’t. But when it comes to the “what,” there are still people who are good at using the tools and ones who are bad—ones who make good content and ones who make bad ones… and the difference seems to cleave along the normal human lines: innate talent + practice + persistence.

As the old saw goes, contemporary art: “But I could do that!” “Yeah, but you didn’t.”

Alternatively, as the fox said, “C’est le temps que tu as perdu pour ta rose qui fait ta rose si importante”…

After reading your comment I take back my last sentence. I dont think the LLM would have been able to create that website becaue what LLM would have created would have been an uninspiring husk of tutorials. The website had a certain personality to it with the choice of games he would make and the "interesting" problems he would demonstrate and give solutions to.

The supply/demand picture here is more complicated than it looks.

If AI displaces human educators, yes, their supply shrinks -- but we can't assume what direction its demand will go.

We've seen this pattern before: as recorded music became free, live performance got more expensive, and therefore much less accessible than it used to be.

What's likely to happen is that "worse" (read: AI) education will become much cheaper, while "better" (read: in-person) education that involves human connection-driven benefits will become much less accessible compared to what it is today.

Most people may be consider it a win. It's certainly not a world I'm looking forward to.

Important follow-up to my comment: as fewer people do X -- live music, medicine, education, you name it -- fewer talented people do it as well.

Fields need a large base of participants to produce great ones. This is exactly why software has been so extraordinary over the past 30 years: an unusual concentration of gifted minds across the entire humankind committed themselves to it.

In my view, Bach, Rachmaninoff, Cole Porter equivalents today probably aren't writing symphonies. They've decided to write code for a living. Which is why any Great American Songbook made today won't hold a candle next to one from 1950s.

Disagree, we do have the Bach's and Rachmanioff's today: John Williams, Jerry Goldsmith, Bear McCreary, Yuki Kajiura, Hans Zimmer, and probably a slew I'm not even aware of today.

We're in the greatest era of symphonies IMO, it's just that they're hiding in surprising places; movies, TV shows, games, etc.

I don't think we can know whether or not this is the case in our own lifetimes, because we are so immersed in popular culture that we can't be objective about it. Enough of our historical great composers weren't venerated until after their deaths, and to describe composers as "hiding" within the most popular media of our era is a great disservice to the many composers that don't have the fame, connections and reputation to be hired to write for these.

I would also point out that composing for a medium like a game or a movie places a great deal of constraints upon the composer, in terms of theme, cost of instrumentation, duration and most importantly: what is safe and palatable for an executive to approve of.

Do you think that composers of the past did not also face real-world constraints?

The sound track to "Lord of the Rings" is one of my favorites.

And AI is stuck in the past. As we prepare to launch a new product… people using AI won’t know about it for months or years, potentially. This will make startups have to seed the planet with text so an AI learns about it, not to mention normal SEO and other shit. I’m sure it is only a matter of time before you can pay to inject your product into the models so it knows about it faster, but incumbent companies will pay more to make sure they don’t.

The future is going to suck.

> I’m sure it is only a matter of time before you can pay to inject your product into the models so it knows about it faster, but incumbent companies will pay more to make sure they don’t.

You have just discovered the fully enshittified version of the business model ai companies hope to reach.

> Is the value in the outcome of receiving medical advice and care, and becoming educated,

Absorbing information doesn't make you "educated". Learning how to employ knowledge with accountability and trust with beings in the real world is what's important, and a machine can't teach you how to do that.

> or is the value just in the co-opting of another human being's attention?

Why is it "co-opting" if it involves a mutually consenting exchange?

Neither does traditional human interacting education - those are things you learn in your first jobs in the real world, regardless of how you were educated.

Those are things you start learning in preschool, from other humans. Granted, some never learn.

Wisdom comes from application of knowledge and experience in the real world, as does skill.

The value comes from applying an expert's wisdom and skill to the problem at hand.

You get neither from LLMs.

This sounds eerily familiar to the naysayers who claimed that no one would ever buy a pair of shoes or a car online in the late 90s/early 2000s.

Even if you have perfect medical information and advice through an LLM, can you perform surgery on yourself? Can you prescribe yourself whatever medication you think you need?

For education, if you know as much as the average Harvard grad, can you give yourself a Harvard degree that will be as readily accepted in a job application or raising funds for a new business?

A robotic surgeon can use the data from the LLM to perform the appropriate surgery for you. Ditto for the automated pharmacy kiosk.

That Harvard degree will be irrelevant since no one will be hiring humans.

Maybe soon but not yet.

Interesting perspective; medical regulation as a business moat

That's why medical licensing was introduced.

It's interesting that you assume there's value in being educated in this hypothetical world of complete passive consumption.

The world you're describing is one where the entire economic value of humanity is in reminding the AI to put out the food bowl and refill the water dish at the appropriate time.

For many, the Culture is an utopia to aspire to, for some is something to run away as fast as possible. Banks himself described the dichotomy.

The interesting thing here is less about what people aspire to, and more about the lack of imagination and thought when considering the world they want to create.

It would be funny if the sleepwalkers weren't trying so hard to drag humanity along.

The premise of your argument is that "the outcome" can be separated from the process. This is true enough for manufacturing bricks: I don't much care what processes was used to create a brick if it has certain a compressive strength, mass, etc.

But Baumol's argument, which you introduced to the conversation, is that outcome and process cannot actually be distinguished, even if a distinction in thought is possible among economic theorists.

