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Increased efficiency leads to more demand, not less. This is known as the Jevons paradox in economics (see: https://en.m.wikipedia.org/wiki/Jevons_paradox https

Increased efficiency leads to more demand, not less. This is known as the Jevons paradox in economics (see: https://en.m.wikipedia.org/wiki/Jevons_paradox https://en.m.wikipedia.org/wiki/Jevons_paradox). The historical precedent would be for increased productivity to lead to more software being developed, not the same amount but by fewer developers.

HervalFreire 4y ago
Except how did the company go bankrupt then? This paradox only occurs if every resource is abundant. We tend to see it a lot (especially in the last decade) because of the easy money policies by the Fed in the last decade or so. Following your example, if we have unlimited money and gas prices are cheap, we buy more gas. But with limited money, when gas gets cheaper, we don't buy more gas, we usually allocate more money for more essentials. The scenario with a bankruptcy is largely parallel to what we're seeing recently with interest rates and the lay offs. Free money is being tightened. With limited money the paradox no longer functions. Big tech is not going to hire people to write existing software they can get on the open source world, so they let go of a bunch of people. You can literally see the two curves correlate ever since interest rates started to rise... Open source projects are going up right now while lay offs are also increasing... violating the paradox.
- joefourier 4y ago
  The Jevons paradox was noted in the 19th century when the world was far less wealthy than today. Recent American monetary policy has little relevance. There’s many more examples if you look up induced demand - a similar effect is the Downs–Thomson paradox, where adding more roads increases traffic congestion in the long term. You may see a short term improvement (the same way a struggling company that increases productivity will let go of employees) but eventually a new equilibrium is reached.
  - HervalFreire 4y ago
    But the problem is we see opposite trends as well. We see paradoxical trends and trends that are not. It just means the paradox can sometimes occur it does not mean the paradox is a general rule.

HervalFreire 4y ago

Except how did the company go bankrupt then? This paradox only occurs if every resource is abundant. We tend to see it a lot (especially in the last decade) because of the easy money policies by the Fed in the last decade or so. Following your example, if we have unlimited money and gas prices are cheap, we buy more gas. But with limited money, when gas gets cheaper, we don't buy more gas, we usually allocate more money for more essentials. The scenario with a bankruptcy is largely parallel to what we're seeing recently with interest rates and the lay offs. Free money is being tightened. With limited money the paradox no longer functions. Big tech is not going to hire people to write existing software they can get on the open source world, so they let go of a bunch of people. You can literally see the two curves correlate ever since interest rates started to rise... Open source projects are going up right now while lay offs are also increasing... violating the paradox.

joefourier 4y ago
The Jevons paradox was noted in the 19th century when the world was far less wealthy than today. Recent American monetary policy has little relevance. There’s many more examples if you look up induced demand - a similar effect is the Downs–Thomson paradox, where adding more roads increases traffic congestion in the long term. You may see a short term improvement (the same way a struggling company that increases productivity will let go of employees) but eventually a new equilibrium is reached.
- HervalFreire 4y ago
  But the problem is we see opposite trends as well. We see paradoxical trends and trends that are not. It just means the paradox can sometimes occur it does not mean the paradox is a general rule.