The idea of “absolute advantage” is rather problematic to begin with, and is generally based on an incomplete analysis. Take your hypothetical, for instance. If the AI for some reason want a cat video, why in the world would it trade you two hamburgers for one? That’s ridiculous. Your hypothetical clearly posits that joules are transferable (otherwise, considering the possibility of the AI dispossessing you of them doesn’t make sense). So while this trade leaves both you and the AI better off compared to the “no interaction” alternative, it leaves both of you worse off than if the AI had spent 15 joules making three hamburgers, traded them to you for 100 joules, and then made a cat video. Your analysis of the AI’s “absolute advantage” considers the economy as having only two commodities, when it clearly has at least three. A joule costs you 0.0001 hamburgers. A joule costs the AI 0.2 hamburgers. You have a comparative advantage in joules, so you should trade them for hamburgers and cat videos. There is no Pareto Optimal scenario that involves you making hamburgers or cat videos.
There is no Pareto Optimal scenario that involves you making hamburgers or cat videos.
This makes sense, but made me confused about how the standard comparative advantage argument for trade, i.e., with two humans or two countries, works, and why it doesn’t run into the same kind of conclusion. Turns out the confusion is justified. This 2007 paper, A New Construction of Ricardian Trade Theory, claims that all prior models of comparative advantage had the following problems:
On the contrary, the
models so far analyzed had two crucial defects. (1) Inputs were restricted to labor as a
unique factor and no material inputs were admitted. This implied that intermediate goods
were excluded from any theoretical analysis of international trade. (2) Choice of
techniques was not admitted. This is what is necessary when one wants to analyze
technical change and development.
It’s usually available for free at the linked address, but apparently the server is down for maintenance. I didn’t save a copy but the message says the system will be back on Monday.
The idea of “absolute advantage” is rather problematic to begin with, and is generally based on an incomplete analysis. Take your hypothetical, for instance. If the AI for some reason want a cat video, why in the world would it trade you two hamburgers for one? That’s ridiculous. Your hypothetical clearly posits that joules are transferable (otherwise, considering the possibility of the AI dispossessing you of them doesn’t make sense). So while this trade leaves both you and the AI better off compared to the “no interaction” alternative, it leaves both of you worse off than if the AI had spent 15 joules making three hamburgers, traded them to you for 100 joules, and then made a cat video. Your analysis of the AI’s “absolute advantage” considers the economy as having only two commodities, when it clearly has at least three. A joule costs you 0.0001 hamburgers. A joule costs the AI 0.2 hamburgers. You have a comparative advantage in joules, so you should trade them for hamburgers and cat videos. There is no Pareto Optimal scenario that involves you making hamburgers or cat videos.
This makes sense, but made me confused about how the standard comparative advantage argument for trade, i.e., with two humans or two countries, works, and why it doesn’t run into the same kind of conclusion. Turns out the confusion is justified. This 2007 paper, A New Construction of Ricardian Trade Theory, claims that all prior models of comparative advantage had the following problems:
I wish the paper was available to read. Do you have a copy available?
It’s usually available for free at the linked address, but apparently the server is down for maintenance. I didn’t save a copy but the message says the system will be back on Monday.
It’s still better for the AI to take all your joules, let you starve, and make cat videos.
This is where the points about minimal human requirements comes up. And, as mentioned, the AI would still want to steal all your joules if it could.