> But Baumol's argument, which you introduced to the conversation, is that outcome and process cannot actually be distinguished

How is that Baumol's argument? How is 'outcome' vs 'process' relevant to his argument at all?

'Cost disease' is just the foundational truth that the cost of the output from industries with stagnant productivity will increase due to the fact that the workers in that industry can be more valuable in other industries, reducing the number of relative workers in the stagnant industry.

If you want to make the output from a stagnant industry available to a broader spectrum of the population then you have to improve the productivity of that industry.

I think he means that when you go to watch the symphony orchestra, you are going to watch a bunch of people sitting with their instruments, manually playing them.

There is no way to separate this process from the product of the process.

You're not buying the sound of the music. You can just stream that. As far as that is the product, it has already been automated and scaled so millions of people can hear it at once, whenever they feel like it.

You're buying the sound AND the people sitting in their formal clothes manually moving their strings over a violin, with painstaking accuracy developed through years of manual practice.

You couldn't make a robot do it, for example. You could maybe make a robot play a violin, but that again isn't what the product is.

The product is tied to an expectation of what it is that does not allow for it to be done more effectively.

By contrast manufacturing processes are not tied to this expectation. If I buy a loaf of bread, I don't care whether the wheat was manually harvested or harvested by a huge machine.

The musical performance example is just one example. The general problem of services being resistant to increased productivity, however, is not restricted to this somewhat unique case. That's why I pointed to medical advice and education: when I need a medical consult or personalized tutoring, I don't specifically care if I have to lock down irreplaceable moments of another human being's life in order receive them.

It's misguided to focus on one special case of the cost disease problem where human by definition must provide the services, when most of the time this is not the case.

But it's not clear to me that medical and education are good examples of cost disease?

For instance, technology means cancer is more easily treated that it was in the past.

Education, I'm less sure about. A lot of the tech there is very new, it takes time for evidence to build up.

It's very true for healthcare (especially mental healthcare) and education today as well, because for most people, the choice isn't LLM vs. human attention - it's LLM vs. no access at all.

It's not like that's an inherently unsolvable problem without using LLMs

It's not inherently insolvable, it's just nearly impossible to solve because the alternative solutions tend to have "overhaul the global economy and human nature" as their prerequisite.

Pretty much all of humanity's tough problems, the ones we can't seem to make much progress on despite centuries or more of trying, are at their core coordination problems. We only really make progress on those when we can sidestep explicit coordination in some way. Every other kind of problem is usually amenable to technology, and we've solved most of them already, largely in the last 200 years.

Teacher shortages and increasing tuition costs say it practically is.

> the value just in the co-opting of another human being's attention?

Thats a weird way of describing it.

A machine telling me to exercise and eat right will be ignored, even if the advice is correct. A person I trust taking me aside, looking me in the eye and asking me the same would be taken far more seriously.

That may well be true if you need to be persuaded to exercise and eat right.

OTOH, if you don't need to be persuaded and just want information on how best to go about doing it, then I think it makes little difference where the information comes from as long as it's of reasonable quality.

Maybe for you, but that model clearly doesn’t generalize, or dieticians and physical trainers would only have success stories to point to.

The specific example was indeed a poor one since we have extensive data on that, and even high-touch non-surgical interventions involving hours per week from multiple specialists (read: incredibly expensive) with very-willing participants have proven a lot less effective than one might hope (somewhat effective! But only moderately so, which ain't enough given the price tag). Docs saying "eat better and exercise" at an annual check-up has basically no effect whatsoever.

Turning dozens to hundreds of decisions per week for which the correct decision must be made in nearly every case, into a single decision per week for which the correct choice must be made, has proven wildly more effective than any of that (I mean glp-1 agonists).

My Watch tells me I need to stand up and walk around and that I should do some more exercise or walk further than normal today.

The value is in the signature and the power of the legal department your insurance provider employs.

Honestly, I think it’s the second.

It also seems like the value of quality tutoring that doesn't primarily function as social/class signaling goes down as tools capable of automating high quality intellectual work are more widely available.

It depends on outcome again: is the value of tutoring the social class elevation, or is it in the outcome of becoming more skilled and knowledgable?

There's also the deeper philosophical question of what is the meaning of life, and if there's inherent value in learning outside of what remunerative advantages you reap from it.

I feel like lobster’s history might be relevant here - will at some point having a flawed forgetful human being give medical advice be for poor people?

If I described my symptoms to an AI and it suggested a diagnosis, I would defintely get a second opinion.

That's reasonable, but don't feel like you're safe letting the humans rest on their laurels. Human medical errors kill thousands upon thousands every year.

>If you can get high quality medical advice for effectively nothing

This is an area where a confident, but wrong information is extremely costly. It’s like saying an LLM can give you high quality directions on how to tap into a high voltage transformer. Sure, but when it’s wrong, it’s very very wrong with disastrous consequences. That’s why professions like doctors and Engineers are more regulated than others.

It is definitely too early to expect AI medical advice to be usable (except in very limited instances) but the question is how long and how far will that change? After all, human doctors don’t do so well with new or under documented or rare conditions (consider the history of alpha-gal allergy or lyme disease sufferers even now).

By the time it replaces doctors, nobody but today's investors will be able to afford anything at all. The X-shaped economy would have owners in the V and manual laborers (assuming this doesn't translate to gains in automation) in the ^. This outcome is worth avoiding...

