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AI capex is so big that it's affecting economic statistics

(paulkedrosky.com)
358 points throw0101c | 1 comments | 18 Jul 25 19:59 UTC | HN request time: 0.638s | source
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gitfan86 ◴[19 Jul 25 01:06 UTC] No.44611591[source]▶
The counterintuitive part of automation is that it removes parts of the economy rather than making the economy bigger. You end up with more goods but the value people assign to them goes down as they don't provide additional social advantage.

For example at one point nails were 0.5% of the economy and today owning a nail factory is a low margin business that has no social status.

Similarly the percentage of the economy and social status associated with frontend software dev will get automated and become a smaller percentage of the economy.

Since social status is a zero sum game people increase spending in other areas where social status can be helped.

replies(2): >>44612664 #>>44614149 #
1. tuatoru ◴[19 Jul 25 10:13 UTC] No.44614149[source]▶
Front-end software dev, call centers, HR, administration like health insurance and eventually some government bureaucracy, law, education, marketing, mass-market entertainment, banking and other financial services, business consulting, financial advice and accounting services, journalism, and probably other smaller employers.

Potentially all of those, and more, become smaller employers in relative terms.

A better nail-making machine is a single-purpose technology. It's not going to affect productivity much in unrelated industries such as healthcare, for example.

AI is a general-purpose technology like electric light or electric motors. It has the potential to improve productivity in a great many productive activities.

As another person said here, even if progress in AI stopped now, we have twenty years' sustained productivity growth ahead of us in adapting processes to use AI more effectively across the whole economy.

Whether the economy as a whole grows or shrinks depends mainly on whether households will buy more entertainment, legal services, financial services, or all the rest because they are now cheaper, and to a lesser extent on whether we can discover new things that households want to buy.