Last gasps of the rent seeking class?
geohot.github.io
geohot.github.io
That is the market being free, George.
However, a "unregulated free market" is nearly impossible--somw player will eventually drive out competition to maximize profits and some will not be troubled at harming or killing their customers in the name of immediate profit (tobacco, sugared drinks, talc powder, and round-up come to mind immediately but the list is very long).
Is market with enough regulations to ensure competitiveness and transaction transparency (including long-term consequences) truly "free"?
I assume that the pools of either corporate entities and/or their leadership cogs have a much higher percentage of adherence to said belief than the general pool of either buyers and/or sellers excluding such, as the corporate implementation of liability shielding exists specifically to sate this need.
Using that definition amounts to classifying all real markets as non-free.
Unregulated markets cannot exists in reality or in a sound theory, only in wishy-washy fairy tales.
Not to mention, that definitions shift over time. Or that claiming the definition to mean “unregulated” to the exclusion of all other meanings is a form of propaganda-slash-evangelism (and so, duly noted in cad you were unaware, as it can be received quite poorly). Or that “fair” is similarly misinterpretable for the same reasons: I prefer fair markets because I can eat cotton candy and listen to people screaming on the rides as I consider each booth’s offerings - and my interpretation of that statement is, in at least two communities I used to work in, the most contextually appropriate take on it! (AI, of course, can’t keep up with that usage, which is honestly a plus in favor of it, but for the ESL folks trying to figure out what I mean, fair → faire / carnival / festival.)
But running a call center overseas is not one of these things.
When governments kowtow to corporations, it's the corporations who are then acting as the government. For example, in states like Texas, Alabama, and Wisconsin, laws prohibit automakers from selling vehicles directly to consumers. But these laws only exist because dealer associations wanted and lobbied for them to protect their business. Which is to show that freedom itself isn't a matter of who is kowtowing to whom, but merely whether or not kowtowing is happening whatsoever. If it is, then someone's freedom is being restrained, and said market environment could be argued to not be "free". In fact, this is what Tesla has argued multiple times in court in such states in that these laws are anticompetitive, and violate due process and the commerce clause.
In the first, it's a "free" market because everything moves smoothly and efficiently in ways that make economic mathematicians happy. There's perfect information, all transactions and prices and actor-identities are are known, and it's generally assumed there are no monopolies or monopsonies.
In the second, individual actors are "free" to construct secret deals with special secret prices, non-disclosure agreements, act anonymously through proxies, etc.
At least in US politics, the equivocation is common: Someone appeals to the benefits of the first, while promoting the contradictory mechanics of the second.
But in the sense they mean, the violence of the state precludes a free market. For the record, I do not believe in the validity of money, coercion, usury, violence.
Nor you cannot call it a free market if the government is allowed to favour or penalise one entity or one sector over the other.
I know words don't mean anything these days, but there is no angle in which you can call modern economy a free one.
Is it a free market if there’s antimonopoly agency?
What we have is a "capitalist market", where those with more power (capital) within the market leverage it to exploit the other participants. Capitalists use their money to extract as much money as possible from a segment of the market, usually destroying it in the process. But for a beautiful moment in time they created a lot of value for shareholders!
The grand, boneheaded naivete to fail to understand that middlemen are an emergent and intrinsic property of free markets in practice.
Though Ronald Reagan dared asked what nobody else thought to ask, "what if monopolies ... good?", so now we're back with a new set of Morgans and Vanderbilts.
The billionaires of today are just pure rent extraction schemes on things that already exist, make money by enshittification of what is already there. Nothing of value ever needs to be created. They use the govt to help them, after all why create anything new at all, when you can just take it?
Like, in some really fucked up neoliberal hellscape it might make sense to charge money for reservations separately, but that introduces all sorts of extra new inefficiencies that weren't there before. Like, now that reservations can be bought and sold, it's now legal, possibly moral, and most notably, profitable to hoard them. And since reservations are a derivative on the underlying capacity of a restaurant, you're going to have tables that are "reserved" but unused because the "owner" of that reservation happened to sell it on to a third-party vendor that's now trying to hike the price to last-minute diners.
Meanwhile, the actual restaurant trying to sell food, can't sell food in their own restaurant, because their salesfloor is full of empty tables that are worth more to the market dead than alive. They are undergoing demand destruction as they are involuntarily transformed from a food vendor into a landlord of tiny plots of real estate whose desirability has long since been detached from any surrounding circumstances.
