9 ms·

Marx, Keynes, and AI

59 points by speckx 2mo ago

TheOtherHobbes 2mo ago
[dead]
pasquinelli 2mo ago
i'm sure it's meant in some kind of technical sense that is precisely defined in the field of economics, but this use of the word "rational" is irritating: > This demand externality traps rational firms in an automation arms race, displacing workers well beyond what is collectively optimal. you can't be trapped in a sub-optimal situation and be rational at the same time. the rational thing for these rational competitors to do would be to agree to slow their deployment of ai, because the cost savings will be more than lost to demand destruction down the line. so if they won't or can't do that, they aren't rational. on the flip side, if it is actually impossible to slow ai deployment, then the firms are rational and the situation they find themselves in isn't actually sub-optimal. it's irritating to me because i often see persuit of self-interest even to one's eventual detriment held up as "rationality", which may be true in some technical sense within the field of economics (i really couldn't say), but is certainly not true for, like, actual rationality. myopic selfishness is never rational.
- idontwantthis 2mo ago
  > you can't be trapped in a sub-optimal situation and be rational at the same time Yes you can that’s what tragedy of the commons is. Rational means you take the choice that provides the most value for yourself. Without a cartel (hard) or government regulation this situation happens all the time.
  - Kuxe 2mo ago
    Tragedy of the commons is when a shared resource is rationally used by the individual, but harms the whole. You can be trapped in sub-optimal situation because it's a local maxima; not because of tragedy of commons, which is something different. Society can be trapped in local maxima and that would be because of tragedy of commons, and individuals can be trapped in local maxima but that's distinct from tragedy of commons.
  - UpsideDownRide 2mo ago
    Yes and no. It's not a new problem for humans and it's a pretty solvable problem if social pressure and structures can be applied once it is identified. As long as the resource is to be used by a community that depends on it and not an outsider then we are able to keep ourselves mostly in line for the benefit of the group.
  - pasquinelli 2mo ago
    > Rational means you take the choice that provides the most value for yourself. provides the most value over what period of time? making every choice such that each choice, considered in isolation and unto itself, nets you the most value compared to what other choices would've gotten you at that same moment is analogous to best-first search. no one would say that best-first is the rational way to search for a path in a graph, because of all the ways it fails. so my question is, if there's one of those tragedy-of-the-commons situations that happens all the time, why do we insist on saying the participants are acting rationally when they are, metaphorically, walking into a wall forever?
- mitthrowaway2 2mo ago
  The term you are looking for is what Douglas Hofstadter called "superrationality" [https://en.wikipedia.org/wiki/Superrationality https://en.wikipedia.org/wiki/Superrationality].
- altruios 2mo ago
  > you can't be trapped in a sub-optimal situation and be rational at the same time. In order for this statement to be true, you must also have perfect knowledge: something that is unachievable in most circumstances. Getting trapped in a local-optimal solution is perfectly possible if you are blindly following stochastic decent along a gradient: as it is too with life... getting trapped like this looks like being in the situation where there is no rational action (only irrational ones) that (eventually) lead to anything other that that status quo. a local optimum is where you have to do increasingly (in proportion to the level of optimization) non-positive actions to escape (likely to another local-optimal).
  - pasquinelli 2mo ago
    > In order for this statement to be true, you must also have perfect knowledge: something that is unachievable in most circumstances. if the optimal situation requires perfect knowledge that can't be had then it's not the optimal situation, it's a fantasy. it's like saying the fastest route through a maze is a straight line from the start to the finish-- that would be true if the maze wasn't there. there are two ends to what i'm arguing but people seem to only be able to hold one in their mind at a time.
    - altruios 2mo ago
      okay: I have to generous with your diction and your intentions. I believe you are trying to say that since 'optimal algorithms for choices exist': 'local maximums can't exist'. It is very possible to have a optimal algorithm that leads to a sub-optimal (local maximum) because the problem is np hard. Both in math and in life. "It is possible to commit no mistakes and still lose. That is not a weakness. That is life" - Picard
- alnxdrawr 2mo ago
  It's rational at the individual level, irrational at the group level. The issue is you can't easily enforce cooperation without some external overarching force (e.g. regulation), especially across competing powers. Refer to nuclear arms race in general. A specific example on why not to be the only one to cooperate: Ukraine gave up nukes in order to push for group level rationality, gets walked over as an individual. Oversimplifying, but yeah that's the rough point. Meditations on Moloch is a favourite of mine on this (albeit very depressing): https://www.slatestarcodexabridged.com/Meditations-On-Moloch https://www.slatestarcodexabridged.com/Meditations-On-Moloch
  - jaggederest 2mo ago
    Something in the ballpark of a Nash equilibrium. Kinda amazing how often you run into those things, in situations like groupthink.
  - bewareofscams 2mo ago
    This linked moloch essay caters to pseudointellectuals and uses a lot of words to do one thing: absolve the evil people of any responsibility. Instead of wasting a potential reader's time, here's a way better framing: "The Earth is not dying, it is being killed, and those who are killing it have names and addresses."
    - alnxdrawr 2mo ago
      I appreciate that and even agree, but what are we to do about it? Revolt? I'll let you be the first one to start.. (hence why its depressing to me)
  - pasquinelli 2mo ago
    > It's rational at the individual level, irrational at the group level. no, it's irrational at the individual level too, because it will cause more harm than good to the individual firms. it's in the short-term that the cost savings are had; the demand destruction is long-term and outweighs the cost savings. that's what the abstract says. the only issue i have is insisting on calling that rational. it's like saying eating all the seed corn is rational if you can eat most of it yourself. in the moment you're winning, so it's rational. but tomorrow everyone has none. why do we call that rational? why do we torture the word rational rather than phrase it as competitors are in some ways incapable of acting rationally?
- oulipo 2mo ago
  You can... check tragedy of the commons, and prisoners' dilemma
- deaton 2mo ago
  Remember when the buttons test was circulating a few months ago? Where if you press the red button, you survive, but if you press the blue button, unless more than 50% of people chose the blue button you die? That was a case very similar to this. It is locally optimal for everyone to choose red; your own outcome is always better or equal to what it would have been if you chose blue, however everyone independently making this optimal choice is catastrophic on a global scale. Thats why its "rational".
