Interesting post. Some comments from an economist.
You note,
The key economic effect of AI is that it makes capital a more and more general substitute for labour. There's less need to pay humans for their time to perform work, because you can replace that with capital (e.g. data centres running software replaces a human doing mental labour).
And also,
Let's assume human mental and physical labour across the vast majority of tasks that humans are currently paid wages for no longer has non-trivial market value, because the tasks can be done better/faster/cheaper by AIs. Call this labour-replacing AI.
These are both incredibly strict assumptions. Jobs are bundles of related tasks and traditionally when capital has been able to substitute for labor, it boosts the productivity of the jobs that remain. But more to the point, we traditionally model out substitution at marginal rates that decline at some point. Your post suggests the opposite, that it is strictly increasing at all points. What would be the conditions that give rise to this situation?
Second, as David Autor explains ina must-read paper on the topic, the demand for service jobs and other manual task-intensive work appears to be relatively income elastic. This means that when aggregate incomes go up, there is an increase in demand for these jobs as well. When all is said and done, computerization should indirectly raise demand for manual task-intensive occupations because it increases societal income. But it seems you think this will be broken.
To be clear, I think AGI will be disruptive and labor replacing, but for further work, you might want to think about the world between here and when AGI can do all jobs.
Interesting post. Some comments from an economist.
You note,
And also,
These are both incredibly strict assumptions. Jobs are bundles of related tasks and traditionally when capital has been able to substitute for labor, it boosts the productivity of the jobs that remain. But more to the point, we traditionally model out substitution at marginal rates that decline at some point. Your post suggests the opposite, that it is strictly increasing at all points. What would be the conditions that give rise to this situation?
Second, as David Autor explains in a must-read paper on the topic, the demand for service jobs and other manual task-intensive work appears to be relatively income elastic. This means that when aggregate incomes go up, there is an increase in demand for these jobs as well. When all is said and done, computerization should indirectly raise demand for manual task-intensive occupations because it increases societal income. But it seems you think this will be broken.
To be clear, I think AGI will be disruptive and labor replacing, but for further work, you might want to think about the world between here and when AGI can do all jobs.