4 ms·

Its not a bubble because the economy isnt actually about trade any more, its about power. The people in power now know that control over technology is the name

Its not a bubble because the economy isnt actually about trade any more, its about power. The people in power now know that control over technology is the name of the game. It doesnt have to have a return on investment, it has to enable control of public opinion and eventually, robots.

findthewords 1y ago
In the 1900s we called "control over technology" something else, I believe it was "seizing the means of production".
- nonethewiser 1y ago
  There is a big difference between nationalizing industry and regulating it.
zaik 1y ago
What if the power gained by AI models is less than expected?
- __MatrixMan__ 1y ago
  Then we might have to solve our education problems after all.
  - kerabatsos 1y ago
    Ha! I wouldn’t count on it.
    - __MatrixMan__ 1y ago
      Why not? If you're trying to compete with some country who can do things that you can't and there's nobody to be found who knows how to do the thing, isn't teaching your people the obvious thing to do? The cost of not doing so will be cumulative, so sooner or later the ROI will be there. It's just a matter of how bad things need to get first. That is, unless there's something else we've got going for us that we can fall back on, but I'm not sure what that thing might be--we've been busy dismantling contenders for the job lately.
- re-thc 1y ago
  Means not enough GPUs. Keep making them!
- koolala 1y ago
  What is mightier than the pen? They have guns too.
  - deleted 1y ago
    [deleted]
thenaturalist 1y ago
[flagged]
softwaredoug 1y ago
This would be true if the bubble pops and the gov't spend money propping up OpenAI or something. But those big companies going out of business won't be how the bubble pops. It'll be the 95% of projects / startups that don't have any ROI.
- rhetocj23 1y ago
  Assuming chatgpt is an input to those projects - how are those projects going to see ROI given that OAIs focus now is to be profitable through its own ventures? OAI all over the place and doesnt seem to have a direct thing its focused on executing, which only makes the idea of a bubble more real.
ajross 1y ago
Let's just say this point needs further exposition. Your argument appears to be that the stock market won't drop because stocks are held by members of the public whose opinions are controlled by technology? Or... that robots are holding the stock? It doesn't have the rhetorical punch, but my boring traditional economics opinion is that it's probably a bubble because realized profit from these overvalued stocks is too far out in the future to buffer the inevitable liquidity shocks inherent in modern economies. Eventually someone will come up short and have to dump, and we'll get a feedback loop. But admittedly robots are more fun.
- willyxdjazz 1y ago
  Hhajja
- re-thc 1y ago
  > it's probably a bubble because realized profit from these overvalued stocks is too far out in the future to buffer the inevitable liquidity shocks inherent in modern economies You just need to save the bubble with an even bigger bubble.
a_red_horse 1y ago
How can I exit this society? Preferably without a shotgun, but man the way things are looking…
rich_sasha 1y ago
Something like 70-80%+ of US stock market ownership is institutional, which ultimately means overwhelmingly pension and insurance funds. I'd imagine much of the rest is individual investors' pension savings. Bubbles can grow fine so long as no one wants their money back. But eventually they will, and then valuations will be real. When all these boomers draw their savings and buy themselves annuities, what's going to happen? One pet theory of mine is that the US market goes up so much because of it's population growth. DM in Europe for example don't see this net inflow of people saving for retirement, instead the pressure is rather pensioners pulling money out. Eventually though even the US stock market will have a reality check, and who knows what happens then.
- KoolKat23 1y ago
  This is a good point and perhaps is driving the point further. With demographic decline, there's less and less folk able to actually generate value for the pensioners, perhaps it's a sign go all in on AI. If it doesn't work out we were screwed regardless.
flatline 1y ago
The narrative around AI taking all the jobs, causing layoffs, etc. is certainly about power. The stock prices are about sentiment. When that sentiment evaporates because AI cannot in fact replace the workforce, the stock prices will fall, maybe precipitously. Ironically, if AI fulfills its promise, I suspect the same will happen due to a lack of confidence in the consumer economy from mass unemployment. This bubble will pop either way, but it could continue like this for years.
ath3nd 1y ago
[dead]
nonethewiser 1y ago
OK Foucault
- bgwalter 1y ago
  Would have worked in 2022. Now all oligarchs swore loyalty to Trump, the Ellison family is buying CBS and TikTok, LLMs are audited for compliance. Even here Trump criticism is rare now, because everyone feels being watched. If the Tesla Optimus will actually work (big if), you will be able to send that to beat down protests in Portland instead of the National Guard.
simianwords 1y ago
this is not a convincing argument. anything that is useful also grants you power. AI is useful primarily (which is why investments are poured into it) and then it grants power thereby. it is just simpler to claim that AI is useful hence the investment instead of a roundabout explanation with power.
tigerBL00D 1y ago
It's still a bubble if it happens that investors' expectations are unreasonably inflated. Most expect return on their invested capital.
tomrod 1y ago
Then it isn't the economy, since the economy is how people allocate scarce resources -- that is and always will be normalizable by the time a person has in a day. Abstract AI utilization of data centers don't impact my garden directly, so at least in partial equilibria I can ignore what David Brin in Existence calls the Message Flood, or otherwise known as the Fermi-Paradox Arms Race. In Existence, Brin explores a speculative solution to the Fermi Paradox — the question of why we see no signs of extraterrestrial intelligence. The novel suggests that advanced civilizations create memetic or AI-based “message entities” — self-replicating digital ambassadors designed to spread across the galaxy to preserve their creators’ legacy or recruit new species. This notion applies to other activities -- but basically, when a society puts all its resources to something other than its preservation then it expires in short order.
- lumost 1y ago
  At the time of Adam Smith’s wealth of nations, there was a schism between eastern and Western Europe on the role of politics in the economy. Eastern Europe was influenced by much stronger aristocracies that exercised stronger control of the populace and thus lacked the small business competition that inspired smith. While many “small” businesses offering similar products compete on a marketplace subject to the law of supply and demand, large centralized monopolies compete for money producing “slots” often allocated through a political process. The political figures in control of these systems are often free from material needs and thus less motivated by profit. At the extreme of political economy, money ceases to matter in the internal sense. A state can simply order workers to work without pay or be punished, burn debt that they don’t want to pay, or lock traders into a room with orders to buy. There is still an economy, but it becomes one of political favor which is earned through multiple mechanisms.
  - tomrod 1y ago
    > A state can simply order workers to work without pay or be punished, burn debt that they don’t want to pay, or lock traders into a room with orders to buy. There is still an economy, but it becomes one of political favor which is earned through multiple mechanisms. Without irony, this is my observation for how corporations work internally. The currency between teams is backscratching. The USSR was a big corporation with a license of coercive force.
KoolKat23 1y ago
Someone has to pay interest on that debt still however.