Can a robot write a medicine prescription? A medical procedure prescription? If yes, that would be a game-changer. But the medical insurance providers would be very cautious about honoring these. Then, if things go wrong, what entity would be held accountable for malpractice?

You already can get a good-quality medical advice "for nothing", unless it requires e.g. a blood test. The question is, how actionable such an advice is going to be, and how even the quality is going to be.

There's a simple solution. If a medical malpractice happens, law suit against the LLM company. If their license is revoked as part of that finding, unfortunately that applies to the "doctor" (e.g. ChatGPT).

Same for self-driving. Just hold each car like a normal driver, the owning AI company has liability. So after ~20 tickets and accidents in a week, a few ambulances being blocked, the only option is to revoke the driver's license (of which, all the cars share one, as they have the same brain).

This would make AI companies more cautious and only advertise capabilities they actually have and can verify. They would be held to the standard of a human. I think that's reasonable (why replace humans if the outcome is worse, and why reduce protections for individuals).

To make the analogy more clear: even if a telemedicine doc sees 10,000 patients a day all over the world, they would be held liable for any medical malpractice. Bad enough, and their license would be revoked, regardless of the fact that they see many patients all over the world. Same deal with AI / LLM -- if ChatGPT is making medical advice and it hurts someone, that's the same as a human doing so -- its malpractice and lawsuits can happen.

If they are somehow licensed, well then that license can be revoked. We would revoke a human's license for a single offense in some cases, the same should occur with AI.

I'm not certain that a already observable negative impact of AI on some areas of education could be offset by "high quality individualized tutoring for free".

Well, there's always wars as the way to get rid of people. I really don't rule out that the people that benefit from this sort of thing will purposefully steer the world in that direction because the poor won't have any choice other than to enlist as a way out of their situation, and never mind the consequences. You can already see some of this happening.

You could get high quality medical advice 20 years ago on the internet, or 40 years ago in the library. Doctors aren't there to give you advice, they are mostly gate keepers. Every person who's chronically ill knows that doctors are totally useless for anything beyond the 10 most common diseases and primarily exist to approve or reject your pleas for lab work. They won't go away, neither will psychotherapists and all the middle managers that can be easily automated, because their real purpose is not the practical work that they do.

I’m sick of this idea that “free” services are beneficial to society. There is no such thing as a free lunch; users are essentially bartering their time, attention, IP (contributed content) and personal/behavioral data in exchange for access to the service.

By selling those services at a cost of “free”, hyperscalers eliminate competition by forcing market entrants to compete against a unit price of 0. They have to have a secondary business to subsidize the losses from servicing the “free” users, which of course is usually targeted advertising to capitalize on the resources paid by users for access. Or simply selling to data brokers.

With the importance of training data and network effects, “free” services even further concentrate market power. Everyone talks about how AI is going to take away jobs, but no one wants to confront how badly the anticompetitive practices in big tech are hurting the economy. Less competition means less opportunity for everyone else, regardless of consumer benefit.

The only way it works if the “free” service for tutoring or healthcare is through government subsidies or an actual non-profit. Otherwise it’s just going to concentrate market power with the megacorps.

This 1000x. "Free" is only a viable business model if the govt funds it. Otherwise, the $$ has to come from somewhere else in the company - how long will it take for the company to lose interest in a loss-leader when they're making $$ from other parts?

Look at all the deprecated Google products. What happens when Gemini-SaaS makes billions from licensing to other companies, and Gemini-Charity-for-the-poors starts losing money?

Sadly, the bigger the $$ in the tech pie, the more we have attracted robber barons, etc.

So what do you think of Linux or OSS / GPL software?

Ok sow how about "much cheaper"?

> I’m sick of this idea that “free” services are beneficial to society. There is no such thing as a free lunch; users are essentially bartering their time, attention, IP (contributed content) and personal/behavioral data in exchange for access to the service.

In aggregate, this is true, but there are many ways to game the system to one's advantage and get a true "free lunch." For example, people watching Youtube with an adblocker and logged out don't provide Google with any income or useful telemetry. Likewise you can get practically unlimited GPT/Claude/etc by using multiple accounts.

No, you are misunderstanding th economic principle. There is still a cost associated with serving that user, and the user is still paying for the cost of their internet connection and the opportunity cost of spending time on the service, or of setting up new accounts to get past usage limits. “No useful telemetry” I don’t really agree with in the YouTube example, as view counts are still vital for their recommendation algorithm.

TINSTAFL has two main implications. First that nothing is free, someone has to pay for it. Second is that money is not the only thing you pay with; every choice has an opportunity cost. Gaming the system costs someone something.

I didn’t know Claude Code could put a thermometer in my butt.

No human doctor needs to do that either - today, they just IR scan your temple or forehead. In a dedicated medical environment, there’s no reason that couldn’t automatic be fed into the AI.

I didn’t know Claude Code could put an IR scanner to my forehead.

You're implying that insurance companies will allow prices to fall and lower their profits. That seems like a really unlikely event in the current economy. They fire a lot of doctors and nurses, but they won't lower prices.

This is assuming no competition materializes from the lowered friction

The ACA requires 80-85% of health insurance to go toward medical care (medical loss ratio). The way they work around that is to figure out how to charge more for medical care.

Exactly my point.

> high quality medical advice

I'll replace my doctor with AI immediately after the tech bros do

lol

> cutting out menial decisions such as customer service

This is cited so often. We tried it at a large scale with some of the best engineering talent but unfortunately the humans on the other side preferred speaking to and interacting with a human by a wide margin.

