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Comment by cynicalpeace | Hacker News Reader

It's possible that "smarter" AI won't lead to more productivity in the economy. Why?

Because software and "information technology" generally didn't increase productivity over the past 30 years.

This has been long known as Solow's productivity paradox. There's lots of theories as to why this is observed, one of them being "mismeasurement" of productivity data.

But my favorite theory is that information technology is mostly entertainment, and rather than making you more productive, it distracts you and makes you more lazy.

AI's main application has been information space so far. If that continues, I doubt you will get more productivity from it.

If you give AI a body... well, maybe that changes.

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Its quite possible the use of LLMs means that we are using less effort to produce the same output. This seems good.

But the less effort exertion also conditions you to be weaker, and less able to connect deeply with the brain to grind as hard as once did. This is bad.

Which effect dominates? Difficult to say.

Of course this is absolutely possible. Ultimately there was a time where physical exertion was a thing and nobody was over-weight. That isn't the case anymore is it.

25 years of shipping software, and IT absolutely increased productivity - just not for everyone, not everywhere. Some workflows got 10x faster, others got slower from meetings about the new tools.

AI feels the same. I'm shipping indie apps solo now that would have needed a small team five years ago. But in bigger orgs I see people spending 20 minutes verifying 15-minute AI output that used to be a 30-minute task they'd just do. Depends where you sit.

> "information technology" generally didn't increase productivity

Do you think it'd be viable to run most businesses on pen and paper? I'll give you email and being able to consume informational websites - rest is pen and paper.

Productivity metrics were better when businesses were run on just pen and paper. Of course, there could be many confounding factors, but there are also many reasons why this could be so. Just a few hypotheses:

- Pen and paper become a limiting factor on bureaucratic BS

- Pen and paper are less distracting

- Pen and paper require more creative output from the user, as opposed to screens which are mostly consumptive

etc etc

> Productivity metrics were better when businesses were run on just pen and paper

What metrics are these?

Productivity growth. If you take rolling averages from this chart, it clearly demonstrate higher productivity growth before the adoption of software. This is a well established fact in econ circles.

https://fred.stlouisfed.org/graph/?g=1V79f

I think this is a classic case of reading into specific arguments too deeply without understanding what they really mean in the grand picture. Few points to easily disprove this argument

- if it were true that software paradoxically reduces productivity, you can just start a competing company that doesn't use software. Obviously this is ridiculous - top 20 companies by market cap are mostly Software based. Every other non IT company is heavily invested in software

- if you might say the problem is it at the country level, it is obvious that every country that has digitised has had higher productivity and GDP growth. Take Italy vs USA for instance.

- if you are saying that the problem is even more global, take the whole world - the GDP per is still pretty high since the IT revolution (and so have other metrics)

If you still think there's something more to it, you are probably deep in some conspiracy rabbit hole

Is there a way to mute people who are clearly AI boosters? ^

? you are literally commenting on the release of a new model from OpenAI in a tech focused community. Have you considered what should be normal here?

The data clearly shows that productivity growth is flat or even declining. What is your accounting of why software hasn't offset those numbers?

You don't have a counterfactual to suggest that it would have continued increasing had it not been for technology. Is there _any_ credible economist who suggests that we might have higher productivity without tech?

There is no counterfactual needed. Productivity growth has declined, despite the expectation that software would accelerate productivity. I'm asking you why this didn't happen.

There is a counterfactual needed because it is not clear whether the growth would not have declined even more without Software.

Again I'm asking - is there a single credible economist who says that the growth would have been higher without technology?

I'm not even proposing that growth would have been higher without "technology". I said information technology has not increased productivity growth compared to the past. This is an observation of fact.

> Productivity metrics were better when businesses were run on just pen and paper

This is what you said.

Again, that is a simple observation of fact. No counterfactual needed. I said it had confounding factors, and I offered hypotheses

I asked you for alternative hypotheses and you've offered none.

Of course a counterfactual is needed, absent clear separation of causes and links to effects, neither of which the productivity metrics on their own establish. This is also widely known and talked about in econ circles in the face of this very data.

Downvoted by the AI Nazis. They are running a tight ship before the IPOs.

I downvoted it because it doesn't add anything useful to the conversation, and I don't own any AI stock.

It's a hypothesis that "smarter" AI models, ie GPT-5.5, may not be a great boon to productivity. Given that this is the raison d'etre of AI models, and improving them, I don't see why it is any less useful than any other discussion.

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