A friend owns a three-unit building in San Francisco (rents carefully controlled by qualified government officials!) and is concerned about the value of his place if AI eliminates most programming jobs. My response was to consider the extreme case that 100 percent of GDP is generated by AI and robots. In that case, the economy becomes like a petrostate, e.g., Kuwait. The efforts of human residents aren’t significant economically compared to oil flowing or NVIDIA chips cogitating. In petrostates, however, the rulers don’t expel most or all of the citizens (like Bhutan did!), but instead use whatever money isn’t stolen by elites to house and feed everyone. Thus, in the typical petrostate, real estate still has substantial value. “Maybe everyone in San Francisco will be on Section 8 and the rent will be paid by the government instead of individuals,” I said, “but you’ll still get rent.”
How will the government get revenue? Petrostates often nationalize the oil industry, as Venezuela did in 1976 and 2007 (Hugo Chavez for the win!). If most of the wealth and income of the U.S. ends up in the hands of the owners of NVIDIA, Anthropic, et al., the government can simply nationalize the top 20 most successful AI-related companies. (We can see a half measure of this right now with Bernie Sanders and Ro Khanna proposing to harvest 5 percent of billionaire wealth every year.)
In other words, it doesn’t make sense to be an AI Doomer on economic grounds because being a citizen of a typical petrostate isn’t terrible (let’s ignore Venezuela for the moment!).
Let’s check in on a petrostate that has been shooting down U.S. fighter jets recently. Kuwait is rich, though not quite as rich per capita as it once was. It looks like they’ve grown the denominator via population growth and, thus, each individual’s share of the oil income has been reduced.
(Note that U.S. politicians, beginning with Lyndon Johnson in the mid-1960s, have been working desperately to grow U.S. population via immigration, exactly the opposite of what makes sense if our destiny is that most wealth comes from something that functions like an oil well.)
Inflation targeting has done a good job turning higher productivity into higher passive income. Asset prices must rise to offset falling wages.
We could have built enough housing for all the immigrants they want for the amount they wasted on AI, although lazy indigent freeloaders just tear up public housing faster than it can be rebuilt.
Why didn’t they just outlaw AI like they outlawed marijuana? It, and social media, is indeed a drug with no known medicinal uses, unlike marijuana which oddly enough has a few because we evolved with it. Ever heard of a cannabinoid receptor? You just can’t remove the reward/punishment response from people without messing things completely up. OpenAI was supposed to ethically study AI. They just couldn’t see past their own billfold to pull the plug.
I guess with fossil fuels, and all the other modern “shortcuts” too. I’d call it a prostrate, not a petrostate.
> Why didn’t they just outlaw AI like they outlawed marijuana? It, and social media, is indeed a drug with no known medicinal uses, unlike marijuana which oddly enough has a few because we evolved with it.
LOL! Yeah, tech and humanities don’t go hand in hand in the States, perhaps:
Technopoly by Niel Postman
https://youtu.be/hlrv7DIHllE
Neo Hippy:
> lazy indigent freeloaders
Have some respect on Phil’s blog. They are NOBLE lazy indigent freeloaders, likely immigrants.
PhilG Fan:
I never heard of Neil Postman, thanks. I attended Columbia, like him/herm/hermit did, but I still might have a listen. I have a German last name, but I’m not Jewish except in spirit (I’m a Christian/Buddhist/Jainist hybrid), I was always getting calls from the JDL at Columbia, would you call that semitism or pro-semitism?
Phil fans probably should also listen to Postman’s “Bullshit and the Art of Crap-Detection” lecture, to study demi-crats. Maybe also check out Sagan’s “Baloney Detection Kit” (seems like he ripped off Postman on that one.)
> Phil fans probably should also listen to Postman’s “Bullshit and the Art of Crap-Detection” lecture, to study demi-crats.
Thanks!
> citizens (like Bhutan did!),
Of note is that more than 70% of their population claimed that they are Buddhists in the 2020 census:
– 74.7% Buddhism
– 22.6% Hinduism
– 1.9% Bon
– 0.8% others
> The Bhutanese monarchy and ruling elite viewed their growing numbers and cultural distinctiveness as a potential threat to national unity.
I hope this isn’t an example of the disconnect between the public sentiment and people with power, at least at the very beginning, which reminds of a very funny TheOnion article:
“MAGA Voter Assumed Trump Would Only Deport People On List She Mailed To White House”
https://theonion.com/maga-voter-assumed-trump-would-only-deport-people-on-list-she-mailed-to-white-house/
Richard Thompson covers Brittney’s “Oops! I did it again!”
https://youtu.be/HiN2Tbqww2c?si=gyCazUqCoLGt7ZHV