We are still trying with the latest AI models but humans are still doing better at serving other humans.

In one of our studies, we observed by a large margin that our customers would hang up immediately on knowing that they are interacting with an AI system.

I have heard this from others as well.

Isn't it obvious why?

We contact support services to fix material problems. 'This booking is wrong.' 'I want a refund for that.' AI systems aren't empowered to solve these problems. At best they can provide information. If the answer is information - the user can likely already find it online themselves (often from a better AI model than they're going to find running your support line). If they're calling, they most often want something done.

Yeah, it's like trying to use an ORM to find data in the database that's invalid due to a bug. You can't see things in the system that break the premises of the system by using the system, and the fact that some things are "supposed to be impossible" doesn't change the reality of what's actually occurring in the data store.

So customer support needs to know how the systems works and need to understand what the data means, but also has to know when the system is factually incorrect. Customer support has to know when the second party is speaking the truth.

This is exactly why customer service is ripe to be decimated by AI agents that can actually interact with systems

Do you know that to be true or are you speculating?

As we argue on the orange site, companies are paying Sierra AI to integrate voice and text agents into their systems to look up account information and process refunds. Fallbacks to human agents are built in to these systems.

We all hate phone trees because they never have the capability to handle exceptions to the most basic functions. We shout "speak to an agent!" into the phone because their website and phone trees only handle the happy path.

We tried them as well and they did worse than a foundational LLM model which is saying something.

As someone who has an automated drive-thru Bojangle’s nearby, I would say the AI is always immediately available, understands better, feels out the conforming order screen in real time, and generally results in my order being placed correctly.

> because productivity gains must benefit the lower classes to see a multiplier in the economy

by this logic, the invention of mechanized farm equipment, which displaced farm labor, didnt increase productivity

On the contrary, humanity spent nearly its entire existence calorically deficit, and until mechanized farming did we finally see health outcomes improve, height increase, IQ increase, and populations explode.

Productivity gains in the case of mechanized labor got everyone out of subsistence farming and into factories.

AI gets everyone out of every job and into nothing.

> AI gets everyone out of every job and into nothing.

Why is mechanized thinking going to do that? When mechanized labor didn't?

> Why is mechanized thinking going to do that? When mechanized labor didn't?

You're right. There is technically a category of work that relies on neither our ability to do physical labor nor excessive thinking. It just relies on being a human.

The conclusion is thus obvious: AI is going to push us all into careers as photo models, OF-creators, and social media influencers! /s

The benefits largely accrued to the poorest people.

It made food cheaper.

Your argument is (mildly) a variant of the broken window fallacy.

AI will bring about a de-sequestering of talent and resources from some sectors of the economy. It's very difficult to predict where these people and resources will go after that, and what effect that will have upon the world.

In my humble opinion, money is a distraction most of the time when trying to understand economic matters. Instead it's better to take opposite view: looking at the flow of goods and services.

AI will allow higher production of goods and services. If producing goods and services becomes cheap enough (and it's looking like it will become dirt cheap), then it will not take much redistribution for it to reach the masses.

I think the true crisis will be one of purpose. That we live meaningless lives of leisurely abundance.

> and it's looking like it will become dirt cheap

Why do you say this? How does AI helping us lower prices of goods?

The same way lesser automation has reduced the price of goods. By allowing an increase in the scope of automation, AI will decrease the costs of goods. Someday.

At some point we're gonna have to abolish the economy itself. We need to transition to a post-scarcity society where everything is abundant and there's no need to economize.

Is AI helping us get there? I don’t think AI has done anything to reduce the scarcity of food, shelter, physical goods—things that people actually use money for

That is the future for significant shareholders, everyone else can starve.

> cutting out menial decisions such as customer service. … Each person in the US hired to do that job would spend their entire paycheck

This person can no longer get a customer service job, but why can’t they get another job? Customer service is hardly career with a huge sunk cost in training and with a non-fungible skill set.

If they go get another job, compared to the base case of economy = customer service, we now have economy = customer service (AI) + new job.

It's easy for anyone to go get a different job as long as the supply of jobs is infinite.

But it is not infinite; eventually, we reach a point where we no longer need additional ditch diggers.

Job supply trends towards zero. The ultimate logical conclusion of this train of thought is there is no point in keeping the lower classes alive. Why do we need 15 billion humans if they do nothing but burden you with their maintenance costs? Let them die so that the quadrillionaires can enjoy the Earth with their perfect AI workforces catering to their every need.

The future is bleak. If this is the sort of dystopia I can look forward to, then I would rather have AI simply wipe out humanity as a whole.

In Azimov's Robot series the society that chose to live with robots gradually destructed itself by just living longer and not having so many children. The other part of humanity that avoided robots flourished (not without suffering). But that all required new planets for settlement (I am looking at you Elon).

Trying not to spoil a 40+ year old story, but Asimov eventually retconned that the flourishing of humanity was driven by a benevolent AI behind the curtain.

On the plus side: In that particular dystopian future, we may actually need more ditchdiggers for a time so that the dead may be buried.

“Demographic and labor market trends in the U.S. point to an ominous scenario. The nation potentially faces a shortfall of millions of workers in the decade to come — especially in the critical health care sector — due to a projected reduction in workforce participation.”

The supply of jobs exceeds the supply of workers, so yes, you should be able to go and get another job.

