Turn one: a company licenses AI to replace a significant portion of its workforce. Costs drop. Margins expand. The stock price goes up. Everyone on the earnings call is happy. When Block’s Jack Dorsey laid off nearly half his workforce in March, citing AI coding agents, investors responded with a twenty-five percent stock price surge in after-hours trading. The market rewarded the elimination of human labor with an immediate, massive transfer of value to shareholders.
Turn two: the replaced workers stop earning income. They cut spending. The businesses they used to patronize see revenue decline. Some of those businesses also adopt AI to cut costs, compounding the displacement. Consumer demand contracts across the economy.
Turn three: the company that fired its workers to save money discovers that its customers were, in aggregate, other companies’ workers. Revenue growth stalls. The AI subscription that was supposed to be an investment in efficiency turns out to be a contribution to the destruction of its own market.
Replies (5)
I'm optimistic that the mitigating factors do their job too. People will partially figure out how to use AI and not be captured by it, run local models, use it productively and not delusionally, etc. But intelligent approaches seem pretty marginal compared with the hype right now. The capex itself seems like it will inevitably create a massive bubble that will pop when it comes up against the hard limits of energy.
But then how are you squaring that sentence with the one before about shovels not centralizing power.
Read Tools For Convivialityby Ivan Illich. The effect of a tool is determined by its scale and ecology. If only two businesses were allowed to mnufacture shovels that would be centralizing too. Thechallenge is in making this technology, which exists and can't not exist, into a convivial tool (manifested at a scale healthy for humanity). The other side (making them useful) depends on mitigati g all the weird externalities that come from having a "thinking" machine (skill atrophy, AI psychosis, etc etc).
Sorry, that sounded aggressive, I just mean Illich is great
No I'm saying square the idea that there are limits to the centralization due to power constrains and open source competition with your notion that ai is centralizing.
I'm saying the better shovel they made is great and if they try to use monopoly pricing power they're gonna have a hard time.
Again all of your externality arguments are just the same as with shovels.
What about the muscle mass loss that easier dirt removal would cause?
