A newly translated essay dives into the complex relationship between artificial general intelligence (AGI) and economic growth, emphasizing that advancements in technology do not automatically translate into societal prosperity. The author critically examines the notion that enhanced production capabilities will lead to increased GDP, arguing that this perspective overlooks a fundamental aspect of economics: circulation.
Economies thrive on the balance of production and demand, which relies on a widely distributed purchasing power. Ignoring this principle can lead to an unsettling reality where prosperity is unattainable for the majority. The essay draws on insights from William Blake, who articulated the essential logic of circulation during the first industrial revolution, stating that production ceases to matter if the excess is not consumed. In essence, for an economy to flourish, there must be a continuous flow of value.
Current narratives surrounding AGI often suggest that continued production will allow consumers to keep purchasing, despite significant displacement of human labor and a decline in labor incomes. This scenario is not one of abundance; rather, it paints a picture of economic stagnation where profits and opportunities are concentrated in a few sectors while the broader populace experiences scarcity.
For a truly beneficial AI-driven economy, it is crucial to consider not only how intelligent models will evolve, but also how the value generated will circulate within the market of goods and services. The focus should shift from mere automation to establishing new infrastructures and institutions that can transform potential into shared prosperity.
The essay also addresses two distinct visions of the future: one of discovery and another of labor displacement. While AI shows promise in solving longstanding challenges, such as energy sustainability and disease eradication, the mere act of discovery does not equate to economic value or widespread prosperity. The journey from discovery to market-ready products involves a convoluted process fraught with obstacles, often referred to as the "valley of death," where many promising innovations fail to reach fruition.
Moreover, as AI simplifies discoveries, there is a pressing question of distribution: who owns the means of production, has access to data, and controls market entry? If these bottlenecks remain tightly controlled, the benefits of innovation could become concentrated, leading to a form of "discovery feudalism" where breakthroughs occur, but their societal impact is limited.
Conversely, the discussion on labor displacement raises a critical concern: if AI takes over substantial intellectual work, who will be left as consumers? This question highlights a significant macroeconomic limitation often overlooked in Silicon Valley. If wages decline too quickly, economic stability falters, resulting in social unrest and a shift towards a system focused more on extracting rents than fostering genuine prosperity.
The essay underscores the importance of understanding the future customer when developing products. Historical examples, such as Henry Ford's approach to mass production, illustrate that creating mass markets requires a foundation of mass purchasing power. By paying higher wages and reducing working hours, Ford not only revolutionized the automotive industry but also contributed to the growth of a consumer economy.
As the conversation around AGI and economic growth continues, it becomes increasingly clear that the future will depend on how effectively society can navigate these challenges. The implications for the market and competitors are profound; those who prioritize broad access to the benefits of innovation may lead the way in shaping a more equitable and thriving economic landscape.
Informational material. 18+.