Give AI a medical license and all those critical health care jobs will literally disappear overnight.

It would require several breakthroughs in robotics and AI to automate a nurse's job. And then it would still be unlikely that this kind of automation is saving costs.

Why not - after the first automated robotic nurse it seems unlikely the second one will cost more than raising and educating a human nurse.

For a company the costs of raising and educating humans are only a fraction of their taxes, which they might mostly avoid anyway. The costs of employing a nurse (robotic or human) for a year are much more relevant. And there I am skeptical current robotics can hold a candle to (relative) cheap human labor.

My prediction is that when Chinese factory-cities adapt to tremendous demand, we will see a new digital Renaissance with teraflops of compute in toasters and kettles. And we will laugh at laptops with 8 GB of RAM so hard.

Your compute is someone else's sand.

More likely, we will never know

https://en.wikipedia.org/wiki/Productivity_paradox

> We may reach a point where the only ones able to afford compute are AI companies

Nah. I think "good enough AI for 95% of people" will be able to run locally within 3-5 years on consumer-accessible devices. There will be concentration of the best compute in AI companies for training, but inference will always become cheaper over time. Decommissioned training chips will also become inference chips, adding even more compute capacity to inference.

This is like computing once again. In 1990 only the upper class could afford computers, as of 2000 only the upper class owned mobile phones, as of now more or less everyone and their kid has these things.

1990? We were solid lower-middle class, and I got a computer for Christmas in 1983. I bought my own, from $$ saved by working in 1987.

Computers were roughly ~ $1000 in 1990. How did your lower-middle class family justify a $1000 expenditure inflation adjusted to $2565 today? Average minimum wage in the US is $11.30 so that's 29 days working at minimum wage.

My family was on the border of upper-lower and lower-middle and we bought a computer once and used it for 10+ years. I dumpster dove later to scavenge parts for upgrading until the mid 2000s when cheap computers became available.

> How did your lower-middle class family justify a $1000 expenditure

What, like a yearly vacation? Maybe they stayed home for Christmas one year instead of flying to visit family

Flying? We were solid middle class in the 80s and my first plane flight wasn't until 2001 (and then only because I was away at college and my mother had died suddenly). My parents hadn't flown since the 70s (before my sister and I were born), and even then, that was a rare thing for them.

Our childhood vacations were single-day (so we didn't have to pay for a hotel) road trips to a nearby state to go to an amusement park, or multi-day trips (also within driving distance) where my dad had to go somewhere for work and the hotel was paid for by his employer. It was a huge huge deal for us when, in the late 90s, we drove down to Disney World (a 13-hour drive) for a several-day trip.

And we never traveled around Christmas; that was one of the most expensive times of the year to travel!

Not sure when or where you grew up, but most middle-class folks in the US in the 80s didn't have a lot of discretionary income, and flights were (inflation adjusted) quite a bit more expensive than they are today.

I suspect your family was not as middle class as you think it was. You're describing a very similar childhood to what I had in the late 80s, but we were lower class for sure

I'm not saying that middle class families flew all the time in the 80s, but they absolutely could afford to if they wanted to make it a priority

A cursory google search seems to bear this out. Cheap flights in north america started in 1978 with some air travel deregulation.

GP claims their family was lower middle class not properly middle class. My family mostly traveled like kelnos family did at the time. Also gas prices in the 80s-90s were so cheap that it rarely made sense to fly over driving. We flew as a family twice as a kid because we were an immigrant family and we saved up to visit the country of origin but it was ridiculously expensive to take the whole family, so dad stayed home one vacation, and we always stayed there with family.

We did have a computer but it was really a one time expense. At the time computers were improving quickly so I scavenged parts which wealthy areas that threw last Gen hardware away but were better than what we had (and I was a kid with a lot of time on my hands.) Giving a computer to a kid for Christmas in '83 is a very different value proposition than even a family vacation because a vacation is something the whole family does.

They said solid middle class not lower.

My family was working class not even lower middle class.

And even we flew a few times in the late 80s early 90s, and we had a (probably used) Tandy computer that hooked up to the living room TV.

People have different priorities. We certainly couldn’t have afforded a current generation top of the line computer, and we couldn’t have flown every year. But an older computer and the occasional flight were firmly attainable to anyone with stable job if they really wanted them.

> We were solid lower-middle class

Yes, obviously a Tandy or C64 in 1990 is different, but anyway this thread is beating a dead horse. I regret even starting it. It's the kind of off-topic nonsense that HN is filled with these days.

>$1000

That depends very much on the computer.

https://christmas.musetechnical.com/ShowCatalogPage/1990-Sea...

Commodore 64C,1990, $159.99

My parents were working class in the 80s and we got a used Tandy that plugged into the TV and ran BASIC.

Yes and also keep in mind that low-income in US is high income in most of the world!

I hate this point, so what? It's not like the lower class in "pick you region of interest" can take advantage of this localized price disparity. The poor person is poor based on their spending power with respect to the local economy and its pricing.

Using this example: a computer was an unlikely purchase for a lower-middle class person in the US, but it wasn't totally unattainable. Many people in the US probably did it, and some of them probably found some positive return on that investment.

That's not true of many "objectively" poor people in the world, who even if they could buy the computer, they might not have had access to electricity to run it.

I’m not sure what your point is? Today, many (most?) of those “poor” people have smartphones which are more powerful than those computers were.