The argument for markets is that unregulated commerce is very good at calculation. Or, more specifically, that price discovery is the process of putting bounties on better information than is currently available. The flipside of this is that everything around the market needs to be regulated or you're calculating garbage into garbage.
And you made me think of this current market trend where we can effectively beg for tips and donations from a small, roofed, and electrified domicile and you might even become famous, but if you do it out on the street, it's frowned upon and people are less willing to give.
If someone is willing to pay for a reservation and a restaurant willing to take payment, then it’s a free market. It’s not inefficient at all.
You may not like it, but that doesn’t mean it’s not free
And now, you want to actually go to Restaurant A and eat a curry, but they look at you like you've grown an extra head. Eat Food? What, here? In Restaurant A?
Congratulations, you've just invented banking, where people look at you similarly if you attempt to actually go and collect the gold that your bank says represents the money that's actually stored as a series of north and south magnetic domains on a thin sheet of rust painted onto a rapidly-spinning aluminium disk.
Meanwhile I ring the guy at the restaurant started by his grandmother when she fled Pakistan at the end of the Second World War, about ten minutes before we show up, and when I get there I've got a pint of Guinness, a menu, and some chapatis and chutney already on the table.
I prefer it that way. The food's better, for a start.
I don't need the menu, the guy's just going to bring me the desi shit from the family meal.
If it's not useful to society, society has no moral reason to tolerate it. If it indeed benefits a few individuals massively while on net reducing utility to society, an argument can be made that society has a moral imperative to ban it. Hence the limitations on gambling, on alcohol and tobacco marketing/sales, etc.
Of course not.
> If it's not useful to society, society has no moral reason to tolerate it
Then it’s not a free market.
To be perfectly clear, bots don't eat food, and we don't need a market to tell us otherwise. Even an individual having Google Duplex reserve ten tables in advance isn't going to be able to eat ten dinners. But if reservations actually cost money, then any restaurant doing the smart thing of just skipping no-shows to keep the kitchen running is now defrauding reservation holders. Capacity has to be reserved and left fallow for the sake of optionality.
Bringing this back to market terms: if reservations are so in demand that restaurants have to charge for them, why don't they just raise the prices on the actual food instead?
The ideal state of the ecosystem is not the ideal state of any organism within it.
Back before the iPhone I used to get into arguments with HCI specialists that phones could be like butlers and should know with all the sensors that they have that you put it in your bag and behaved accordingly. I was told that was impossible then but it seems more possible now. Had the world gone at all that way we'd have a freakin' API to make a restaurant reservation and wouldn't have to go through multimodal hell.
What you call multimodal hell is what others call meaningful choice and market competition.
Right now people are so angry about LLMs being a driver of enshittification that they aren’t realizing that LLMs are the first real threat to enshittification we’ve seen as they can wait for those stupid little anime girls and click on the street lights and the GDPR popups and ignore the ads and all of that.
I still imagine there’s another world where there was an open API for e-commerce that didn’t suck and the choice was adopt it or go out of business.
Do you mean like the pocket protection on my galaxy phone where it knows when it's in my pocket and blocks accidental touches?
Factor in how a lot of tools have weaponized their interfaces against their users - then the motivation isn't just cost, but usability.
But the market is so unbelievably messed up that this is not what happens in practise.
The work on self-driving cars would not be done if there were not a way to profit from it. If it isn’t expected to earn more than it costs, it wouldn’t be done.
Now maybe it’s all being done because of expectations of a monopoly (this is a free market consequence, right?), but …
And more substantial is that when someone shows something can be done, its orders of mangnitude easier for $ENGINEER at $CORP to get $CSUITEs attention to get a budget / justify the risk.
Your self driving car example is the best example of this. Since waymo and tesla got popular NVIDIA really started pushing their self driving cars for everyone tech.
https://youtu.be/EzAVW1VgzcI?si=gfnOJoaO9hfIFXX1
And NVIDIA isn't the only one.
I disagree. "Expected" is hiding a lot of the work there, and the reasons for that expectation could be rational or completely irrational.
Hypothetically "work on self-driving cars" would be done if some crazy psychic-trusting billionaire's psychic told him they would be profitable, even if all rational analysis said they'd be a bad business. A lot of major investments, especially in tech, and done based on hope or as a bet, not due to any real foresight.