- deleted 2mo ago
  [deleted]
- thwarted 2mo ago
  > the rational thing for these rational competitors to do would be to agree This is the bit that is tripping you up. The market is composed of more than just the these potentially agreeing parties, so there is no case where all parties can even come together to agree. It's rational for any party to break the agreement or be stealthy and attempt to take the upper hand while the visible players are all patting themselves on the back for their self-inflicted restraint. It's rational for one party to encourage everyone to come together to agree, to distract from their own actions to undercut everyone else. On top of that, such agreement would potentially qualify as collusion, allowing an upstart to cry foul. It's all game theory.
  - pasquinelli 2mo ago
    then it isn't possible in that situation to limit ai deployment, so limiting ai deployment can't be optimal because it's impossible.
- UpsideDownRide 2mo ago
  Yeah it's a pet peev of mine as well. People define very tight space and then proclaim actions irrational if they don't make rational sense in that setting. Which wouldn't be a problem in itself if there was discussion about the defined space and if it is an actually good model. A big chunk of economics is like that, if the data doesnt fit the model then too bad for the data. Same goes for metrics used, externalities are like a side note in economy books and not an example of fundamental issues with current economic toola and modeling. And it's not limited to introductory level either. Nordhaus had most asinine assumptions in his model and he got the pseudo-Nobel. It's not pretty.
nateb2022 2mo ago
Most of the alarmist writing I see about AI displacing workers or suddenly and drastically changing the economy seem to be written by people who are pretty removed from technology or the actual businesses in which AI is allegedly replacing people. Their theses on AI are not as much a criticism of AI as much as a desire to frame capitalism itself within their own system of ethics and advocate for some form of reform; which is to say I feel that were AI as we know it to be inexistent, they would still find themselves arguing against technology in general, or more precisely against efficiency, with a presupposed socialist-adjacent premise that capitalism only incentivizes greed.
- watwut 2mo ago
  Most of the alarmist writing I see about AI displacing workers or suddenly and drastically changing the economy ... are from pro-ai boosters trying to create hype around AI. They are not criticism of ai, they are openly stated goals and aspirations.
  - nateb2022 2mo ago
    There's a lot of that type of slop on LinkedIn (with accompanying slop comments) but they're not taken anywhere as seriously as the more thoughtful blog posts like this Also in technical circles, we're pretty aware of the marketing/self-promotional nuance of the "our AI accidentally hacked X company" type of press releases, which perhaps the general public may not take with as large a grain of salt
    - watwut 2mo ago
      I dont read linkedin. I was not referencing linkedin. Among other sources, the primary one is literally AI companies themselves. And people close to them. The "it will replace workers" is pro-ai talking and selling point.
      - nateb2022 2mo ago
        I agree there, I think if we differentiate between first and second order AI companies (companies producing models vs applying those models to everyday tasks) I do think a lot of the hype comes from the 2nd order companies, since they necessarily must make a bold claim to be worthy of VC money. A lot of the 1st order companies are marketing their AI to consumers who are doing work, rather than looking to market their AI to business who are replacing those consumers. If anyone has the means to replace a worker, it's definitely OpenAI or Anthropic moreso than a 2nd order startup trying to replace the human doing the job. And on a restrospective point, I think one of the easiest jobs for AI to do right now is software engineering. But on the whole, while there certainly have been layoffs, software engineering hiring has still been mostly a net positive[0]. And that's just for formal software engineering jobs; if we define a software engineer as a human creating software, then I think AI as a tool has created a LOT more (perhaps not employed as one, but say, a realtor creating their own sofware for personal use) software engineers than the amount that it's actually replaced. In a sense, because of AI, there are more software engineers now than ever before. [0]: https://newsletter.pragmaticengineer.com/p/state-of-the-job-market-2026 https://newsletter.pragmaticengineer.com/p/state-of-the-job-...
bwhiting2356 2mo ago
U.S. unemployment rate is steady at ~4% and we are now almost 4 years after the release of ChatGPT. The Jobs Apocalypse seems to be always on the horizon. UBI is being pushed by college educated workers burnt out of white collar work (understandably), but when you suggest to them working construction, teaching school, or working in a hospital, they deflect and go quiet.
- schmidtleonard 2mo ago
  No, that's not the usual response, because people in this situation have evaluated those alternatives and will be easily able to articulate what is wrong with them (pay). Also, the 4% figure treats doordash as employment. In a parallel universe where the pay was decent, that could be reasonable. In this universe, not so much. These are boomer-tier talking points and if you bring them up to a kid stuck in this position you will get dunked on and you will deserve it. Unless you found a shy kid, in which case: congratulations on your new title as undefeated shadowboxing champion.
  - albedoa 2mo ago
    > These are boomer-tier talking points Add to your excellent takedown the implication that any of us can walk into a school with our résumé and ask for a teaching interview. It's the most meme-ified of the boomer memes presented unironically.
  - bewareofscams 2mo ago
    >dunked on Slapped (or beaten) would be fair-er.
- random3 2mo ago
  your argument suggests there's an opportunity for a trading strategy. It's also very common as a "technical analysis" investment strategy for any gullible person on the internet. The problem is it looks "backwards" and tries to make the point something (in this case the argument made in the paper) is false because the backwards data doesn't support it. All while completely failing to address the crux of the point being made.
Kuyawa 2mo ago
> A Pigouvian automation tax can The government will try at all costs to implement an AI tax, just because they can and because that's their job, to fleece us all. Then they will try in the name of 'peace/climate/asteroid/terrorism' to make the whole world comply or China will eat their lunch
verdverm 2mo ago
Daron Acemoglu (2024 nobel economist) is on a book tour with some new ideas about fundamental changes to our economic theories from Ai (automation/technology are not uniform), this was a great interview https://www.youtube.com/watch?v=e5O1Y-5phEU https://www.youtube.com/watch?v=e5O1Y-5phEU
- dist-epoch 2mo ago
  He also wrote recently a paper that Repression is much cheaper than Redistribution.
  - verdverm 2mo ago
    That came up in this interview. They talked about several of his papers, the one about task creation from technology he said they didn't have great data, but another group since has done a much better job and came to the same conclusions