findthewords 1y ago

In the 1900s we called "control over technology" something else, I believe it was "seizing the means of production".

nonethewiser 1y ago
There is a big difference between nationalizing industry and regulating it.

zaik 1y ago

What if the power gained by AI models is less than expected?

__MatrixMan__ 1y ago
Then we might have to solve our education problems after all.
- kerabatsos 1y ago
  Ha! I wouldn’t count on it.
  - __MatrixMan__ 1y ago
    Why not? If you're trying to compete with some country who can do things that you can't and there's nobody to be found who knows how to do the thing, isn't teaching your people the obvious thing to do? The cost of not doing so will be cumulative, so sooner or later the ROI will be there. It's just a matter of how bad things need to get first. That is, unless there's something else we've got going for us that we can fall back on, but I'm not sure what that thing might be--we've been busy dismantling contenders for the job lately.
re-thc 1y ago
Means not enough GPUs. Keep making them!
koolala 1y ago
What is mightier than the pen? They have guns too.
- deleted 1y ago
  [deleted]

thenaturalist 1y ago

[flagged]

softwaredoug 1y ago

This would be true if the bubble pops and the gov't spend money propping up OpenAI or something. But those big companies going out of business won't be how the bubble pops. It'll be the 95% of projects / startups that don't have any ROI.

rhetocj23 1y ago
Assuming chatgpt is an input to those projects - how are those projects going to see ROI given that OAIs focus now is to be profitable through its own ventures? OAI all over the place and doesnt seem to have a direct thing its focused on executing, which only makes the idea of a bubble more real.

ajross 1y ago

Let's just say this point needs further exposition. Your argument appears to be that the stock market won't drop because stocks are held by members of the public whose opinions are controlled by technology? Or... that robots are holding the stock? It doesn't have the rhetorical punch, but my boring traditional economics opinion is that it's probably a bubble because realized profit from these overvalued stocks is too far out in the future to buffer the inevitable liquidity shocks inherent in modern economies. Eventually someone will come up short and have to dump, and we'll get a feedback loop. But admittedly robots are more fun.