George Hotz runs Comma AI, a self driving car company.
Most people only care about money as they have no choice. Absent a cash-first system money has become a social construct. The valuation of a dollar is entirely ephemeral now.
I see that social reality becoming more realized and the existing social system around money collapsing due to generational churns attenuation of the social significance.
Tech bros are little more than disciples of a dogma being missionaries for their dogma. There are other dogmas.
The sooner the other techbros get the same realization the better.
I didn't know that Geohot had anything to do with the acquisition, but insofar as he did, I'm glad it happened. There's a bunch of different and mutually-incompatible ways "the system" might collapse in a way leading to breadlines, and I have no reason to think your theory that it will be a result of Musk buying Twitter is any better than any other random person's theory about why the world is going to decline in terms of material prosperity in the near-future.
The existence of money is now a social construct
By that same logic we’d stop doctors from using antibiotics because now barbers will lose their job of bloodletting.
Economic rent is the extra money you can charge for owning a scarce resource. ML models are not waterfront real estate, they are IP. Other people can make more models if they can/want to.
Now, whether IP should be legally protected is a totally separate question, and while we in the West tend to assume the answer is obvious geohot would certainly not be the first person to suggest broadly applying private property rights to information makes questionable sense.
The P in IP is Property.
Totally different concept. But don't take my word for it:
> "Rent-seeking" is an attempt to obtain economic rent (i.e., the portion of income paid to a factor of production in excess of what is needed to keep it employed in its current use) by manipulating the social or political environment in which economic activities occur, rather than by creating new wealth.[0]
> In economics, economic rent is any payment to the owner of a factor of production in excess of the costs needed to bring that factor into production. [1]
Land used not to be owned (feudal lordship was functionally different than private ownership.) Then, society shifted, land became private, and that was the beginning of rent. This is enclosure.
The whole concept of IP is to explicitly extend this process to ideas -- they are not free, they are owned, and I have to pay you to use them. This is also enclosure, precisely.
network effects, distribution, proprietary data, systems of record
companies like opencode have none of the above
cursor's distribution has been faltering and they're hard pivoting to training their own models with their proprietary data to try to build their moat back
Enter Terms of Service, monopolies and duopolies, and maybe even cybercrime statutes.
There’s no law that says AT&T can’t just ban your account if you hook up your “talk to customer service” bot to their AI/overseas customer service phone tree army.
Or, they can just lock your account for “safety” reasons.
1. Demographics - Aging population needs transportation. God knows we certainly don't need really old people driving themselves. We got a taste of the future in West Portal in that regard not long ago.
2. Human Capital - The US has pretty much demonstrated that there is little desire to import low skilled labor. Where do these theoretical Taxi drivers come from? Or welders or plumbers. Labor is going to become increasing expensive no matter how you slice the pie.
3. Younger US citizens are going to gravitate to non-manual labor jobs. It is not just that every one is being steered toward college. Physical labor (trades) take a toll on the body. I know - I have work in them - and you quickly extrapolate what that will be like when you are 50.
0: https://www.census.gov/programs-surveys/geography/guidance/g...
You have to have the political will and support to do all this even as the almost inevitable controversial videos hit social media: people being manhandled by security guards while protesting their innocence, people complaining about how there used to be a stop on their street but now it's gone, etc.
In, or between? Like your link tells, urban is defined by 2,000 houses. At that scale, in-town transport doesn't really make sense. You can already walk just about everywhere in five minutes. A single train station to get you to other towns makes more sense, but...
- We already had exactly that in the past. Perhaps service ended because nobody wanted to use it? ...
- After all, the town already has the town things. The whole point of living in an urban area is so you can walk to all the things you need on a daily basis. If you are leaving the walkable bubble, you're most likely headed to a rural point to access that which cannot be offered in an urban setting. Transport isn't about where people live, but where they are going.
Having both is a good thing.
Almost always nowadays lol. Shit I’ve gotten poorer over the past few years.
The Chinese models are open source because they are not state of the art. Once they catch-up or lead, they will likely close them down by a government mandate. Just like Meta was fine with Llama being open source but once they started to get close to OpenAI/Google/Anthropic, they shifted their language to "maybe we won't keep doing that."