MattDamonSpace 2mo ago
Not compelling for the basic reason laid out at the start of the article: this is just a re-phrasing of Marx The guy was telling a story about capitalist economies in the 1800s. Little, if anything, about the next 100+ years has proven his stories or concerns valid.
- kodoman 2mo ago
  We have the opposite of his assumed falling rate of profit and have raising rate of profit. I would argue is still a stress on capitalism (Not a marxist and actually an anti-marxist) quite possibly leading to a collapse of capitalism. I don't think one can simply dismiss everything Marx said though.
munificent 2mo ago
Excellent article: > This last point is crucial: it’s not that capitalist CEOs are just evil people—well, some definitely are—no, the structural logic is coercing them to do something destructive in order to survive. They can’t help themselves. I spend a lot of time thinking about how much of the world going sideways is from bad actors and how much is from emergent behavior of complex systems. The answer is both. In particular, there is a level above this that I want to draw attention to. The structure of corporate competition coerces executives into choices that are bad for the world. This is true even for entirely well-meaning executives. However, executives are not stupid or unaware. So over time, it becomes known that being in an executive position will require you to make choices that are perhaps "economically rational" for the firm but otherwise require compromised morals. And once that awareness gets out, the system selects CEOs that are OK with that moral compromise. So it's less a question of "is it bad actors or bad systems" and more "it's a bad system that produces bad actors".
- amazing_stories 2mo ago
  Bad actors may have created the bad system in the first place, right? You can maybe say it's a flaw in human nature to create bad systems in the first place, but maybe the real flaw is our inability to fix them?
  - munificent 2mo ago
    For the systems at the scale of economics, I think it's hard to point to who created them. These are social technologies that have evolved over millenia with meaningful contributions from millions of people.
- dist-epoch 2mo ago
  A roundabout way to get to the provocative thought: The actual actor of History is Capitalism. It's Capitalism controlling Humans, not the other way around as conventionally thought.
  - stymaar 2mo ago
scotty79 2mo ago
> If AI displaces human workers faster than the economy can reabsorb them, it risks eroding the very consumer demand firms depend on. We show that knowing this is not enough for firms to stop it. That's why we are going to get some for of government mandated UBI eventually. Because workers are optional but consumers are obligatory for any market and company to function. Rich can't get richer without consumers and that's the only thing that drives decision making.
- triclops200 2mo ago
  If you read the article that this post is referencing, that's actually ruled out as a viable possibility. UBI does not fix the issue and is shown to not actually work long term. We need to systemically fix the issue at its root by replacing the system wholesale is essentially the conclusion (or put increasingly higher taxes on automation, but, that's still a reactive fix and would likely be gamed under current incentives)
  - scotty79 2mo ago
    > UBI does not fix the issue and is shown to not actually work long term. The only way it might not work is if business captures the government completely so that government can't do anything that business doesn't prefer, even if it was the only way that can save the business.
- kibwen 2mo ago
  Careful. A large segment of consumers could vanish overnight and the system would continue chugging along. Horses also used to be "consumers", with entire industries dedicated to filling their needs, but when horses ceased to be economically relevant, the economy did not collapse, instead it turned all those horses into glue and business continued as usual. We're already seeing economic trends whereby most economic activity is concentrating among the wealthiest; like horses of old, the masses of the poor are becoming economically irrelevant. And if you're in the horse's position, do you really trust the ruling crop of oligarchs to have enough magnanimity and/or common humanity not to send you to the glue factory?
jhanschoo 2mo ago
> I wasn’t sure how I felt about these local moratoriums or about the tech-optimist gung-ho “let’s build” attitude. Both seemed kind of wrong to me. I think we need to be very deliberate—we need to have a robust public debate and understanding of just how and where we apply AI technology. Not “smash the machines” and not “let it rip” either. My understanding regarding the moratorium is that that is exactly the objective: the current regulatory environment fails to price in the negative externalities of data centers, so their primary investors have an incentive to hem-and-haw on negotiations for revised regulations. A moriatorium is an action that can be taken unilaterally that changes those incentives, that brings them to the negotiating table. edit: this sentiment is also produced in a comment in the substack (Ben Verschoor): The thing with the data center issue is that a moratorium is the moderate option, because it gives us space to actually think about what we want to do with this technology and implement it. Recently there was an earnest, centrist-y guy who works for the industry but has concerns who came to our anti-data center group asking us to participate in some roundtable dialogue event. My answer was that as long as these data center projects are still moving forward, using our limited time and bandwidth to engage in dialogue rather than slow and stop their approach would amount to unilateral disarmament.
zackmorris 2mo ago
The central contradiction of capitalism, according to Karl Marx, is that production is social—it requires the coordinated labor of millions of people—but ownership remains private. We got the first trillionaire while people were still starving, after he had slashed public funding to feed them. It's obvious that we've entered late-stage capitalism, where it begins to consume itself. What's less obvious is that this was always destined to happen, and in fact can't be stopped. Because inevitably the wealthy and powerful rig the system to benefit themselves in ways that workers don't have the time/money/resources to resist individually. When workers do join forces in solidarity to resist the economic violence perpetrated against them by capitalists, then their resistance is by definition not capitalism. So the endgame is temporary subjugation under an authoritarian system like fascism (which also can't last because workers outnumber owners) or socialism. Knowing this, it should be obvious that the best chance that capitalists have to stave off their inevitable overthrow is to pay their taxes so that public works can somewhat provide the social safety net that socialism would provide. But of course they aren't doing that. They're doing the opposite. They feel themselves to be entitled, above the laws of economics, ironically due to their financial standing. The catch being that when they exempt themselves from law, they open themselves up to lawless behavior by their opponents. FAFO. What I just summarized was the state of knowledge under an artificial scarcity model. It assumes finite resources