willyxdjazz 1y ago
Hhajja
re-thc 1y ago
> it's probably a bubble because realized profit from these overvalued stocks is too far out in the future to buffer the inevitable liquidity shocks inherent in modern economies You just need to save the bubble with an even bigger bubble.

a_red_horse 1y ago

How can I exit this society? Preferably without a shotgun, but man the way things are looking…

rich_sasha 1y ago

Something like 70-80%+ of US stock market ownership is institutional, which ultimately means overwhelmingly pension and insurance funds. I'd imagine much of the rest is individual investors' pension savings. Bubbles can grow fine so long as no one wants their money back. But eventually they will, and then valuations will be real. When all these boomers draw their savings and buy themselves annuities, what's going to happen? One pet theory of mine is that the US market goes up so much because of it's population growth. DM in Europe for example don't see this net inflow of people saving for retirement, instead the pressure is rather pensioners pulling money out. Eventually though even the US stock market will have a reality check, and who knows what happens then.

KoolKat23 1y ago
This is a good point and perhaps is driving the point further. With demographic decline, there's less and less folk able to actually generate value for the pensioners, perhaps it's a sign go all in on AI. If it doesn't work out we were screwed regardless.

flatline 1y ago

The narrative around AI taking all the jobs, causing layoffs, etc. is certainly about power. The stock prices are about sentiment. When that sentiment evaporates because AI cannot in fact replace the workforce, the stock prices will fall, maybe precipitously. Ironically, if AI fulfills its promise, I suspect the same will happen due to a lack of confidence in the consumer economy from mass unemployment. This bubble will pop either way, but it could continue like this for years.

ath3nd 1y ago

[dead]

nonethewiser 1y ago

OK Foucault

bgwalter 1y ago
Would have worked in 2022. Now all oligarchs swore loyalty to Trump, the Ellison family is buying CBS and TikTok, LLMs are audited for compliance. Even here Trump criticism is rare now, because everyone feels being watched. If the Tesla Optimus will actually work (big if), you will be able to send that to beat down protests in Portland instead of the National Guard.

simianwords 1y ago

this is not a convincing argument. anything that is useful also grants you power. AI is useful primarily (which is why investments are poured into it) and then it grants power thereby. it is just simpler to claim that AI is useful hence the investment instead of a roundabout explanation with power.

tigerBL00D 1y ago

It's still a bubble if it happens that investors' expectations are unreasonably inflated. Most expect return on their invested capital.

tomrod 1y ago

Then it isn't the economy, since the economy is how people allocate scarce resources -- that is and always will be normalizable by the time a person has in a day. Abstract AI utilization of data centers don't impact my garden directly, so at least in partial equilibria I can ignore what David Brin in Existence calls the Message Flood, or otherwise known as the Fermi-Paradox Arms Race. In Existence, Brin explores a speculative solution to the Fermi Paradox — the question of why we see no signs of extraterrestrial intelligence. The novel suggests that advanced civilizations create memetic or AI-based “message entities” — self-replicating digital ambassadors designed to spread across the galaxy to preserve their creators’ legacy or recruit new species. This notion applies to other activities -- but basically, when a society puts all its resources to something other than its preservation then it expires in short order.

lumost 1y ago
At the time of Adam Smith’s wealth of nations, there was a schism between eastern and Western Europe on the role of politics in the economy. Eastern Europe was influenced by much stronger aristocracies that exercised stronger control of the populace and thus lacked the small business competition that inspired smith. While many “small” businesses offering similar products compete on a marketplace subject to the law of supply and demand, large centralized monopolies compete for money producing “slots” often allocated through a political process. The political figures in control of these systems are often free from material needs and thus less motivated by profit. At the extreme of political economy, money ceases to matter in the internal sense. A state can simply order workers to work without pay or be punished, burn debt that they don’t want to pay, or lock traders into a room with orders to buy. There is still an economy, but it becomes one of political favor which is earned through multiple mechanisms.
- tomrod 1y ago
  > A state can simply order workers to work without pay or be punished, burn debt that they don’t want to pay, or lock traders into a room with orders to buy. There is still an economy, but it becomes one of political favor which is earned through multiple mechanisms. Without irony, this is my observation for how corporations work internally. The currency between teams is backscratching. The USSR was a big corporation with a license of coercive force.

KoolKat23 1y ago

Someone has to pay interest on that debt still however.