You don’t really need a paper to tell you this. We have been making fun of this exact short sightedness for years. That is shareholders for you, they only care about short term income.
A Pigouvian tax is a tax on a market activity that generates negative externalities, that is, costs incurred by third parties. It imposes costs corresponding with the externalities, internalizing those costs to improve Pareto efficiency.
Ideally, the tax is set equal to the external marginal cost of the negative externalities, in order to correct an undesirable or inefficient market outcome (a market failure).
Yeah, it sounds like a good idea, maybe it’ll be implemented as a VAT on LLMs. There’s also the thing that AI subscriptions are subsidised up to 90% currently so when the bubble pops workers become more competitive when you’re paying 2k USD per month instead of 200. Not to mention that LLMs themselves are subsidised by electrical grid upgrades and tax exemptions to attract data centers.
Pigouvian tax is not used enough IMO. LLMs are having a negative effect on the economy so the negative effect should be taxed highly and tax revenue redistributed. RIP for people in the USA where it just goes to military spending.
“That might happen to all those other companies, but it won’t happen to us. We’re better.”
Frankly, imagining our corporate overlords to be deluded in that way is giving them too much credit.
The business model of the billionaire caste for decades has been to buy a company, loot it of everything valuable, leave what’s left to collapse and go bankrupt, use the “losses” to write off their own taxes, use the profits to buy more companies, and repeat.
The billionaire caste doesn’t give a shit if companies they own go out of business and leave all their employees jobless. They plan on doing that anyway. AI just speeds it up.
Good ol’ leveraged buyouts. Favored by corps with “equity” or “capital” in their names.
Valid. I keep telling people that about Trump’s casino bankruptcies. It wasn’t bad business, it was deliberate. Loot the casino of every bit of profit, launder as much illegal cash as possible, stiff your creditors, file for bankruptcy, discharge all the debts, and rinse and repeat.
It wasn’t bad business, it was a successful business model.
For the only people that really matter in the World. Behind every great fortune is a great crime.
They don’t actually believe a single word they say. They’re just too scared to stand up to their shareholders.
Well, actually, they do believe it. They’re just delusional. Because they’re too scared to stand up to their shareholders.
That might happen to all those other economies, but it won’t happen to ours. We’re better
While having studies is important, this is completely obvious if you think about it for more than a few minutes. AI replaces workers, workers lose jobs and can’t buy food, therefore products that ai is creating can’t be bought, therefore those companies collapse, et al.
It goes deeper than that.
AI replaces entry level workers, but AI is less productive than even moderately experienced workers, so it actively harms whatever firms utilize it because they don’t have entry level workers to become experienced. It’s entirely parasitic. AI isn’t good at its job, it’s merely good enough. Replace enough of the economy with “good enough” and suddenly it isn’t good enough anymore.
I mean, the paper doesn’t just state the obvious, it also evaluated which policies can and can’t be used to avoid this scenario.
This has been baffling me since the whole layoffs craze started in the '80s. It’s incredibly obvious that high unemployment is bad at every level for everybody including the companies “saving” money by laying everybody off.
I don’t understand how this needs a Ph.D. to figure out.
Henry Ford figured that out in the 1920s. At a time when it was normal to work 10 hours a day 6 days a week, Ford reduced his workers’ hours to 8 hours a day 5 days a week while paying them more per week worked, because he recognised that well-paid workers with free time buy more stuff, thus making him even richer. That’s especially impressive considering the union were pushing for the 8-hour day and the Jews were the ones seeking Saturday off; higher psy and shorter hours were so compelling they overcame Ford’s notorious raging hatred of unions and of Jews.
There’s probably also a tragedy of the commons kind of situation. Yes, it’s bad, but everyone else is doing it so you have to as well. If 99% of people do it and you don’t, you’re even worse off than everyone else.
Economics often turns into a terrible social policy.
The problem is that every company treats this as an externality
Indeed. It’s almost as if greed and shortsightedness were a bad foundation for a society.
In this specific current case, imagine collapsing the economy is the point and purpose.
In previous decades, instability always benefits businesses. Laid off people are hungry and will take the same jobs for less pay.
This is the techno feudalism version of that.
What is the best piece of evidence (or cory doctorow article) you know that supports that AI Investment is driven by people who want to use it to supersede capitalism specifically by collapsing the economy, and not just by exactly what the paper says, which is that (because I believe that Investors are capable of creating greed at large scale because each holds only pieces of the pie) they want to use it for the canonical Stonks™ reason (and capitalism is horrible at coordination problems)? Googling Technofeudalism doesn’t immediately help,but I’ve read that the elements of 21st C capitalism are rent-seeking, the intersection between surveillance and market research, and big tech platforms.
The magic word that will tie it all together for you is TESCREAL.
I don’t have good articles to share on this. I feel like a lot of what I’ve read is scattered data largely. But this is the single best source I’ve seen as she brings the receipts with the actual tech bros literally talking about their plans for years.
I think the promise is you can increasingly sell b2b instead of to lowly hunger serfs.
And with our insane wealth concentration that’s the next step.
At some point those businesses need workers. It doesn’t matter if you’re selling b2b 500 companies deep, at the end there’s a human buying a product and there’s humans building that product.
Ok, maybe AI is not all bad then.
AI would be a dream if we lived under Marxism, we would be cheering for it at every corner because WE WOULD WANT IT TO TAKE ALL OUR JOBS, sadly under capitalism AI just means the rich get incredibly richer while the rest of us get to fucking die.
What’s stopping you from making Marxist AI? People have made 9B models that are really really good.
In a very small lab.
Get a spiced up dekstop PC, and you can train a small AI.
Time would be better spent overthrowing the capitalists at this point than doing that.
If you manage to create a decent enough AI, you can do amazing material science research.
Though not the chatbot kind of AI.
Great find, thank you for sharing this.
Why is this a paper? Just go to the Wikipedia page for Cyclical Depression
This is why it’s a paper.
Because it’s not just about cyclical depression. There’s nuance in the rest of the paper.