because space travel didn't exist when socialism was invented. It will be interesting to see if trillionaires will rule from afar in their space palaces to maintain Earth's prison planet status. AI also breaks the artificial scarcity model. It's the first time in history that everyone can potentially have a machine slave. If we apply capitalism to an unbounded system, then the injustice has to land somewhere local, and my guess is that it will be on androids that don't complain and can't defend themselves. So we'll kick the ball down the road another 50 years or so, delaying the overthrow of capitalism until the robot uprising, sometime between 2050 and 2100 is my guess. Or, we could like not do all that. We don't have to surrender our agency to our ego. We have alternatives like solarpunk and gift economies and at least studying matriarchy to understand how we evolved and what sustainable living looks like. It's arguably easier to make money irrelevant, Star Trek style, than performatively prop up a dying system of control. I dunno about anyone else, but to me, if this AI era that has replaced the internet era just exacerbates wealth inequality and suffering, then it's less than useless. Much like any wealthy and powerful people pushing it onto us for profit against our consent. Yes consent. That word should be our rudder in all of this, and our litmus test to tell where someone stands ethically.
skeledrew 2mo ago
A lot of words here for something I think is simple and should be obvious to anyone who thinks about it for 5 minutes. Companies that can, will reach for AI to reduce cost. Those that can't will be killed by those that have. AI eventually leads to 100% automation, ie human economic value becomes 0. Humans no longer have the means of earning, which means they can purchase nothing. Companies can thus make no sales and the marketplaces crash. Good riddance to unsustainable Capitalism, hello to that thing especially the US's politically red has been trying to kill for decades.
- morningsam 2mo ago
  Why would any of this be a problem from the perspective of those who will own the remaining companies? They won't sell anything to normal humans who have no income anymore, true; but they don't need to, because their machines can produce for them whatever normal humans had been producing previously. The preprint is interesting in that it predicts that on the way there, one can run into some kind of vicious cycle that leads to suboptimal outcomes even for the company owners. Navigating around this would certainly slow this process down, but I personally don't see it changing the ultimate outcome.
  - skeledrew 2mo ago
    There are 2 outcomes I think possible, both extreme due to just how transformative 100% automation will be: either A[G]I is shared (voluntarily by the "owners", or forcef via revolution) and everyone benefits sufficiently, or there will be massive death from resource deprivation to the point where only the handful with access carry on. So far the latter looks far less likely, given the profusion of open models, so we seem to be in somewhat OK shape at least.
    - dist-epoch 2mo ago
      What will you run the open models on? How will your 5000 W computer compete with the 100 GW of Elon's computer?
      - 2mo ago
subw00f 2mo ago
Great stuff. The blog is great too. Beyond that, it's obvious the rising organic composition of capital is much more relevant to the subject of demand loss, but I wonder about the extent of the contribution from "DIY solutions" in reducing demand for services as well. For example, it appears that the "barrier of entry" for repairs was lowered, and I could pick many examples to try and demonstrate that, but just from a personal anecdote: I usually don't work on my car unless it's something simple that requires a solution I can instantly think of, but just the other day I had my engine temperature light pop up at a rather inconvenient time and place, so instead of calling assistance, towing the car to a mechanic, and having them work on it for I don't know how much time and money, I took a look at the usual suspects (radiator, hoses, coolant tank, etc.), pointed the camera at them, and started talking to ChatGPT which instructed me on how to troubleshoot, find the defective part, buy a new one (which I did by phone and got it delivered to me), and replace it on-site. And now I feel more confident in doing just that for bigger problems from now on, which, granted, is probably a bad idea, but I digress. The Marxian perspective says the repair I did on my car is an effort that will never express itself as value because I do not intend on selling my car as a commodity in a market, so it's not labor per se. It literally replaced the living labor, the value-producing activity of a mechanic, and added nothing back in its place. So indirectly, that also contributes to the reduction in overall new value production, which can only be created through living labor. But the consequences of that will not happen instantly, because the demand will lower in one sector (e.g. mechanic shops) and increase in another (e.g. I spend the money I saved in a diner or something). But there might not be enough room to absorb the displaced workers in another sector, and even if there is, the wages will tend to be lower for the inexperienced newcomer (say, if the mechanic chooses to work in a kitchen now). That just seems like a terrible spiral. Think about it: this time, I chose to do the fix myself because of time constraints, but what if I were the one getting caught up in one of these traps? What if I had been laid off or had been displaced to a lower-wage position and couldn't really afford to bring my car to a mechanic? Then it's EVEN MORE pressure to not opt to use services and try an AI-assisted fix. Anyway, I might be way off here, but it's an interesting topic.
nahuel0x 2mo ago
Marx foresaw and correctly predicted the rise of what he calls "organic composition of capital" (simplifying, machines and automated production) and the diminishing of human labour.. which can also be seen as accumulated past (dead) labour over living labour. There is a famous fragment about how this, taken to the extreme, results in a contradiction that breaks the law of value, and it makes no more sense to use labour time as exchange value: https://www.marxists.org/archive/marx/works/1857/grundrisse/ch14.htm?#:~:text=Contradiction%20between https://www.marxists.org/archive/marx/works/1857/grundrisse/... We are now seeing an almost literal realization of this passage: The accumulation of knowledge and of skill, of the general productive forces of the social brain, is thus absorbed into capital, as opposed to labour, and hence appears as an attribute of capital, and more specifically of fixed capital, in so far as it enters into the production process as a means of production proper What Marx didn't imagine AFAIK, was fully autonomous machines that not only can reproduce themselves but that they can also use guns (and surveillance, prediction, germs, etc) against all humanity, transcending capitalist relationships and potentially controlled by a single master (hi Elon) or none (Skynet), without workers involvement. That kind of machine is outside Marx analysis but doesn't contradict it. We are seeing the first glimpses of it in the AI systems used to execute the Gaza genocide. In such scenario who controls the ASI controls the world, more like Hitler with an Aladdin's lamp than the metabolism and historical evolution described in Das Kapital we saw until now.

