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Notes -
(Trigger warnings: another AI post; Jean-Jacques Rousseau)
I want to talk about the economy in the face of the AI revolution, but let's go back to the basics first.
What is the purpose of a company? Not the stated one, the original one.
To provide value to its shareholders? Of course not, that's a very narrow view! It's like saying armies exist to kill people.
Do companies and markets provide a decentralized way to coordinate the efforts of large groups of people (choreography vs orchestration)? Yes, but what for?
Do companies and markets exist to maximize the economic output? Many would say yes, but the idea is wrong and will become more obviously wrong the more AI we inject into the economy.
Companies and markets exist to maximize the consumption! They exist so that more people consume more goods and services! The fact that these companies have to pay their workers is not an unwanted side effect, it's a feature! Companies exist to create and distribute goods and services to humans, and markets exist to ensure that each human gets a share that is sufficiently fair.
Both the industrial revolution and the transition to a service-based economy created millions, if not billions of new jobs, but is this an inevitable consequence of free markets? Will AI-fication of the modern economy do the same?
The correct answer is not "yes" or "no". It's "mu". If the economy reinvents itself again and people of the Global North find themselves new jobs, that's fine.
But if we suddenly start running out of jobs, accepting it as the inevitability of the market forces is the wrong way out. The right way out is retiring the market forces, not submitting to them. Creating shareholder value has always been the real side effect.
A sort of tangential comment, but when reading that in one month we have Amazon and retailer price-fixing, 90% of poultry suppliers price-fixing, most of the world’s shipping container manufacturers price-fixing, and a new investigation into beef price-fixing, I’m thinking the model of consumer capitalism is simply wrong today. It’s easy and desirable for wealthy owners to coordinate together to maximize profits by agreeing on prices in unison and only changing this formula to prevent a competitor from gaining a foothold in the industry with the deployment of predatory pricing. You can’t do anything about this, and if they’re clever, they realize that it is in their collective interest to never lower prices and instead make more money through coordination without actually putting anything in writing. The system actually just sucks!
But all the capitalists say farmer brown will simply spin up a multi-billion dollar beef industry; using the power of his mind and his bootstraps to roll back climate change 15 years and materialise another Idaho's worth of grazing land from the ether!
But they don't say that, as you know.
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