The idea that AI will end the "rent-seeking class" that has effectively existed for thousands of years is... not going to happen! The business model just adjusts. And if AI is going to be an economy-shaping super disruptor, the cloud-hosted models will continue evolving beyond what you could ever run at home under the desk.
I think geohot is burying the lead in this text in his post with a lot of speculation.
It's not not that these specific models will become closed it's that the hardware/hosting vendors have an incentive to train models where inference is custom tuned to their chip's dimensions and VRAM.
The Chinese models do a great job of showing what's capable on consumer/prosumer hardware because of export restrictions but anyone entering the hardware space has the same incentives to undercut the frontier labs so they can sell more hardware.
It's also not clear if being at the forefront of inference quality really matters. The open source models appear to be doing a fine enough job of keeping up even if they're a few months behind. So it seems like there's not much of a technology moat for these labs other than the capital costs of training/serving.
This "rent seeking class" is not a historical universal, regardless of how much college marxists insist that it is. Leaders can be good or bad, and they hold power in different ways. In America today we have bad leaders (across the entirety of the political spectrum) - and AI poses a lot of challenges in how they hold power. This is not to say Chinese leaders are any better - but the way they hold power is not challenged by AI. Business models will indeed adapt - but the condition is excellent, as they say.
> A home for poorly researched ideas that I find myself repeating a lot anyway
A couple decades ago people used to think that since anyone can build a website internet businesses will never have a moat. In a hyper-capitalist system the top players will always find a way to dig a moat.
92% of the world has electricity. 74% of the world has internet access. 58% of the world has a personal mobile internet device.
That means the median consumer can access the free AI chatbots from OpenAI, Anthropic, etc.
Moreover, if you compare this to the world in 2000, you'll see that things have only gotten better. ~25 years ago, only 78% of the world had access to electricity, and only 6% had access to the internet. Effectively 0% had access to a personal mobile internet device.
I think, if you look at actual statistics, it is easy to be optimistic.
Agentic commerce will render Amazon and the rest of the rent seeking marketplaces obsolete given enough time. Because LLMs can literally go straight to the seller and perform checkout, do market research to make sure the seller is legit, and the seller can sell for lower than on the marketplace since they aren’t paying a 15-20% cut.
First, I think there is value in the “rent seeking” Amazon marketplace because how else would the models “go straight to the seller”, another centralized search engine? Why not just use the Amazon one then?
Second, one of LLMs big weaknesses is judgement on what to trust. I would not trust the judgment of an LLM to determine “the seller is legit”… unless we outsource trust verification to a third party marketplace (who will want a cut).
Finally, OpenAI has been aggressively pushing for this so they can take a cut of the transaction. So it’ll just be another middle man.
Exactly this, and not just another middleman, a middleman with an obscene burn rate that isn't close to profitability and is incentivized to ratchet up prices as soon as they can.
And then AI procurement has problems on the buyer side. Do I just blindly trust that the model is going to make the purchase as specified? Do I trust the model's search capabilities and objectivity of returning results? How do I know that OpenAI isn't running its own "marketplace", only showing me options to buy that they want me to see while filtering out less desirable options for them?
It's a fundamentally less transparent experience than Amazon.
The sellers and the marketplaces can spend more time on their LLMs because it's their livelihood. It's the same asymmetry with different tooling.
I just think this analysis is wrong from the start. The "proper" pricing structure, the one tracking the actual costs involved, would be that you don't get to talk to a human being at all unless you pay for their time. Human frictions are what allow no-charge customer support to exist.
Right.
You'll just end up paying the 15-20% cut to the people who train the model and keep it updated and run the agents that you rent from them.
Yes, this is what Tock is for. It's not clear to me that it's a bad thing. It replaces the old $20 in a handshake I used to do with the maitre d at the front of the restaurant. Democratizes opportunity and improves transparency
When every financial transaction I make in part goes to a layer at the top that exists solely because they leveraged some digit in a balance book it is techno feudalism with an owning class being paid because they are the owning class, only instead of the baron always getting his cut it's invisible someones with even less accountability than the local feudal baron had.
https://hannahritchie.substack.com/p/ai-footprint-august-202...
Congress: "Hold my beer and watch this"
Creating a closed source model and charging for it is not “rent seeking”.