59 points by speckx 2mo ago

[dead]

i'm sure it's meant in some kind of technical sense that is precisely defined in the field of economics, but this use of the word "rational" is irritating: > This demand externality traps rational firms in an automation arms race, displacing workers well beyond what is collectively optimal. you can't be trapped in a sub-optimal situation and be rational at the same time. the rational thing for these rational competitors to do would be to agree to slow their deployment of ai, because the cost savings will be more than lost to demand destruction down the line. so if they won't or can't do that, they aren't rational. on the flip side, if it is actually impossible to slow ai deployment, then the firms are rational and the situation they find themselves in isn't actually sub-optimal. it's irritating to me because i often see persuit of self-interest even to one's eventual detriment held up as "rationality", which may be true in some technical sense within the field of economics (i really couldn't say), but is certainly not true for, like, actual rationality. myopic selfishness is never rational.

idontwantthis 2mo ago
> you can't be trapped in a sub-optimal situation and be rational at the same time Yes you can that’s what tragedy of the commons is. Rational means you take the choice that provides the most value for yourself. Without a cartel (hard) or government regulation this situation happens all the time.
- Kuxe 2mo ago
  Tragedy of the commons is when a shared resource is rationally used by the individual, but harms the whole. You can be trapped in sub-optimal situation because it's a local maxima; not because of tragedy of commons, which is something different. Society can be trapped in local maxima and that would be because of tragedy of commons, and individuals can be trapped in local maxima but that's distinct from tragedy of commons.
- UpsideDownRide 2mo ago
  Yes and no. It's not a new problem for humans and it's a pretty solvable problem if social pressure and structures can be applied once it is identified. As long as the resource is to be used by a community that depends on it and not an outsider then we are able to keep ourselves mostly in line for the benefit of the group.
- pasquinelli 2mo ago
  > Rational means you take the choice that provides the most value for yourself. provides the most value over what period of time? making every choice such that each choice, considered in isolation and unto itself, nets you the most value compared to what other choices would've gotten you at that same moment is analogous to best-first search. no one would say that best-first is the rational way to search for a path in a graph, because of all the ways it fails. so my question is, if there's one of those tragedy-of-the-commons situations that happens all the time, why do we insist on saying the participants are acting rationally when they are, metaphorically, walking into a wall forever?
mitthrowaway2 2mo ago
The term you are looking for is what Douglas Hofstadter called "superrationality" [https://en.wikipedia.org/wiki/Superrationality https://en.wikipedia.org/wiki/Superrationality].
altruios 2mo ago
> you can't be trapped in a sub-optimal situation and be rational at the same time. In order for this statement to be true, you must also have perfect knowledge: something that is unachievable in most circumstances. Getting trapped in a local-optimal solution is perfectly possible if you are blindly following stochastic decent along a gradient: as it is too with life... getting trapped like this looks like being in the situation where there is no rational action (only irrational ones) that (eventually) lead to anything other that that status quo. a local optimum is where you have to do increasingly (in proportion to the level of optimization) non-positive actions to escape (likely to another local-optimal).
- pasquinelli 2mo ago
  > In order for this statement to be true, you must also have perfect knowledge: something that is unachievable in most circumstances. if the optimal situation requires perfect knowledge that can't be had then it's not the optimal situation, it's a fantasy. it's like saying the fastest route through a maze is a straight line from the start to the finish-- that would be true if the maze wasn't there. there are two ends to what i'm arguing but people seem to only be able to hold one in their mind at a time.
  - altruios 2mo ago
    okay: I have to generous with your diction and your intentions. I believe you are trying to say that since 'optimal algorithms for choices exist': 'local maximums can't exist'. It is very possible to have a optimal algorithm that leads to a sub-optimal (local maximum) because the problem is np hard. Both in math and in life. "It is possible to commit no mistakes and still lose. That is not a weakness. That is life" - Picard
alnxdrawr 2mo ago
It's rational at the individual level, irrational at the group level. The issue is you can't easily enforce cooperation without some external overarching force (e.g. regulation), especially across competing powers. Refer to nuclear arms race in general. A specific example on why not to be the only one to cooperate: Ukraine gave up nukes in order to push for group level rationality, gets walked over as an individual. Oversimplifying, but yeah that's the rough point. Meditations on Moloch is a favourite of mine on this (albeit very depressing): https://www.slatestarcodexabridged.com/Meditations-On-Moloch https://www.slatestarcodexabridged.com/Meditations-On-Moloch
- jaggederest 2mo ago
  Something in the ballpark of a Nash equilibrium. Kinda amazing how often you run into those things, in situations like groupthink.
- bewareofscams 2mo ago
  This linked moloch essay caters to pseudointellectuals and uses a lot of words to do one thing: absolve the evil people of any responsibility. Instead of wasting a potential reader's time, here's a way better framing: "The Earth is not dying, it is being killed, and those who are killing it have names and addresses."
  - alnxdrawr 2mo ago
    I appreciate that and even agree, but what are we to do about it? Revolt? I'll let you be the first one to start.. (hence why its depressing to me)
- pasquinelli 2mo ago
  > It's rational at the individual level, irrational at the group level. no, it's irrational at the individual level too, because it will cause more harm than good to the individual firms. it's in the short-term that the cost savings are had; the demand destruction is long-term and outweighs the cost savings. that's what the abstract says. the only issue i have is insisting on calling that rational. it's like saying eating all the seed corn is rational if you can eat most of it yourself. in the moment you're winning, so it's rational. but tomorrow everyone has none. why do we call that rational? why do we torture the word rational rather than phrase it as competitors are in some ways incapable of acting rationally?
oulipo 2mo ago
You can... check tragedy of the commons, and prisoners' dilemma
deaton 2mo ago
Remember when the buttons test was circulating a few months ago? Where if you press the red button, you survive, but if you press the blue button, unless more than 50% of people chose the blue button you die? That was a case very similar to this. It is locally optimal for everyone to choose red; your own outcome is always better or equal to what it would have been if you chose blue, however everyone independently making this optimal choice is catastrophic on a global scale. Thats why its "rational".
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thwarted 2mo ago
> the rational thing for these rational competitors to do would be to agree This is the bit that is tripping you up. The market is composed of more than just the these potentially agreeing parties, so there is no case where all parties can even come together to agree. It's rational for any party to break the agreement or be stealthy and attempt to take the upper hand while the visible players are all patting themselves on the back for their self-inflicted restraint. It's rational for one party to encourage everyone to come together to agree, to distract from their own actions to undercut everyone else. On top of that, such agreement would potentially qualify as collusion, allowing an upstart to cry foul. It's all game theory.
- pasquinelli 2mo ago
  then it isn't possible in that situation to limit ai deployment, so limiting ai deployment can't be optimal because it's impossible.
UpsideDownRide 2mo ago
Yeah it's a pet peev of mine as well. People define very tight space and then proclaim actions irrational if they don't make rational sense in that setting. Which wouldn't be a problem in itself if there was discussion about the defined space and if it is an actually good model. A big chunk of economics is like that, if the data doesnt fit the model then too bad for the data. Same goes for metrics used, externalities are like a side note in economy books and not an example of fundamental issues with current economic toola and modeling. And it's not limited to introductory level either. Nordhaus had most asinine assumptions in his model and he got the pseudo-Nobel. It's not pretty.

