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> Won't super power AI tools allow companies to do more with the same number of people? Don't you think a smarter way to run a business is to capture more of th

by dleslie 4mo ago

> Won't super power AI tools allow companies to do more with the same number of people? Don't you think a smarter way to run a business is to capture more of the market if you have the resources to do so? It is possible to have excess productivity. AI allows an existing labour pool to rapidly surpass necessary productivity levels for the existing demand. IE, let's say I live in a small town and I open a machine shop. Should I hire every mechanic that walks in the door, forever? No, absolutely not; there is an optimal number of mechanics to hire for the demand for services. If somehow a tool comes to exist that doubles the productivity of mechanics then laying off half the mechanics is next.

Jblx2 4mo ago
Machinists work at a machine shop.
zozbot234 4mo ago
> It is possible to have excess productivity. The most productive places in the world are also those with the highest incomes and wealth generation. "Excess productivity" is either temporary or a sector-specific phenomenon, it doesn't apply to society as a whole.
- dleslie 4mo ago
  This is true; and in time it's entirely possible that AI makes us an overall wealthier and more productive society. However, from the article: > “Most economists will acknowledge that technological progress can cause some adjustment problems in the short run. What is rarely noted is that the short run can be a lifetime.” The redundant professionals will need to find other ways of generating wealth from their productivity, and that may not be possible in a reasonable amount of time. Not in the scope of their remaining lifetime.
  - zozbot234 4mo ago
    We will most likely redefine what we mean by human "productivity". A plumber might be considered a highly productive worker, whereas many intellectual professions will partially refocus on effectively prompting AI and assessing/revising its output.
    - kelnos 4mo ago
      Sure, but that redefinition, retraining, and reallocation process could take a lifetime. Sucks to be the people who are unable to adapt in that time.
- ThrowawayR2 4mo ago
  Temporary excess productivity can linger a very long time and sector-specific excess productivity can still be broadly damaging. Detroit and southeastern Michigan were devastated by the collapse of American automotive industry in the '00s, taking something like 10-15 years before starting to recover.
  - hunterpayne 4mo ago
    That collapse happened in the late 1970s. And many would debate if its recovered to this day.
    - ThrowawayR2 4mo ago
      Michigan was doing okay until around the late 1990s. The real downslide started out after that; Detroit became the largest municipal bankruptcy in U.S. history in 2013.
vondur 4mo ago
>It is possible to have excess productivity? Isn't this what happened with the tech hiring during Covid? And also many of the big tech companies were hiring people just to make sure their competitors didn't have them?
alex_young 4mo ago
The small town constraint is a bit artificial to this problem isn't it? If you operate a machine shop in a large urban area, have competitors, and access to much improved low cost tooling, would you: a) lay off a bunch of workers, or b) lower your prices and capture more orders? Same thing with accounting firms or marketers or business consultants.
- convolvatron 4mo ago
  the number of functioning machine shop in the US in large urban areas has been plummeting for decades. where there were 50 there are now 3. the customers for machine shops are large production facilities with a need for custom parts. they're all gone. now its little bits of rnd work and some custom architectural design kind of stuff. and the margins are punishing. ok, so machine shops aren't really central to the argument, but the collapse of demand is.
  - fragmede 4mo ago
    Kinda. What's the lead time on my high precision metal part that needs to be cut on a 6-axis lathe? Or a metal 3d print? Neither of those machines are cheap, so not only is lead time astronomical, profit on them is also pretty great for the machine shop, which implies there's room for more machine shops. There's a lot of red tape for the orders I see, (CMMI etc) so maybe AI will help machine shops get that and be competitive.
    - convolvatron 4mo ago
      that last point doesn't really follow. yes, you can do you ok if you have the kind of expertise to actually make that high end part and the position in the market to get the kind of work, but I think you overstate the margins and its certainly not the 'are you going to drop people or just increase your volume' argument that gp was making.
      - fragmede 4mo ago
        Well yeah, I'm not gp. My point is that, sure, machine shop count has gone down, but machine shop capacity, with conditions, currently has a 16 week lead time and high prices. If the argument is "there is enough machine shop output that everyone is going to get fired after the robots come" I'm saying there's a long way to go. And the same argument for writing software applies to machine shops. There's more to programming than writing code itself. There's room to grow upwards and meet the customer more where they're at so the machine shop isn't an extension of a robot that does cut x at point y and bends at z, but with the design process of the part before it gets to that.
T-RN-R 4mo ago
You can aim to expand your addressable markets. A small town is a small market. Open a second location in a nearby town. Lower profit margins to undercut competition.
MVQ93 4mo ago
That's not what productivity means. You're thinking about output capacity

by dleslie 4mo ago

Jblx2 4mo ago

Machinists work at a machine shop.

