But let's start with this "If H&R Block could replace 90 percent of its seasonal employees with AI, it would see its profits skyrocket, given that labor is its biggest expense. Those profits would be reallocated elsewhere, that would increase the potential for even more economic growth, and that would in turn create better opportunities for the accountants."
=> Lol, no. It doesn't work that way. H&R block, if any, will allocate more to share buy backs, and the size of the tax filing "pie" won't increase due to AI.
Yes. Rich people tend to re-invest their money and not throw it into a Scrooge McDuck vault to swim in. The re-investing is what helps create economic growth.
Okay, but then whomever owned the share previously and accepted the profit in exchange for giving the share back now holds the profit instead. What are they going to do with it?
Or just build their 6th mansion that uses a plot of land that could fit 400 apartments, keeping the people underneath them commuting 1 hour from their 80 square meter apartment.
My claim is that H&R Block would replace all their workers for more efficient AI if it was more profitable. Then they would re-invest that money in the most productive way they can – other companies, etc. This is the same strategy as Apple, Microsoft and other companies do with large amounts of cash.
I don't claim H&R Block would be directly creating new jobs. They would try to maximize profit by investing their profits and diversifying.
See Rule 5 in https://hbr.org/2007/07/six-rules-for-effective-forecasting
Sources like Reason getting submitted & discussed as though their normal submissions is usually an incredibly silly time. I don't think the site should do it, but on Bluesky there's moderation layers, and it seriously makes me want something like that for the web at large, where we can turn on some kind of content warning as we browse. Content warning: specious/suspect sight. Content warning: strong agenda.
It's a bad time that the noosphere keeps happening with so little memory. That there's not cues and contexts to be like, hey, this is Reason or Quilette: don't expect normal content here.
A few paragraphs in, the statements felt generic and lacked supporting details to the point I got that uncanny valley sense of LLM writing. It doesn’t seem like this piece adds much that hasn’t already been said.
I think it’s a little unbelievable that the right proportion of people want to, say, serve food at a restaurant. But that’s the idea.
a) No disentanglement of growth factors. Economic growth tied to expansion of consumer base is slowing for demographic reasons and more crucially, key markets in the knowledge economy are demand saturated - attention economy for example is not growing - it peaked in the pandemic and outside of policy intervention, there’s very limited growth potential.
b) Failure to spell out the transformer as machine that prints machines. The transformer extracts the rules of creation from the corpus of human created labor results and automatically produces the replication function. The technology may be in its infancy, but it will only improve.
c) Historically adjustment for new job creation has operated on a multi decade timescale, complimentary to the often massive infrastructure needs (wires, power plants, distribution infrastructure) but this technology does not have those requirements. The app stores, fiber lines, machines, API platforms all exist. Adopting products can happen in months. The loop from science to product is months (see vision transformer)
d) Do I spot trickle down economics? Are we gonna invoke this boomer level of delusional narrative for the next 20 years again despite the iron clad metrics showing it’s wishful thinking to appeal to certain ideological positions rather than grounded in any kind of reality. The gains from operational efficiency will become stock buybacks, yachts, macadamia chewing cows and vanity dildos flying to space.
Appealing to history is all fine and dandy, but one has to spell out the divergent core conditions to have a serious conversation - this article feels like faith, not well reasoned forecasting or even science fiction
A. Some parts of the economy will grow. Some will shrink. My claim is that if you believe that AI will create new efficiencies and continue to do so, then overall economic growth will increase at a faster rate than ever.
B. Predicting what architecture could lead to this growth is beyond the scope of this article. The point was to say that if we keep getting increased efficiencies we'll get increased growth.
C. Job creation accelerates. Before I was hired at OpenAI in 2020, nobody on the planet had ever been hired as a prompt engineer. Now it's a career (at least for the time being.)
D. I'm assuming maximizing profit in the most near-sighted way possible. Same as it has ever been.
Is there a specific claim or argument that you disagree with?
Would have been nice to explain how people would be employed in an AI scenario and how they would benefit from the surpluses created by it.
Change is equally hard to comprehend. Two centuries ago, 80 percent of the U.S. population worked on farms. If you told one of those farmers that in 2024 barely 1 percent of the population would work on farms, he'd have a difficult time imagining what the other 79 percent of the population would do with their time. If you then tried to explain what an average income could purchase in the way of a Netflix subscription, airplane transportation, and a car, he'd think you were insane. The same principle applies to imagining life 50 years from now."
i would love to live forever, because these changes have been beneficial, and those who lived two centuries go would've loved to trade places.
But some other people that have much less demanding jobs did think that in the future people would barely work. This has become much more true for Europe than USA although as you'll see pointed out all the time, USA salaries are higher then Europe.
I suspect Keynes was a socialist since he seems to have this idea that everybody would chip in only 15 hours a week in order to produce enough stuff for the whole of society.
> "But beyond this, we shall endeavour to spread the bread thin on the butter-to make what work there is still to be done to be as widely shared as possible. Three-hour shifts or a fifteen-hour week may put off the problem for a great while. For three hours a day is quite enough to satisfy the old Adam in most of us!" [1]
And approximately a decade later, the United States did just that. The workweek was reduced to 40 hours to make what work there was to be done as widely as possible. He didn't get the number of hours quite right, but nailed the overall premise.
WRONG:
In the AI Economy, There Will Be Zero Percent Unemployment
RIGHT:
In the AI Economy, There Will Be Zero Percent Unemployment (reason.com)
TL:DR;
(reason.com)