YouTube destroyed Hollywood's monopolization of entertainment. Anyone with a smartphone now has a shot at becoming a full-time creator. Prior to this, it was gate kept by Hollywood execs.
Smartphones destroyed Microsoft's monopolization of apps.
Not a leap to believe this will happen to some extent with AI (and it's already happening to some degree).
Just look at the people whose success was broken by Youtube overnight. Youtube/BigTech won over Hollywood, not the people 100% beholden to Youtube. Under Hollywood people still got their residuals. Under Youtube, next day you can be cut off completely.
The barriers to entry for entertainers have never been so low.
"The Chinese open source model running on the box under my desk can pass the Turing Test. When you call, e-mail, text, or show me an ad, you’ll never know if it’s me or my model seeing it."
And the only thing they'll notice when you are replaced with that opensource model is the slight reduction in the required personnel budget going forward.
> The era of purposefully frustrating humans is over. The Chinese open source model running on the box under my desk can pass the Turing Test. When you call, e-mail, text, or show me an ad, you’ll never know if it’s me or my model seeing it.
But at some point, you're going to want to do something, like, e.g., buy something. Then you're right back to the problem in the opening quote:
> things take time, patience runs out, brand familiarity substitutes for diligence, and most people are willing to accept a bad price to avoid more clicks.
& we're already seeing AI used to do this. E.g., Amazon listings where product photos are AI generated. (… not that many product photos weren't "bad photoshop of product onto hot sexy model who is obviously not using our product" before … but now it's AI!) Whereas before someone would have had to spend a modicum of time badly using Photoshop, now AI can just churn out the same fraudulent result in a fraction of the time.
Now, if I have a problem with a product, instead of just calling a number, browsing a phone tree, getting put on hold, and finally having to struggle to get some human to understand the basic logistics of "I paid for X, I did not get X, I demand X or refund", I get to do all that but with the extra step of "forced engagement with an AI that is incapable of actually solving my problem". (This somehow still manages to apply even when the problem is seemingly trivial enough that I find myself thinking "… this actually should be something an AI can do" but inevitably, no, the AI is "sorry", it cannot do that.)
And besides, calls, emails, etc. are already handled without AI: I (and everyone I really care about) have either allowlisted all inbound comms, or abandoned the medium altogether. Moreover, any communications medium is useful because it is not infested with spam, and will eventually be destroyed by spam. At least until we grow laws for mediums like phone/email, maybe named things like "Do Not Call" or "CAN-SPAM" and those laws are enforced. But the GOP has no interest in enforcing any level of consumer protection, so here we are.
In an LLM arms race, corporations will win bud, sorry.
Instead of selling products companies want recurring revenue from subscription. That's rent seeking. And look how commonplace it is now
Rent is just arbitraging capital to offer fractional ownership of goods/services that are too expensive for some purchasers. I rent living space because I move often enough that buying makes no sense. I do not begrudge the owners of the properties their profit, because I don't want to have to buy/sell property every time I move.
The move to subscriptions is because technology has enabled making them easy. I'm old enough to remember when I had to choose between pirating Photoshop or spending many hundreds of dollars I didn't have (at the time, the argument was that it was overpriced so piracy was morally justified).
People whinge about subscriptions but they are an economic good. When you buy software once, the company is incentivized to focus on selling new users and totally neglecting existing users because they've already made every dollar they ever will from those users. Subscriptions align incentives.
People don't like it because there is less consumer surplus; if a product is worth $20/mo I'll pay $20/mo, $240/year, $2400/10 years. If it's not worth it, I won't pay it. But as long as I am paying I have both a right and leverage to ask for improvements.
I know it's against the HN dogma, but this is actually a really good thing for tech.
It's going to be your bots vs theirs. Theirs will have more resources. Net result? probably fewer jobs and wealthier companies yet again.
"The American market has not been free" because companies use call centers and friction to retain customers? That is the free market. No regulator forced Comcast to have bad hold music. They did it because it's profitable and because switching costs are real economic phenomena, not government distortion. Rent-seeking has a specific meaning in economics: capturing value through regulatory manipulation, not through being annoying to cancel. What's described here is just transaction costs. Coase wrote about this in 1937. The complaint is literally "firms optimize against consumers in an unregulated environment," which is the free market working exactly as designed.