zozbot234 4mo ago

> It is possible to have excess productivity. The most productive places in the world are also those with the highest incomes and wealth generation. "Excess productivity" is either temporary or a sector-specific phenomenon, it doesn't apply to society as a whole.

dleslie 4mo ago
This is true; and in time it's entirely possible that AI makes us an overall wealthier and more productive society. However, from the article: > “Most economists will acknowledge that technological progress can cause some adjustment problems in the short run. What is rarely noted is that the short run can be a lifetime.” The redundant professionals will need to find other ways of generating wealth from their productivity, and that may not be possible in a reasonable amount of time. Not in the scope of their remaining lifetime.
- zozbot234 4mo ago
  We will most likely redefine what we mean by human "productivity". A plumber might be considered a highly productive worker, whereas many intellectual professions will partially refocus on effectively prompting AI and assessing/revising its output.
  - kelnos 4mo ago
    Sure, but that redefinition, retraining, and reallocation process could take a lifetime. Sucks to be the people who are unable to adapt in that time.
ThrowawayR2 4mo ago
Temporary excess productivity can linger a very long time and sector-specific excess productivity can still be broadly damaging. Detroit and southeastern Michigan were devastated by the collapse of American automotive industry in the '00s, taking something like 10-15 years before starting to recover.
- hunterpayne 4mo ago
  That collapse happened in the late 1970s. And many would debate if its recovered to this day.
  - ThrowawayR2 4mo ago
    Michigan was doing okay until around the late 1990s. The real downslide started out after that; Detroit became the largest municipal bankruptcy in U.S. history in 2013.

vondur 4mo ago

>It is possible to have excess productivity? Isn't this what happened with the tech hiring during Covid? And also many of the big tech companies were hiring people just to make sure their competitors didn't have them?

alex_young 4mo ago

The small town constraint is a bit artificial to this problem isn't it? If you operate a machine shop in a large urban area, have competitors, and access to much improved low cost tooling, would you: a) lay off a bunch of workers, or b) lower your prices and capture more orders? Same thing with accounting firms or marketers or business consultants.

convolvatron 4mo ago
the number of functioning machine shop in the US in large urban areas has been plummeting for decades. where there were 50 there are now 3. the customers for machine shops are large production facilities with a need for custom parts. they're all gone. now its little bits of rnd work and some custom architectural design kind of stuff. and the margins are punishing. ok, so machine shops aren't really central to the argument, but the collapse of demand is.
- fragmede 4mo ago
  Kinda. What's the lead time on my high precision metal part that needs to be cut on a 6-axis lathe? Or a metal 3d print? Neither of those machines are cheap, so not only is lead time astronomical, profit on them is also pretty great for the machine shop, which implies there's room for more machine shops. There's a lot of red tape for the orders I see, (CMMI etc) so maybe AI will help machine shops get that and be competitive.
  - convolvatron 4mo ago
    that last point doesn't really follow. yes, you can do you ok if you have the kind of expertise to actually make that high end part and the position in the market to get the kind of work, but I think you overstate the margins and its certainly not the 'are you going to drop people or just increase your volume' argument that gp was making.
    - fragmede 4mo ago
      Well yeah, I'm not gp. My point is that, sure, machine shop count has gone down, but machine shop capacity, with conditions, currently has a 16 week lead time and high prices. If the argument is "there is enough machine shop output that everyone is going to get fired after the robots come" I'm saying there's a long way to go. And the same argument for writing software applies to machine shops. There's more to programming than writing code itself. There's room to grow upwards and meet the customer more where they're at so the machine shop isn't an extension of a robot that does cut x at point y and bends at z, but with the design process of the part before it gets to that.

T-RN-R 4mo ago

You can aim to expand your addressable markets. A small town is a small market. Open a second location in a nearby town. Lower profit margins to undercut competition.

MVQ93 4mo ago

That's not what productivity means. You're thinking about output capacity