Hacker News Reader

Comment by visarga | Hacker News Reader

If AI produces surplus where does it go? Not talking about investment backed datacenter buildout and AI labs. Talking about the results of AI work...

I think AI outcomes distribute to contexts where it is used, and produce a change in how we work, what work we take on. Competition takes care of taking those surpluses and investing them in new structure, which becomes load bearing and we can't do without it anymore.

In the end it looks like we are treading water, just like it was when computers got 1M times faster in a couple of decades, but we felt very little improvement in earnings or reduction in work.

Surplus becomes structure and the changed structure is something you can't function without. Like the cell and mitochondrion, after they merged they can't be apart, can't pay their costs individually anymore. Surplus is absorbed into the baseline cost.

View on HN

For my personal projects, any time saved on programming gets used up writing more ambitious programs.

For a business, the question is whether you can make more money by doing more ambitious things.

For a business, the second question is what your competition is going to do. If you have a monopoly over something, you can reap the rewards. But if you're in a space with lots of competition, you might not end up with any better profit margins if everyone's in a Red Queen's Race.

The surplus goes to the owners of the capital. Labor has been losing to capital for sometime now

If existing capital starts to generate excessive profits, more capital will be built, which will require human labor and will make the original capital less valuable.

In theory. In practice, the excessive capital of the incumbent allows them to price out or buy the budding competition, or the legislators, so as to protect their position.

The natural state of a capitalist system is the monopoly.

If AI being a million billion zillion times more productive at doing bullshit jobs nets in very little economic gain, then that lays bare the net economic value of all our bullshit jobs.

But given that the stock market hasn't panicked, this must mean at least one of these premises is false:

1. Economic activity is relatively flat.

2. AI makes us a million billion zillion times more productive than we used to be.

3. The stock market is rooted in reality.

the market split from reality in 2020 for the last time. This is all just zeroes and ones, which is why they can make the real economy tank.

> lays bare the net economic value of all our bullshit jobs.

This was already obvious, the more important question is what are we (collectively, society & our governments) going to do about it?

We (should have) already known most of our jobs were bullshit jobs, especially white collar jobs. The difference is now we might have something coming that will eliminate the bullshit jobs.

But society will always need bullshit jobs or the whole system collapses. Not everyone can go dig ditches, so what do we do?

Clean the bed pans of boomer retirees. And pay into a collapsing social security to finish off the wealth transfer.

Big opportunity for irobot to release a bedpan cleaner.

> In the end it looks like we are treading water, just like it was when computers got 1M times faster in a couple of decades, but we felt very little improvement in earnings or reduction in work.

I think this is a very important point. The hedonic treadmill means real gains are discounted. The novelty information cycle is like an Osborn Effect for improvements, like the semi-annual Popular Mechanic's flying car covers where there is an enticing future perpetually nearly here and at the same time disappointingly never materialized.

It's up to business owners to decide. At the end of the day, in free market economy, goods become more affordable.

Agriculture is a good example of that: http://www.johnhearfield.com/History/Breadt.htm

I think it's gonna mirror how the white collar classes, coastal elites, professional managerial class, whatever you want to call them, sold the countries industrial base to the far east. They got a little bit of money out of it but the biggest gains were the material wealth. $1 widgets instead of $2 widgets. All the people who weren't hurt by it got to live with more material plenty. Of course the nominal values of things didn't go down, but that's just inflation which is somewhat separate of an effect.

This time the jobs most in the crosshairs of AI are the jobs that constituted the paper pushing overhead of modern society, all the paper pushing jobs. Instead of $1 widgets from China replacing $2 domestic widgets it's gonna be $1 AI services replacing $2 services that require a real human.

This is hard to reason about because people tend to consume these kinds of services in big multi hundred or multi thousand dollar increments but in practice what it means is that when you have to engage an accountant, engineer, having something planned out in accordance with some standard, that will be substantially cheaper because of the reduced professional labor component.

And of course, as usual, the string pulling and in investor class will get fabulously wealthy along the way.

Remove AI from the statement and ask again.

Does the work you do provide more or less value to the company than your salary? Where does the difference go? If your killer feature closes a $5M deal, who gets that money?

We live as capitalist serfs. Someone else gets all the value you create, and you should be grateful for the peanuts they toss back to you.

> If AI produces surplus where does it go? Not talking about investment backed datacenter buildout and AI labs. Talking about the results of AI work...