We were solid middle-middle class and didn't have a computer until 1989, and it was a "free", 2- or 3-year-old computer from my dad's work that they were going to throw away. We absolutely could not have afforded a computer during the 80s.

Even in the 90s, we kept relying on cast-offs from my dad's employer, and when I was preparing to go to college in '99, my parents scrounged to buy me the parts for a computer to build and take to college. But even then, my dad bought the parts at a discount through a former co-worker's consulting company, and vetoed a couple of my more expensive component choices.

And now that I think about it, my first laptop in 2003 was my dad's old work laptop that had been decommissioned.

You couldn’t afford a Commodore 64 or spectrum? Yet were middle class?

US median household wage was $24k in 1985 and a c64 $150

More likely your parents decided to spend the money on something else. Like a $400 19” tv

> It is a unique failure outcome I have yet to see anyone talk about

It seems likely to me that we will reach a violent, bloody revolt before we possibly reach this point. That may be why no one is taking about this failure mode

> My prediction is no, because productivity gains must benefit the lower classes to see a multiplier in the economy.

> It decreases savings rate and encourages spending among the class of people whose money imparts the highest multiplier.

Huh, what? What kind of multiplier stuff are you talking about here?

The central bank looks at the overall spending in the economy (well, including forecasts), and compares that with its targets. They adjust their policy stance accordingly to try and hit their targets.

If people become more or less likely to spend their money ('multipliers') the central bank can and will adjust the amount of money available.

I would argue we've even already seen this play out with productivity gains across the economy over the last 40 years. The American middle class has been gradually declining since the '80s. AI seems likely to accelerate that trend for the exact reasons you point out.

A lot of people recognize this pattern even if they can't articulate it, and that's why they hate AI so much. To them, it doesn't matter if AI lives up to the hype or not. Either it does and we're staring down a future of 20%+ unemployment, or it doesn't and the economy crashes because we put all our eggs in this basket.

No matter what happens, the middle class is likely fucked, and anyone pushing AI as "the future" will be despised for it whether or not they're right.

Personally, I think the solution here might be to artificially constrain the supply of productivity. If AI makes the average middle-class worker twice as productive, then maybe we should cut the number of work hours expected from them in a given week.

The complete unwillingness of people in power to even acknowledge this problem is disheartening, and is highly reminiscent of the rampant corruption and wealth inequality of the Gilded Age.

Technological progress that hurts more people than it helps isn't progress, it's class warfare.

Right there with you. Sure, I have gained a lot as a software engineer in the valley (I guess I'm upper-middle class now), but I'd give it up and go right back to lower-middle class (1980s) status I was raised in if it meant my kids could also aspire to a similar lower-middle class life.

This suicide-pact of "either AI goes crazy and 100 people rule the world with 99% of the world's wealth" or "AI fails badly and everyone's standard of living drops 3 levels, except for the 100 people that rule the world with 99% of the world's wealth" is not what I signed up for. Nor is it in any way sustainable or wise.

Too much class distinction / wealth between lower/upper classes, and a surplus of unemployed lower-class men is how many revolts/revolutions/wars have started.

You can easily live a “lower middle class 1980s life” on minimum wage today. Find a 1980s apartment, an early 2000s used car, and don’t bother paying for TV, Starbucks, a cellphone, etc.

The rent on a literal 1980s apartment (let alone SFH mortgage) in every area that I’ve lived in has scaled up faster than average income. This is the trend for essentials.

Consumer electronics are cheaper; this is the trend for substitutable goods.

Love me the right 20-30 year old car, but the dramatic cost rise around covid times means the savings is only relative to new. A 3x increase in old car prices hasn’t been matched by 3 fold wage increases for most.

And of course we’re discussing this in a larger conversation about automating away 1980s jobs.

If you want 1980s, you have to go all in. That means you can't live in today's areas which have improved in the 40+ years since the 1980s, but move to areas that are not developed yet or have stagnated - you don't get those improvements, amenities, and job markets/school systems of 2020s at 1980s prices today.

You also aren't buying today's average used car (which has gone up about 50% per CPI numbers, not 300%, since 2020), with a backup camera, blind spot monitoring, side curtain airbags, etc. Hop on FB Marketplace and find the cheapest used car from 2010+ that runs: it's still more fully featured, with better safety and fuel economy than that 1980s car, and likely cheaper in adjusted dollars than 1980s.

What 1980s jobs have been automated away without providing alternatives? Switchboard operator> Call center rep; typist> administrative assistant, video store clerk> regular store clerk, etc.

this is straight up not even true, and even if it was, you're ignoring the fact that things like cell phone and internet are required to function in modern society.

$10 a month cell phone plan to pay bills and a $50 Android phone easily fits into this budget for essential internet use.

Remember, the OP wants to live a "lower-middle class (1980s)" life, so he doesn't need the latest camera phone, Snapchat, Netflix, and more.

They are only required for a modern lifestyle. Plenty of Amish manage without them.

That's because they literally live in an isolated society where everyone else accords to the same rules about technology. Unless you're going off to live on a commune, you're not going to be able to live like the Amish in 2026.

Technological progress that hurts more people than it helps isn't progress, it's class warfare.

We've never seen such a thing before, so I don't know how you can draw such sweeping conclusions about it.

The longer we ignore the collapse of the middle class, the angrier the bottom half of the economy will get and the more justified they will feel in enacting retribution. We absolutely have historical precedents for what happens here: The French Revolution, the Gilded Age, etc. People will only tolerate a declining standard of living for so long.