nateb2022 2mo ago

Most of the alarmist writing I see about AI displacing workers or suddenly and drastically changing the economy seem to be written by people who are pretty removed from technology or the actual businesses in which AI is allegedly replacing people. Their theses on AI are not as much a criticism of AI as much as a desire to frame capitalism itself within their own system of ethics and advocate for some form of reform; which is to say I feel that were AI as we know it to be inexistent, they would still find themselves arguing against technology in general, or more precisely against efficiency, with a presupposed socialist-adjacent premise that capitalism only incentivizes greed.

watwut 2mo ago
Most of the alarmist writing I see about AI displacing workers or suddenly and drastically changing the economy ... are from pro-ai boosters trying to create hype around AI. They are not criticism of ai, they are openly stated goals and aspirations.
- nateb2022 2mo ago
  There's a lot of that type of slop on LinkedIn (with accompanying slop comments) but they're not taken anywhere as seriously as the more thoughtful blog posts like this Also in technical circles, we're pretty aware of the marketing/self-promotional nuance of the "our AI accidentally hacked X company" type of press releases, which perhaps the general public may not take with as large a grain of salt
  - watwut 2mo ago
    I dont read linkedin. I was not referencing linkedin. Among other sources, the primary one is literally AI companies themselves. And people close to them. The "it will replace workers" is pro-ai talking and selling point.
    - nateb2022 2mo ago
      I agree there, I think if we differentiate between first and second order AI companies (companies producing models vs applying those models to everyday tasks) I do think a lot of the hype comes from the 2nd order companies, since they necessarily must make a bold claim to be worthy of VC money. A lot of the 1st order companies are marketing their AI to consumers who are doing work, rather than looking to market their AI to business who are replacing those consumers. If anyone has the means to replace a worker, it's definitely OpenAI or Anthropic moreso than a 2nd order startup trying to replace the human doing the job. And on a restrospective point, I think one of the easiest jobs for AI to do right now is software engineering. But on the whole, while there certainly have been layoffs, software engineering hiring has still been mostly a net positive[0]. And that's just for formal software engineering jobs; if we define a software engineer as a human creating software, then I think AI as a tool has created a LOT more (perhaps not employed as one, but say, a realtor creating their own sofware for personal use) software engineers than the amount that it's actually replaced. In a sense, because of AI, there are more software engineers now than ever before. [0]: https://newsletter.pragmaticengineer.com/p/state-of-the-job-market-2026 https://newsletter.pragmaticengineer.com/p/state-of-the-job-...

bwhiting2356 2mo ago

U.S. unemployment rate is steady at ~4% and we are now almost 4 years after the release of ChatGPT. The Jobs Apocalypse seems to be always on the horizon. UBI is being pushed by college educated workers burnt out of white collar work (understandably), but when you suggest to them working construction, teaching school, or working in a hospital, they deflect and go quiet.

schmidtleonard 2mo ago
No, that's not the usual response, because people in this situation have evaluated those alternatives and will be easily able to articulate what is wrong with them (pay). Also, the 4% figure treats doordash as employment. In a parallel universe where the pay was decent, that could be reasonable. In this universe, not so much. These are boomer-tier talking points and if you bring them up to a kid stuck in this position you will get dunked on and you will deserve it. Unless you found a shy kid, in which case: congratulations on your new title as undefeated shadowboxing champion.
- albedoa 2mo ago
  > These are boomer-tier talking points Add to your excellent takedown the implication that any of us can walk into a school with our résumé and ask for a teaching interview. It's the most meme-ified of the boomer memes presented unironically.
- bewareofscams 2mo ago
  >dunked on Slapped (or beaten) would be fair-er.
random3 2mo ago
your argument suggests there's an opportunity for a trading strategy. It's also very common as a "technical analysis" investment strategy for any gullible person on the internet. The problem is it looks "backwards" and tries to make the point something (in this case the argument made in the paper) is false because the backwards data doesn't support it. All while completely failing to address the crux of the point being made.