The 1% pockets, this is where the vast majority of the extra productivity computers/internet/automation brought goes to for the last 50 years: https://www.epi.org/productivity-pay-gap/

The study doesn't say it went into the 1%'s pockets. It says it went to 2 places:

1) The salaries of corporate employees 2) Shareholders and capital owners

Regarding number 2: "Shareholders" would include anyone who owns any stock at all, including a lot of middle class people with a simple S&P 500 ETF in their portfolio.

And the increase in productivity allowed more people to become capital owners, AKA entrepreneurs. The explosion in software entrepreneurs, for example.

Then why are wealth inequalities exploding? Why are we just about to witness the first trillionaire?

Because no matter what fairy tales you want to believe in your $20 "invested" in palantir won't make you a "shareholder" lmao

Wealth inequality is increasing, but the wealth isn't all flowing into the 1%'s pockets.

Lots of middle class people have graduated into upper-middle class: https://www.aei.org/research-products/report/the-middle-clas...

Wealth inequality is still a problem. But it's not just the people at the very top benefitting.

I don't think you understand what the 1% is, it's not your neighbour who has a nice house, a swimming pool and a ferrari...

https://images.seattletimes.com/wp-content/uploads/2017/12/9...

https://www.peoplespolicyproject.org/wp-content/uploads/2020...

https://datawrapper.dwcdn.net/CvQar/full.png

https://static.guim.co.uk/ni/1415721490539/Wealth_line-chart...

Definitionally the 1% is people making ~$800k+ a year.

Upper-middle class is people making ~$200k/year.

A lot of people have moved from middle class to upper middle class over the last decade. Both those categories are outside the 1%.

When did upper middle class start meaning upper class? Something like 90% of Americans identify as middle class now.

That's why someone's self-described position means nothing. Something like 80-85% of drivers describe themselves as "above average" at driving, too.

The upper limit and the median of the household income quintiles as of 2022 are:[0]

  Lowest: $ 30,000 / $ 16,120
  Second: $ 58,020 / $ 43,850
  Middle: $ 94,000 / $ 74,730
  Fourth: $153,000 / $119,900
     Top:        - / $277,300

I think getting into the weeds on whether $80k or $100k or $120k/yr is a middle class sort of misses the point, but at least with my eyes it is hard to argue you're middle class if you're making more than about $150k at the most.

Even the GP, which I directionally agree with, says "upper-middle class is people making ~$200k/yr" but you're deep into the top quintile by that point, probably top 10%. I don't know what percentile I consider "upper middle" but it's definitely lower than top 10%.

[0] https://taxpolicycenter.org/statistics/household-income-quin...

A good indicator that someone is simply being dogmatic and not arguing in good faith (e.g. actually trying to understand someone's POV, and being open to being proven wrong in their assumptions) is when it takes them 5-20 minutes to reply until a particularly good point is made and then they disappear into the ether.

That's called "having a life" or "living in a different timezone"

I didn't say A means B 100% of the time, just that it's an indicator. The same way having a car with a lot of dings and scratches and holes doesn't mean you're a bad driver, you could have just purchased it that way or they could have happened through no fault of your own. But it's still an indicator - one piece of evidence to be looked at holistically.

But I notice you haven't actually responded to the point that "the 1%" actually does mean "your neighbor with a nice house and a pool" because $800k income puts you in the 1%. That's two doctors in not-particularly-highly-paid specialties. That's two good attorneys at big firms. That's two FAANG software engineers. Definitionally there's not going to be a ton of people in that group, it's hard to get into that group, but they're everywhere not just billionaires twirling their mustache and trying to reroute rivers to sell the water like some caricature.

#2 only works if the public is allowed to invest when the new technology is in its early stages, which is currently not the case. Microsoft went public in 1986 at a valuation of $2.3 billion (in today's dollars). What's OpenAI / Anthropic going to be worth by the time they IPO? $1 trillion? $2 trillion?

Eh, buying and holding the S&P 500 (the Vanguard Bogleheads strategy) has allowed a lot of people to retire early.

> Regarding number 2: "Shareholders" would include anyone who owns any stock at all, including a lot of middle class people with a simple S&P 500 ETF in their portfolio.

Yes, but shares are not at all uniformly distributed. Tim Cook owns 3.28 million shares of AAPL. For comparison, the 50 million Vanguard customers have to divide 1.3 billion shares amongst them, averaging about 26 shares of AAPL each.

> And the increase in productivity allowed more people to become capital owners, AKA entrepreneurs. The explosion in software entrepreneurs, for example.

The majority of those end up getting bought by larger software companies.

Overall capital ownership is increasingly concentrated among a small number of elites.

Reply on news.ycombinator.com