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Do Markets Believe in Transformative AI?
- akomtu 9mo agoIt tells a lot about our society that the only way to apply capital is to build a slop machine that will make us redundant.
- thrance 9mo agoNothing new here, that's basically what the luddites complained about: the machines that replaced them output worse quality garments and sent them all to the streets. It only benefitted the owners. Capital will always seek to rid itself of its dependence on labor, until it eventually succeeds...
- delichon 9mo ago> It only benefitted the owners. And the buyers. As a ballpark estimate, it would take around 50 hours of human labor to produce a shirt by hand, fabric plus sewing, versus about an hour of human labor by industrial machines. That lowers the cost greatly, which most consumers demonstrably value over custom tailoring.
- thrance 9mo agoAt the time, the quality of machine-made clothes was noticeably worse than human-made. It's debatable wether the "consumers" (the term certainly wasn't used at the time) won in the end. Terry Pratchett's "Boots theory" feels relevant here: > Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles. > But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that'd still be keeping his feet dry in ten years' time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet.
- delichon 9mo ago> It's debatable whether the "consumers" won in the end. If "in the end" is now, it's pretty clear that automation has made clothing both better and cheaper. And paying $10 now for shoes of less than 1/5th value of $50 shoes much later, or not at all, can be entirely rational. Most of us make that kind of compromise frequently.
- thrance 9mo agoIs it really better if it's made by slaves in the Global South, from a mix of plastics and crops grown in an unsustainable way, then shipped across the globe, and made to last about seven washing cycles before being disposed? Debatable, as I said.
- SpicyLemonZest 9mo agoI just don't think that this is an accurate description of modern clothing. Cotton is not typically grown in unsustainable ways, and cheap 100% cotton clothing that will last for years is widely available at a variety of retailers. But a lot of people don't want that. They want comfortable stretchy clothing, accepting or not realizing the inherent tradeoff with durability. Or they want thinner, lighter styles at the very edge of what a 50/50 polyester blend can hold together.
- JohnFen 9mo ago> automation has made clothing both better and cheaper. Cheaper, yes. Better, most definitely not. We have traded quality for price.
- stoneforger 9mo agoIt's a cult, these people really just want to believe everything is better because of unhinged capitalism, not despite it.
- delichon 9mo agoI just bought a new shirt on eBay for $22, including shipping. If that shirt had taken 50x as much labor to produce, what would it have cost? Is it unhinged capitalism to prefer the cheap shirt?
- smartguyalert 9mo ago[dead]
- mono442 9mo agoI don't believe it'll work for anything that doesn't have a tight feedback loop. So while it can replace a lot of software engineers, it doesn't seem plausible to me that it would make a significant difference in other engineering industries.
- MarkusQ 9mo agoThe markets and I agree then. I'm a firm believer in technological progress, but not so fond of group-think hype trains. The LLM/diffusion breakthrough(s) are huge, but they aren't what their rabid fans/neurotic critics are thinking.
- smartguyalert 9mo ago[dead]
- tim333 9mo agoI'm not clear how the bond markets should behave if they say expect agi in five years. Do long bonds go up or down? Thinking about it long bond should mostly reflect the rate of inflation which depends much more on monetary policy than tech. Like after WW1, Germany and the US had much the same tech but Germany had hyperinflation and the US very little because Germany printed a lot of money and the US was on the gold standard. The equity markets seem quite keen on NVDA stock though.
- hedora 9mo agoI wonder how they react to expected inflation, and how to build that in. Official numbers say inflation has been 3% since Trump got in office in 2025. We’re seeing > 30% across the board on our bills, and GDP “growth” statistics imply inflation well above 3% (e.g., last quarter growth in the US was entirely due to increased health care spending).
- sdf2erf 9mo agoNominal Risk free rate includes expected inflation. Default spread reflects... well the likelihood of default. Cost of debt = rf rate + default spread
- digitalPhonix 9mo agoBetteridge's law done right! Answer then explanation