Maybe so, maybe not, but you are trying to argue two completely different points here.

Well, I see I've thoroughly angered the billionaire wannabes. Funny how they never offer any solutions to these problems and just make a stink about them being acknowledged in the first place.

> Technological progress that hurts more people than it helps isn't progress, it's class warfare.

I think this is right. The historical analogue I keep drifting toward is Enclosure. LLM tech is like Enclosure for knowledge work. A small class of capital-holding winners will benefit. Everyone else will mostly get more desperate and dependent on those few winners for the means of subsistence. Productivity may eventually rise, but almost nobody alive today will benefit from it since either our livelihood will be decimated (knowledge workers, for now) or we will be forced into AI slop hell-world where our children are taught by right-wing robo-propagandists, we are surveilled to within an inch of our lives, and our doctor is replaced by an iPad (everyone who isn't fabulously wealthy). Maybe we can eek out a living being the meat arms of the World Mind, or maybe we'll turned into hamburger by robotic concentration camp guards.

I like how you identified the pattern of defeat and still complied in advance.

What?

Yes.

> that money goes to a mega-corp and the savings is passed on to execs

And the execs invest that money back into the economy.

And the executives do this in a golden shower of trickle-on economics.

...which didn't work so well during the Reagan administration, but I guess we're on course to try it again.

No country has ever raised up poor people by eviscerating the wealthy.

The Nordic model does a great job of providing a poor-raising floor (which also launches entrepreneurs at a higher success rate than in the US). And Norway in particular seems to have figured out how to take commons resources and turn them into common wealth while industry retains profit incentives.

No one is “eviscerated.”

And it’s disingenuous to use that term for any proposal that has even the slightest public traction in the US. The most extreme proposals require single digit taxes on hyperwealth which might not have impact beyond stabilizing it and certainly wouldn’t make anyone not-wealthy.

No one is talking about eviscerating the wealthy. Yet. But if we pretend the only options are (a) unencumbered hyperwealth with attendant hyper income inequality and (b) eviscerating the wealthy for long enough, it’s more likely some people will eventually embrace the latter.

And this is particularly relevant for the age of LLMs. None of them approach intelligence with reliance on a huge data commons (and likely even data that isn’t intended for the commons) they’re an enterprise with a natural arrow from the commons to the common wealth, if we can remember a culture that sustains it.

The Nordic model depends on sitting on an ocean of oil.

> No one is talking about eviscerating the wealthy.

See Bernie Sanders!

Also, if you die in Washington State, your estate is taxed at 75% (40% federal, 35% state).

Maybe you should choose your words more carefully, Walter Bright. To eviscerate means to disembowel. Nobody is pushing to physically hurt the rich. But people are upset that their standards of living are declining while every opportunity to give more money to the rich is executed.

Bernie Sanders asked for taxing the rich and the corporations. Taxing someone does not mean disembowel.

I know what the word means, and I am sure you understand it is not meant to be taken literally.

For example, do you remember when AOC proudly wore a dress with the words "Eat the rich" emblazoned on it? Nobody accused her of suggesting cannibalism.

Bernie Sanders has frequently stated that billionaires should not exist. He used to excoriate millionaires, until he became one himself.

The "Nordic model" refers to the socioeconomics common in Nordic countries (Denmark, Finland, Iceland, Norway, and Sweden), not just to Norway.

It's about how you approach commons and common wealth. Any commons will do. It does not rely on oil resources per se.

Let's say for the sake of argument it does depend on oil wealth, though.

The US currently has something like 30x the proven oil reserves that Norway does (>200 billion barrels vs ~7 billion). It has already produced at least 200billion barrels since the 1850s. What if the US had treated the wealth from past oil production the way Norway has? What if it treated the next 200 billion that way?

And oil is only one of many commons resources to choose from.

> See Bernie Sanders!

Yes, I addressed Sanders proposal in my earlier comment: "single digit taxes on hyperwealth which might not have impact beyond stabilizing it and certainly wouldn’t make anyone not-wealthy."

A single digit wealth tax is unlikely to fully offset even conventional yearly returns, hence the "might not have impact beyond stabilizing" the wealth of those subject to it.

Even if we assume no yearly returns though -- simply a 5% bite out of net worth -- a wealth tax will not make anyone in that economic strata unwealthy (there's a billions-floor beneath which it wouldn't apply, leaving the worst case still radically prosperous).

There's no reasonable basis to characterize that as "evisceration."

But repeating loaded terms like that as part of an ideological rosary is a common religious and rhetorical strategy.

> Also, if you die in Washington State, your estate is taxed at 75% (40% federal, 35% state).

My understanding is that estate taxes generally have thresholds that have to be met before they kick in. Federal threshold is on the order of 10million, WA is 3 million.

Having dynastic wealth flows limited over a few million dollars is also not reasonably described as "evisceration" (especially with all the other vehicles for transferring wealth).

May as well complain to God that you can't take it with you as that you might have to loosen your grasp at death to render unto caeser.

> The US currently has something like 30x the proven oil reserves that Norway does

And 60x the population. And defends the world with defense expenditures.

> simply a 5% bite out of net worth

Once that door is open, there will be no end to it. Washington state enacted a 7% capital gains tax, and the next year raised it to 9.9%. Now they're close to enacting a 9.9% income tax.

> My understanding is that estate taxes generally have thresholds that have to be met before they kick in. Federal threshold is on the order of 10million, WA is 3 million.

