There are some who will dispute the idea that AI is going to completely obliterate jobs. This is something that becomes clear when we look at the labor/captial equation. It is the topic of this article.
Many assert that AI is slowing down. This is not true. While there could be some slowing of data available, this is compensated by the advancements that software engineers are making with algorithms.
Then we have GPUs. Not only are they expanding at a profound rate, the capabilities (processing power) is also growing. Nvidia's Blackwell series is far more energy efficient and contain a lot more pop than those released under the Hopper line.
AI discussions bring up the question of a post-monetary future. It is a likely outcome at some point. That said, it is probably we see that many decades from now.
Before reaching that state, we have something that is actually the reverse.
We will look at the impact of capital and how it is the driver of all.
Image generated by Ideogram
AI is a big money game. It is why Big Tech is the dominating factor at this point.
The pace of advancement is unrecognizable. This makes Moore's Law look like it is moving at a snail's pace.
Where this becomes a challenge is the impact on the job market and, in turn, the structure of the economy. We operate in a world that where labor is an important component of the equation. That might not be the case by the end of the decade.
Instead, the driving force will be capital. That is how things change completely. It also can be the path for a dystopian future.
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).
It is best to think of AI as skills. The output of a model is some type of skill. AI agents are an example of how this will be constructed.
Therefore, capital is utilized to basically acquire skils. This is a long time facet of our economy. The difference is, throughout history, the skills were acquired by paying people.
With generative AI, we are finding that the capital is used to construct systems that can create said skills.
Rinse and repeat.
Unfortunately, this is the impact:
The ability to buy results in the real world will dramatically go up
Human ability to wield power in the real world will dramatically go down (at least without money); including because: there will be no more incentive for states, companies, or other institutions to care about humans it will be harder for humans to achieve outlier outcomes relative to their starting resources
Radical equalising measures are unlikely
If you think labor has little-to-no voice now, just wait.
The financial benefits of AI is captured by those who own the system. At this point, it is Big Tech. Of course, this will also fall along geographic lines.
China and the United States are the two leading countries in this area. That means they will capture the majority of the productivity gains. Even if those countries implement a sharing mechanism, it will be within their borders.
What happens to something like the EU?
The solution to a lot of the problems are massive productivity gains. AI and robots offers that.
To frame this, we will look at births and robots. Accoding to the CDC, there were 3.6 million births in the US . Elon Musk recently did an interview where he projected Tesla would produce 500K robots in 2027. That means, if accurate, one company would output 1/7 the total birth rate. That is only a couple years away.
Who else is going to be producing humanoid robots? More importatly, what do these numbers look like in 2029 or 2030? There are many companies investing heavily in this sector. It is likely to produce some significant results.
When we look at this combined with AI, it is a pathway to an economic singularity. By 2040, do not be surprised if the annual growth rate is 30% (as compared to the 3%).
The net result is a whole lot of wealth is about to be generated.
Here is where crypto becomes so important. While most focus upon the markets, the most valuable aspect is ownership. This is a completely new ownership structure as compared to our present system. It also offered a third choice when it comes to distribution of the means of production.
Most debates simply boil down to the private sector versus the government. Our systems are designed to offer one or the other. While there are nuances to each, any of our established structures fall into one of these categories.
Crypto introduces us to communal ownership. We can think of this as a cooperative, just one that scales. Traditionally those were related to local areas, such as a housing development. Outside that, the ability for nefarious actors to assert themselves became to easy.
What we are basically saying is that, in a world of "superintelligence", the production output is going to skyrocket. However, our present forms of economic capture are insufficient.
This is compounded by the fact that networks will become the new states. Geography is going to be a lot less as AI expands. Crypto is a global system, offering inclusion to anyone who is online. governments, of course, try to stop this, which is why that system is broken.
And with the "winner take most" results, Big Tech having free reign is not enviable either.
I have stated that AI and crypto go together. This will be the case as long as AI finds its way to crypto networks.
Decentralization is crucial. The age we are entering has to include an abundance of networks. We cannot replicate Web 2.0 whereby a handful of companies run most everything.
Having a network is not enough. We need to see all the components of AI built on them. There has to be alternatives to data, models, and compute.
It is a race to some degree with high stakes. Major technology firms are rolling out powerful models that can do more with each iteration. Many are now getting into robotics, which opens up real world data. This brings them into the realm of unlimited data.
How many start ups are going to build a functional robot and collect huge volumes of data?
This is where the communal aspect enters. By filling a network up with data, algorithms, AI agents, and powering it with a lot of distributed compute, we can see how an alternative can form.
Does a system like this have the ability to provide each member with $500K? This is something we will take a look at in the next article.