AI as "the great equalizer." Equalizing what? AI agents that negotiate on your behalf get countered by AI agents that negotiate against you. The asymmetry doesn't vanish, it escalates. The company still has more compute budget, more training data on customer behavior, and more incentive to invest in adversarial optimization than you do. You get a chatbot. They get an enterprise deployment tuned on millions of interactions. The gap widens.
China "wants AI as a public utility" is doing enormous work with zero evidence. China wants semiconductor independence and geopolitical leverage. Qwen is open-weight because Alibaba wants cloud customers, not because the CCP is running a charity. Commoditizing the model layer serves Chinese hardware and cloud interests exactly the way the post itself explains ("commoditize your complement") then inexplicably frames as altruism.
The punchline the post avoids: every historical example of "friction removal" at scale (Uber, Airbnb, Amazon) concentrated wealth upward, not downward. The middlemen died, the platform owners became billionaires, and consumers got cheaper goods produced by worse labor conditions. No mechanism is proposed here that changes that outcome. "An AI on a box under my desk" doesn't redistribute anything. It just means the rent extraction happens at a layer you can't see yet.
Rooting for the collapse of the US economy as a feature rather than a bug is a take that only lands if you already have enough money to survive one.
Anyway, I remember that Google demo of making restaurant reservations. I believe it was scripted and had a human fallback. Little did we know that Google would drop the bag on the whole transformer thing that came out soon after. I wouldn't be surprised if it was some of the same people involved.
What the author is talking about isn't rent-seeking per se but a moat. The entire proposition of OpenAI is that they can build a moat and recoup the billions of investment. I'm not convinced that's true, which is part of the author's point, for some of the same reasons:
1. Cost of hardware and training and tokens keeps going down. We saw the same thing with Bitcoin mining. I wonder if we'll see ASICs enter the fray here too; and
2. China will make sure no one company owns this future. DeepSeek was a shot across the bow of OpenAI, Google and Anthropic. It is a national security issue for China.
Where I disagree is that this will be an end for the rent-seeking class. I think we're bouldering towards a dystopian future of even more wealth concentration where most people get displaced by automation and AI, which suppresses wages and ultimately leads to a situation where a handful of people have all the money and almost everyone else has no money.
[1]: https://en.wikipedia.org/wiki/Inclosure_act
[2]: https://medium.com/@jrcoleman97/the-hidden-origins-of-capita...
It's being used in a more literal-meanings-of-the-words sense ("pursuing monopoly rents") rather than the narrow economic term-of-art sense of "pursuing monopoly rents through influence over public policy by means that do not create, or which inhibit the creation of, additional wealth" (the definition you seem to be complaining about it not adhering to without actually providing.)
But most of the usages would also be correct in the narrower sense, because virtually ever actor referred to as rent-seeking in the broader sense are also rent-seeking in the narrow sense as part of that. (E.g., actively lobbying for "safety" regulation which would disproportionately impair non-incumbent new competitors.)
> What the author is talking about isn't rent-seeking per se but a moat.
Pursuing a moat is just another term for seeking monopoly rents by any means, including rent-seeking in the narrow sense.
(There's also obviously an ideological angle in creating the term "rent seeking" as a term of criticism to those seeking monopoly rents through means that the creators of the term disapprove of, excluding seeking the same kind of rents by other means from "rent seeking".)
Rent-seeking is fundamentally intermediation like a health insurer putting themselves between a patient and a healthcare provider or privatizing grazing lands or controlling water supplies from snowmelt (like the Resnicks) or privatizing trains in the UK.
Microsoft has a compeitive advantage with Windows, Google with its search engine and the ad business that funds it, Amazon with AWS or NVidia with GPUs. There are alternatives to all of these things but these companies maintain dominance with a combination of scale, cost, technology and network effects. That's not rent-seeking in a broad or narrow sense.
Rent-seeking would be Microsoft lobbying lawmakers to require schools and governments to purchase Windows, for example.
No, a moat is a barrier to people closing the gap of an existing competitive advantage. The barrier is literally the point of the metaphor. If there is no barrier, there is no moat, just a transitory advantage; that's the whole basis of the famous "we have no moat and neither does OpenAI" memo at Google; its not that the big established players had (at that time, or now) no current competitive advantage over open source competition, its that there was no structual barrier preserving it.