If your estate is $1 billion, your estate tax will be:

35% of $997,000,000 + 40% of $990,000,000 = 74.5% effective tax rate.

> Sanders

said many times that billionaires should not exist

> that you can't take it with you as that you might have to loosen your grasp at death to render unto caeser.

You could take all the money from billionaires and it won't raise the general standard of living. You will also never have companies like SpaceX.

Perhaps a good argument, but you shouldn’t bring in SpaceX. SpaceX was founded by a millionaire who spent half his wealth on it.

$100 million. He's also founded many other companies. Jeff Bezos has invested an estimated $10 billion to over $14.6 billion into Blue Origin as of early 2025.

> And 60x the population.

OK, let's assume that oil is the only relevant resource, and population is the other relevant factor, and there's no efficiencies of scale or exceptional American ingenuity that can be discovered. 30x the resources combined with 60 times the population would mean we should be able to provide at least half the floor that Norway does, right?

Does that mean if we discover another resource the US has, or efficiencies of scale, or an exceptionally ingenious solution, we can revise that number up?

What if we'd behaved differently in the past when our oil to population ratio was similar to Norway's (or better)? And when's the 2nd best time to start?

Or is this more of a shrug we're nothing compared to those fortunate Scandinavians and that's why we just can't have nice things that they have no matter how nice it would be to have those things, stiff upper lip chaps, greatest country in the world situation?

> And defends the world with defense expenditures.

This is the "I have to wash my hair that night" of excuses -- plausibly true at some level yet studiedly ignoring such a wide latitude of optionality involved that it's clearly covering a refusal.

> Once that door is open, there will be no end to it.

Slippery slope fallacy. Tax rates move, but not monotonically.

For average US households effective income tax rates are more or less flat for the last generation or three. For high eaners? To say that the trend is downward doesn't cover it, it's a dramatic drop compared to midcentury era rates.

Wealth taxes in the countries that have them don't seem to demand an ever larger share.

If your strongest example is washington state a capital gains tax rate change within the same order of magnitude (that's still well below average effective income tax rates) you don't have much of a case.

Lots of unevisceratedly wealthy people live in states where the highest income tax bracket has rates over 10%. I'm sure the people with over a million a year in income will remain prosperous.

> If your estate is $1 billion, your estate tax will be:

Also you'll be dead and as such won't have continued control over any of your previous assets. Hence the earlier comment to the effect that one may as well complain to God about having to loosen ones grasp on them at death as rail against rendering unto caeser.

The natural "tax rate" on assets at death is 100%. Any smaller number than that is an affordance from the cooperation of society.

> said many times that billionaires should not exist

Perhaps he's right and it's hard to draw a solid straight line between that scale of personal profit and input. Perhaps he's wrong.

Still, as discussed, the most extreme concrete policy that Sanders has proposed is a wealth tax of 5%, and we've discussed why the dynamics of that are not existential threats to the wealth of anyone, much less worthy of the term "evisceration."

No one is proposing taking all the money from even the billionares. Most likely outcome of a 5% tax rate is stabilization.

> it won't raise the general standard of living.

And yet other societies have managed to produce better general standards of living (and higher rates of entrepreneurial success) via various policies including some different tax rates.

> You will also never have companies like SpaceX.

Companies exist to broadly source capital to bring to bear on an enterprise. So it stands to reason that companies like Space X will exist whether the capital comes from a wide pool of investors whose upside is limited somewhere below hyperwealth, or a contribution from a narrower set of investors with a higher concentration, at least as long as there's a credible upside.

What's your explanation for why SpaceX, Amazon, Google, Walmart, etc., are American companies, and not Norwegian?

That's an interesting question. And to the extent that we're shifting discussion from "taxes are terrible mistreatment of the hyperwealthy" to "taxes might make national business/economic development less robust", OK.

Worth noting that GDP per capita of Norway and Iceland are pretty close to the US:

    https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita

Denmark's on the same order and Sweden isn't too far behind (and still has a handful of their own recognized global successes).

Using general stats like that helps avoid sharpshooter fallacies that could be hazards in picking a list of high profile successes.

Still, let's talk about those successes. What are the conditions that gave rise to SpaceX, Amazon, Google, and Walmart? Whatever they are, none of their stories seems path-dependent anyone's personal billions. SpaceX owes as much or more to government decisions to privately source launch capability (not to mention path dependence on public programs supporting a certain related company). Google was famously founded by not particularly wealthy PhD students with initial capital well under a million dollars. Walmart wasn't founded with millions let alone billions. Bezos was probably the wealthiest founder when it comes to your list -- maybe had a six figure net worth, possibly seven, certainly good networks for raising capital -- but the bootstrapping capital that went into it didn't require anyone to be a billionaire.

Whatever the US does right as far as positive business environment goes, it doesn't require personal billions, so it's pretty unlikely to stop with additional taxes on billionaire concentrations of wealth. Taxes which, again, at the level of any proposed rate, would most likely not even un-billionaire anyone.

Right, because the wealthy were eviscerated before horse and sparrow economics.

Isn't that exactly how the USSR became a global superpower?

No, the poor stayed poor or even worse, starved to death. USSR self imploded.

Wasn't it like a surreally peaceful dissolution?

Soviet people’s standard of living was way below Western standards. Stalin took Russia out of the Middle Ages and into the w0th century at the cost of millions and millions of Russian luves.

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