I think I have a similar picture of things. Importantly, you could totally get a self-maintaining, self-replicating automated sub-economy where, say, raw materials are extracted and refined, manufacturing of equipment for manufacturing and extraction are created and transported, etc.
Some huge uncertainties for me:
The modern economy is quite integrated, so lots of things ultimately require quite a diverse range of raw and transformed materials. How diverse? What's the minimally-reachable (not at tech maturity, but starting where we are now) in-principle fully closed manufacturing loop? How big can it scale, and how soon do other loops get closed?
If something is in-principle self-sustaining, under what conditions does that get actualised? And how voraciously?
What are the timelines and bottlenecks to the AI components for something like this? What about the machinery and robotics components?
Optimistically, but still quite dauntingly, this points at a future where economic management is more like ecological management (with various interleaving self-sustaining, self-replicating production loops vying for resources, and some kind of successor to price/demand dynamics hopefully balancing the allocation in a good way). Pessimistically, it's the most plausible near-term self-replicating successor to human and biological life.
The modern economy is quite integrated, so lots of things ultimately require quite a diverse range of raw and transformed materials. How diverse? What's the minimally-reachable (not at tech maturity, but starting where we are now) in-principle fully closed manufacturing loop? How big can it scale, and how soon do other loops get closed?
I believe there's designs that vastly reduce the diversity and/or quantity of expensive inputs. As an example, Boston Dynamics Atlas humanoid robots use servohydraulic joints. A small control motor similar in size to ones... (read more)
Summary: Analysis claiming that automating X% of the economy can only boost GDP by 1/(1-X) assumes all sectors must scale proportionally. The economy is a graph of processes, not a pipeline. Subgraphs can grow independently if they don't bottleneck on inputs from non-growing sectors. AI-driven automation of physical production could create a nearly self-contained subgraph that grows at rates bounded only by raw material availability and speed of production equipment.
Models being challenged:
This post is a response to Thoughts (by a non-economist) on AI and economics and the broader framing it represents. Related claims appear across LessWrong discussions of AI economic impact:
These framings share an implicit assumption: the economy is a single integrated production function where unautomated sectors constrain growth of automated sectors. I argue this assumption breaks when an automatable subgraph can grow without requiring inputs from non-automated sectors.
There's no rule in economics that says if you grow a sector of your economy by 10x, farm fields, lawyers and doctors must then produce 10x more corn, lawsuits and medical care respectively. The industrial revolution was a shift from mostly growing food to mostly making industrial goods.
For small growth rates, and small changes, the model is mostly true in much the same way that linear approximations to a function are locally true. But large shifts break this assumption as the economy routes around industries that resist growth.
During the industrial revolution, Factories needed more workers but were competing with agriculture. Without innovation, there could have been a hard limit on free labor available to allocate to factories without cutting into food production. Instead innovations like combine harvesters and other agricultural machinery freed up farm workers for factory jobs. There's economic pressure to route around blockages to enable growth.
A better model
The economy is a graph
Structural changes to the economy can route around bottleneck to enable growth.
An illustrative case
Consider automating mining and manufacturing. We build the following:
This self contained economic core can then grow limited only by raw materials, speed of the underlying machinery and whatever it cannot produce that it has to trade for with broader economy like semiconductors or rare earths.
AI and robots don't take vacations, go to the doctor, put their kids in daycare or school. They needs chips, electricity and raw materials to grow. There will be some engineers, lawyers and lobbyists employed but not much relative to similar industrial production in the legacy economy. The system doesn't need much in the way of non-self-produced "vitamins" per unit of production.
It doesn't matter that this system hasn't replaced doctors in hospitals or convinced San Francisco to build housing. It can grow independently.
A hypothetical timeline
Full automation has the potential to massively increase productivity/growth. Right now most manufacturing output is consumer goods. Only a small fraction is machinery to replace/expand production. That machinery is often badly designed.
AI raising the floor on competence and automation would usher in absurd productivity gains. Full integration happens fast once AI replaces/convinces non-engineering trained MBAs of the stakes. Full automation/integration drops the capital cost to upgrade or build new production capacity. Things go insane.
Timelines and trajectories are hard to predict; ASI could compress everything, AI wall would stop it, AI capabilities might not generalize to optimizing manufacturing, but I think they will. Broadly, this doesn't happen or happens much slower if:
My own experience in industry and interactions with AI make me think 1) is wrong. 2) isn't an issue so long as there aren't political barriers in all countries. 3) is possible if some critical patents don't get licensed out, but lower tech out of patent technologies can usually be substituted albeit with some efficiency penalty.
Future posts I plan on writing supporting sub-points of this:
I've seen examples of in-house-produced equipment that cost orders of magnitude less than comparable equipment from vendors while being simpler, more reliable, etc.