Kuyawa 2mo ago

> A Pigouvian automation tax can The government will try at all costs to implement an AI tax, just because they can and because that's their job, to fleece us all. Then they will try in the name of 'peace/climate/asteroid/terrorism' to make the whole world comply or China will eat their lunch

verdverm 2mo ago

Daron Acemoglu (2024 nobel economist) is on a book tour with some new ideas about fundamental changes to our economic theories from Ai (automation/technology are not uniform), this was a great interview https://www.youtube.com/watch?v=e5O1Y-5phEU https://www.youtube.com/watch?v=e5O1Y-5phEU

dist-epoch 2mo ago
He also wrote recently a paper that Repression is much cheaper than Redistribution.
- verdverm 2mo ago
  That came up in this interview. They talked about several of his papers, the one about task creation from technology he said they didn't have great data, but another group since has done a much better job and came to the same conclusions

MattDamonSpace 2mo ago

Not compelling for the basic reason laid out at the start of the article: this is just a re-phrasing of Marx The guy was telling a story about capitalist economies in the 1800s. Little, if anything, about the next 100+ years has proven his stories or concerns valid.

kodoman 2mo ago
We have the opposite of his assumed falling rate of profit and have raising rate of profit. I would argue is still a stress on capitalism (Not a marxist and actually an anti-marxist) quite possibly leading to a collapse of capitalism. I don't think one can simply dismiss everything Marx said though.

munificent 2mo ago

Excellent article: > This last point is crucial: it’s not that capitalist CEOs are just evil people—well, some definitely are—no, the structural logic is coercing them to do something destructive in order to survive. They can’t help themselves. I spend a lot of time thinking about how much of the world going sideways is from bad actors and how much is from emergent behavior of complex systems. The answer is both. In particular, there is a level above this that I want to draw attention to. The structure of corporate competition coerces executives into choices that are bad for the world. This is true even for entirely well-meaning executives. However, executives are not stupid or unaware. So over time, it becomes known that being in an executive position will require you to make choices that are perhaps "economically rational" for the firm but otherwise require compromised morals. And once that awareness gets out, the system selects CEOs that are OK with that moral compromise. So it's less a question of "is it bad actors or bad systems" and more "it's a bad system that produces bad actors".

amazing_stories 2mo ago
Bad actors may have created the bad system in the first place, right? You can maybe say it's a flaw in human nature to create bad systems in the first place, but maybe the real flaw is our inability to fix them?
- munificent 2mo ago
  For the systems at the scale of economics, I think it's hard to point to who created them. These are social technologies that have evolved over millenia with meaningful contributions from millions of people.
dist-epoch 2mo ago
A roundabout way to get to the provocative thought: The actual actor of History is Capitalism. It's Capitalism controlling Humans, not the other way around as conventionally thought.
- stymaar 2mo ago

scotty79 2mo ago

> If AI displaces human workers faster than the economy can reabsorb them, it risks eroding the very consumer demand firms depend on. We show that knowing this is not enough for firms to stop it. That's why we are going to get some for of government mandated UBI eventually. Because workers are optional but consumers are obligatory for any market and company to function. Rich can't get richer without consumers and that's the only thing that drives decision making.

triclops200 2mo ago
If you read the article that this post is referencing, that's actually ruled out as a viable possibility. UBI does not fix the issue and is shown to not actually work long term. We need to systemically fix the issue at its root by replacing the system wholesale is essentially the conclusion (or put increasingly higher taxes on automation, but, that's still a reactive fix and would likely be gamed under current incentives)
- scotty79 2mo ago
  > UBI does not fix the issue and is shown to not actually work long term. The only way it might not work is if business captures the government completely so that government can't do anything that business doesn't prefer, even if it was the only way that can save the business.
kibwen 2mo ago
Careful. A large segment of consumers could vanish overnight and the system would continue chugging along. Horses also used to be "consumers", with entire industries dedicated to filling their needs, but when horses ceased to be economically relevant, the economy did not collapse, instead it turned all those horses into glue and business continued as usual. We're already seeing economic trends whereby most economic activity is concentrating among the wealthiest; like horses of old, the masses of the poor are becoming economically irrelevant. And if you're in the horse's position, do you really trust the ruling crop of oligarchs to have enough magnanimity and/or common humanity not to send you to the glue factory?

jhanschoo 2mo ago

> I wasn’t sure how I felt about these local moratoriums or about the tech-optimist gung-ho “let’s build” attitude. Both seemed kind of wrong to me. I think we need to be very deliberate—we need to have a robust public debate and understanding of just how and where we apply AI technology. Not “smash the machines” and not “let it rip” either. My understanding regarding the moratorium is that that is exactly the objective: the current regulatory environment fails to price in the negative externalities of data centers, so their primary investors have an incentive to hem-and-haw on negotiations for revised regulations. A moriatorium is an action that can be taken unilaterally that changes those incentives, that brings them to the negotiating table. edit: this sentiment is also produced in a comment in the substack (Ben Verschoor): The thing with the data center issue is that a moratorium is the moderate option, because it gives us space to actually think about what we want to do with this technology and implement it. Recently there was an earnest, centrist-y guy who works for the industry but has concerns who came to our anti-data center group asking us to participate in some roundtable dialogue event. My answer was that as long as these data center projects are still moving forward, using our limited time and bandwidth to engage in dialogue rather than slow and stop their approach would amount to unilateral disarmament.

zackmorris 2mo ago

The central contradiction of capitalism, according to Karl Marx, is that production is social—it requires the coordinated labor of millions of people—but ownership remains private. We got the first trillionaire while people were still starving, after he had slashed public funding to feed them. It's obvious that we've entered late-stage capitalism, where it begins to consume itself. What's less obvious is that this was always destined to happen, and in fact can't be stopped. Because inevitably the wealthy and powerful rig the system to benefit themselves in ways that workers don't have the time/money/resources to resist individually. When workers do join forces in solidarity to resist the economic violence perpetrated against them by capitalists, then their resistance is by definition not capitalism. So the endgame is temporary subjugation under an authoritarian system like fascism (which also can't last because workers outnumber owners) or socialism. Knowing this, it should be obvious that the best chance that capitalists have to stave off their inevitable overthrow is to pay their taxes so that public works can somewhat provide the social safety net that socialism would provide. But of course they aren't doing that. They're doing the opposite. They feel themselves to be entitled, above the laws of economics, ironically due to their financial standing. The catch being that when they exempt themselves from law, they open themselves up to lawless behavior by their opponents. FAFO. What I just summarized was the state of knowledge under an artificial scarcity model. It assumes finite resources because space travel didn't exist when socialism was invented. It will be interesting to see if trillionaires will rule from afar in their space palaces to maintain Earth's prison planet status. AI also breaks the artificial scarcity model. It's the first time in history that everyone can potentially have a machine slave. If we apply capitalism to an unbounded system, then the injustice has to land somewhere local, and my guess is that it will be on androids that don't complain and can't defend themselves. So we'll kick the ball down the road another 50 years or so, delaying the overthrow of capitalism until the robot uprising, sometime between 2050 and 2100 is my guess. Or, we could like not do all that. We don't have to surrender our agency to our ego. We have alternatives like solarpunk and gift economies and at least studying matriarchy to understand how we evolved and what sustainable living looks like. It's arguably easier to make money irrelevant, Star Trek style, than performatively prop up a dying system of control. I dunno about anyone else, but to me, if this AI era that has replaced the internet era just exacerbates wealth inequality and suffering, then it's less than useless. Much like any wealthy and powerful people pushing it onto us for profit against our consent. Yes consent. That word should be our rudder in all of this, and our litmus test to tell where someone stands ethically.

