I agree with the ideas of AI being labor-replacing, and I also agree that the future is likely to be more unequal than the present.
Even so, I strongly predict that the post-AGI future will not be static. Capital will not matter more than ever after AGI: instead I claim it will be a useless category.
The crux of my claim is that when AI replaces labor and buying results is easy, the value will shift to the next biggest bottlenecks in production. Therefore future inequality will be defined by the relationship to these bottlenecks, and the new distinctions will be drawn around them. This will split up existing powers.
In no particular order, here are some more-concrete examples of the kind of thing I am talking about:
Since AI is the major driver of change, the best candidate bottlenecks are the ones for wider deployment of AI. See how Nvidia is now the 2nd or 3rd largest company in the world by market cap: they sell the compute upon which AI depends. Their market cap is larger than any company directly competing in the current AI race. The bottlenecks to compute production are constructing chip fabs; electricity; the availability of rare earth minerals.
About regular human welfare: the lower this goes, the less incentive there is for solidarity among the powers that be. Consider the largest company in the world by revenue, Walmart, who is in the retail business. Amazon is a player in the AI economy as a seller of compute services and through their partnership with Anthropic, but ~80% of their revenue comes from the same sector as Walmart. Right now, both companies have an interest in a growing population with growing wealth and are on the same side. If the population and its buying power begins to shrink, they will be in an existential fight over the remainder, yielding AI-insider/AI-outsider division. See also Google and Facebook, who sell ads that sell stuff to the population. And the agriculture sector, which makes food. And Apple, largest company in the world by market cap, who sells consumer devices. They all benefit from more human welfare rather than less; if it collapses they all die (maybe except for the AI-related parts). Is the weight of their (current) capital going to fall on the side of reducing human welfare?
I also think the AI labor replacement is initially on the side of equality. Consider the law: the existing powers systematically crush regular people in courts because they have access to lots of specialist labor in the form of lawyers. Now, any single person who is a competent user of Claude can feasibly match the output of any traditional legal team, and therefore survive the traditional strategy of dragging out the proceedings with paperwork until the side with less money runs out. The rarest and most expensive labor will probably be the first to be replaced because the profit will be largest. The exclusive access to this labor is fundamental to the power imbalance of wealth inequality, so its replacement is an equalizing force.
The bottlenecks to compute production are constructing chip fabs; electricity; the availability of rare earth minerals.
Chip fabs and electricity generation are capital!
Right now, both companies have an interest in a growing population with growing wealth and are on the same side. If the population and its buying power begins to shrink, they will be in an existential fight over the remainder, yielding AI-insider/AI-outsider division.
Yep, AI buying power winning over human buying power in setting the direction of the economy is an important dynamic that I’m thinking about.
I also think the AI labor replacement is initially on the side of equality. [...] Now, any single person who is a competent user of Claude can feasibly match the output of any traditional legal team, [...]. The exclusive access to this labor is fundamental to the power imbalance of wealth inequality, so its replacement is an equalizing force.
Yep, this is an important point, and a big positive effect of AI! I write about this here. We shouldn’t lose track of all the positive effects.
Yes, but so are ice cream trucks and the whirligig rides at the fair. Having “access to capital” is meaningless if you are buying an ice cream truck, but means much if you have a rare earth refinery.
My claim is that the big distinction now is between labor and capital because everyone had about an equally hard time getting labor; when AI replacement happens and that goes away, the next big distinction will be between different types of what we now generically refer to as capital. The term is uselessly broad in my opinion: we need to go down at least one level towards concreteness to talk about the future better.
I agree with the ideas of AI being labor-replacing, and I also agree that the future is likely to be more unequal than the present.
Even so, I strongly predict that the post-AGI future will not be static. Capital will not matter more than ever after AGI: instead I claim it will be a useless category.
The crux of my claim is that when AI replaces labor and buying results is easy, the value will shift to the next biggest bottlenecks in production. Therefore future inequality will be defined by the relationship to these bottlenecks, and the new distinctions will be drawn around them. This will split up existing powers.
In no particular order, here are some more-concrete examples of the kind of thing I am talking about:
Since AI is the major driver of change, the best candidate bottlenecks are the ones for wider deployment of AI. See how Nvidia is now the 2nd or 3rd largest company in the world by market cap: they sell the compute upon which AI depends. Their market cap is larger than any company directly competing in the current AI race. The bottlenecks to compute production are constructing chip fabs; electricity; the availability of rare earth minerals.
About regular human welfare: the lower this goes, the less incentive there is for solidarity among the powers that be. Consider the largest company in the world by revenue, Walmart, who is in the retail business. Amazon is a player in the AI economy as a seller of compute services and through their partnership with Anthropic, but ~80% of their revenue comes from the same sector as Walmart. Right now, both companies have an interest in a growing population with growing wealth and are on the same side. If the population and its buying power begins to shrink, they will be in an existential fight over the remainder, yielding AI-insider/AI-outsider division. See also Google and Facebook, who sell ads that sell stuff to the population. And the agriculture sector, which makes food. And Apple, largest company in the world by market cap, who sells consumer devices. They all benefit from more human welfare rather than less; if it collapses they all die (maybe except for the AI-related parts). Is the weight of their (current) capital going to fall on the side of reducing human welfare?
I also think the AI labor replacement is initially on the side of equality. Consider the law: the existing powers systematically crush regular people in courts because they have access to lots of specialist labor in the form of lawyers. Now, any single person who is a competent user of Claude can feasibly match the output of any traditional legal team, and therefore survive the traditional strategy of dragging out the proceedings with paperwork until the side with less money runs out. The rarest and most expensive labor will probably be the first to be replaced because the profit will be largest. The exclusive access to this labor is fundamental to the power imbalance of wealth inequality, so its replacement is an equalizing force.
Chip fabs and electricity generation are capital!
Yep, AI buying power winning over human buying power in setting the direction of the economy is an important dynamic that I’m thinking about.
Yep, this is an important point, and a big positive effect of AI! I write about this here. We shouldn’t lose track of all the positive effects.
Yes, but so are ice cream trucks and the whirligig rides at the fair. Having “access to capital” is meaningless if you are buying an ice cream truck, but means much if you have a rare earth refinery.
My claim is that the big distinction now is between labor and capital because everyone had about an equally hard time getting labor; when AI replacement happens and that goes away, the next big distinction will be between different types of what we now generically refer to as capital. The term is uselessly broad in my opinion: we need to go down at least one level towards concreteness to talk about the future better.