> Rent-seeking is fundamentally intermediation
No, rent-seeking is using influence over public policy as a means to extracting monopoly rents. State policy favoring intermediation is one manner of rent seeking, yes.
> Rent-seeking would be Microsoft lobbying lawmakers to require schools and governments to purchase Windows, for example.
That is an example, but lobbying for specific mandates for purchases from the specific firm is a fairly extreme case of rent-seeking, not the general case; a more common for of rent-seeking is firms in a narrow group of leading incumbents lobbying for various standards (either for public market access or government contracts) to be set for the industry that are not a particular burden for existing large firms to meet but which create additional friction for new competitors. In the specific case of software, this can include lobbying for rules that specifically treat open source solutions as suspect and dangerous, as well.
A moat can very much be transitory and caused by natural (or at least, not specifically intended) factors. Perhaps we could then call it something different, like a river as opposed to a moat, but the strategic effect is the same either way so it makes sense to use the established term for it.
A free market that is "properly priced" is a not a real state of existence.
Resource and information asymmetry, and the exploitation by the those with resource and information privilege of those without it has been present from the very beginning. A free market is just a tool (among many) to achieve a goal for a society.
For some, that goal is explicitly the concentration of wealth and welfare in very few hands. This is oligarchy.
For others, it's the advantaging the welfare and dignity of their "tribe" at the cost of welfare and dignity to perceived outsiders.
And for yet others, it is the advancement of universal welfare and dignity.
Neither a free market nor socialism gets you any of these. What gets you there are the shared narratives that utilize tools like free markets, regulation, and redistribution.
this will continue forever and no rugs, chinese or otherwise, will ever be pulled
we know that because the label on the rug says "open source"
Insane take for a bunch of reasons, the destruction of the US economy would necessarily entail the destruction of the world economy. Hopefully I don't have to explain why that would be bad. Furthermore, a ton of the "rent seeking" Citrini Research was discussing isn't traditional rent seeking but the cognitive services previously necessary. Software engineering, for instance, falls into that bucket.
> Enter AI, the great equalizer of time.
I didn't read any futher: this article is dumb. If a company has the capability to hire literal people to waste your time, they can deploy more AI than you to waste the time of your AI.
Or they just use price to limit access instead of time. Which means you're totally SOL if you have time but no money. Pay to win, that game everyone loves /s!
AI doesn't flatten asymmetries, it exacerbates them.
I don't totally buy OP's argument, but I think you're dismissing it unfairly.
His point is that in the pre-LLM world, if a company wants to waste your time, they can hire a call center employee overseas for US$4/hr and make you wait for an hour to talk to them for 30 minutes. If you value your time at $80/hr, then the 90-minute call cost you $120, but it only cost the company about $2, thus the asymmetry.
OP's claim is that now, the asymmetry is gone. If both you and the company try to use AI, the company has less leverage to impose costs on you. They can deploy more AI to waste more of your time, but that means the asymmetry now is in the customer's favor because it costs the company more than the customer to get support.
Also, remember that the company is still constrained by having to support real humans who don't have their own AI. They can't just decide not to offer any support at all or or force infinite wait times, or they'd be doing that today.
2. Anthropic does not care about what models and hardware he is running under his desk.
3. When you look behind the cupboard—Anthropic is "rent seeking" on a level well above consumers.
4. I've got "AI safety" + "Capitalism" + "Military-industrial complex" bound together on my mental corkboard.
This is an oxymoron.
Giving functionally illiterate people computers with GUIs should be regarded as a mistake.
All of those routines were reprogrammed originally in a flavor of BASIC and it soon became obvious that ASCII log displays from digitized published materials were marginally useful as interpretation tools. Tabular data was far too dense. We needed pictures. Therefore we chased graphical methods of displaying data leading us to C and then C++ for the graphical routines that made it easy to display all of the data from an oil well log and to scroll the logs while zooming in and out.
We started all that in some flavor of DOS and as time went by and everyone dumped their latest OS incarnation, we moved thru MS-DOS, PC-DOS, DR-DOS, etc until MS finally got with the GUI environment plan like Apple's Mac and produced a near worthless GUI called Win386 and later Win95. For a time it was fun.
Linux, the old new kid on the block, still works great from the command line too. The GUI exists to streamline some of the things that are more easily digested in graphical formats. It has nothing to do with anyone's intelligence or ability to pick up skills they don't have today.