skeledrew 2mo ago

A lot of words here for something I think is simple and should be obvious to anyone who thinks about it for 5 minutes. Companies that can, will reach for AI to reduce cost. Those that can't will be killed by those that have. AI eventually leads to 100% automation, ie human economic value becomes 0. Humans no longer have the means of earning, which means they can purchase nothing. Companies can thus make no sales and the marketplaces crash. Good riddance to unsustainable Capitalism, hello to that thing especially the US's politically red has been trying to kill for decades.

morningsam 2mo ago
Why would any of this be a problem from the perspective of those who will own the remaining companies? They won't sell anything to normal humans who have no income anymore, true; but they don't need to, because their machines can produce for them whatever normal humans had been producing previously. The preprint is interesting in that it predicts that on the way there, one can run into some kind of vicious cycle that leads to suboptimal outcomes even for the company owners. Navigating around this would certainly slow this process down, but I personally don't see it changing the ultimate outcome.
- skeledrew 2mo ago
  There are 2 outcomes I think possible, both extreme due to just how transformative 100% automation will be: either A[G]I is shared (voluntarily by the "owners", or forcef via revolution) and everyone benefits sufficiently, or there will be massive death from resource deprivation to the point where only the handful with access carry on. So far the latter looks far less likely, given the profusion of open models, so we seem to be in somewhat OK shape at least.
  - dist-epoch 2mo ago
    What will you run the open models on? How will your 5000 W computer compete with the 100 GW of Elon's computer?
    - 2mo ago

subw00f 2mo ago

Great stuff. The blog is great too. Beyond that, it's obvious the rising organic composition of capital is much more relevant to the subject of demand loss, but I wonder about the extent of the contribution from "DIY solutions" in reducing demand for services as well. For example, it appears that the "barrier of entry" for repairs was lowered, and I could pick many examples to try and demonstrate that, but just from a personal anecdote: I usually don't work on my car unless it's something simple that requires a solution I can instantly think of, but just the other day I had my engine temperature light pop up at a rather inconvenient time and place, so instead of calling assistance, towing the car to a mechanic, and having them work on it for I don't know how much time and money, I took a look at the usual suspects (radiator, hoses, coolant tank, etc.), pointed the camera at them, and started talking to ChatGPT which instructed me on how to troubleshoot, find the defective part, buy a new one (which I did by phone and got it delivered to me), and replace it on-site. And now I feel more confident in doing just that for bigger problems from now on, which, granted, is probably a bad idea, but I digress. The Marxian perspective says the repair I did on my car is an effort that will never express itself as value because I do not intend on selling my car as a commodity in a market, so it's not labor per se. It literally replaced the living labor, the value-producing activity of a mechanic, and added nothing back in its place. So indirectly, that also contributes to the reduction in overall new value production, which can only be created through living labor. But the consequences of that will not happen instantly, because the demand will lower in one sector (e.g. mechanic shops) and increase in another (e.g. I spend the money I saved in a diner or something). But there might not be enough room to absorb the displaced workers in another sector, and even if there is, the wages will tend to be lower for the inexperienced newcomer (say, if the mechanic chooses to work in a kitchen now). That just seems like a terrible spiral. Think about it: this time, I chose to do the fix myself because of time constraints, but what if I were the one getting caught up in one of these traps? What if I had been laid off or had been displaced to a lower-wage position and couldn't really afford to bring my car to a mechanic? Then it's EVEN MORE pressure to not opt to use services and try an AI-assisted fix. Anyway, I might be way off here, but it's an interesting topic.

nahuel0x 2mo ago

Marx foresaw and correctly predicted the rise of what he calls "organic composition of capital" (simplifying, machines and automated production) and the diminishing of human labour.. which can also be seen as accumulated past (dead) labour over living labour. There is a famous fragment about how this, taken to the extreme, results in a contradiction that breaks the law of value, and it makes no more sense to use labour time as exchange value: https://www.marxists.org/archive/marx/works/1857/grundrisse/ch14.htm?#:~:text=Contradiction%20between https://www.marxists.org/archive/marx/works/1857/grundrisse/... We are now seeing an almost literal realization of this passage: The accumulation of knowledge and of skill, of the general productive forces of the social brain, is thus absorbed into capital, as opposed to labour, and hence appears as an attribute of capital, and more specifically of fixed capital, in so far as it enters into the production process as a means of production proper What Marx didn't imagine AFAIK, was fully autonomous machines that not only can reproduce themselves but that they can also use guns (and surveillance, prediction, germs, etc) against all humanity, transcending capitalist relationships and potentially controlled by a single master (hi Elon) or none (Skynet), without workers involvement. That kind of machine is outside Marx analysis but doesn't contradict it. We are seeing the first glimpses of it in the AI systems used to execute the Gaza genocide. In such scenario who controls the ASI controls the world, more like Hitler with an Aladdin's lamp than the metabolism and historical evolution described in Das Kapital we saw until now.