Post-AGI Economics: Capital, Labor, and Societal Impact

[00:00:00]what happens in the weeks months and years after we achieve AGI what happens to the economy what happens to people's Ambitions all of these questions I've been thinking about and I really haven't talked much about it on this channel and so that's what I want to talk about today I found this really great article on the less wrong blog and I want to go over it with you and give you my thoughts on it so let's get right into it so here's the blog by default Capital will matter more than ever after AGI it just came out a few days ago and it's by L rud rol L I couldn't find much information about this author but I'll drop their links that I did find in the description below now to set the scene a lot of people think once AGI is truly achieved and at production scale we will effectively have infinite resources because we'll have infinite thought labor and infinite manual labor through artificial intelligence and humanoid robots so he gets into really deep economic topics here and so I'm going to try to explain it as best I can so let's start reading he starts by saying I've heard many people say something like money won't matter post AGI this has always struck me as odd and as most likely completely Incorrect and he makes really strong points as to why that's the case and I've heard Dave Shapiro who's talked about post AGI economics on his channel quite a bit call out this same thing all right so first he defines what labor actually means labor means human mental and physical effort that produces something of value so whether you're producing something on a factory floor or you're a content creator like myself an engineer whatever that is capital goods are things like factories data centers and software things humans have built that are used in the production of goods and services now here's the Crux of his argument the key economic effect of AI is that it makes capital a more and more General substitute for labor meaning if you have this entity which you can essentially just pay for infinite labor both mental labor and physical labor then the capital itself the money is the only thing that matters at that point human labor is not important because you can just choose to pay AI to produce the same value as a human would there's less need to pay humans for their time to perform work because you can replace that with capital basically paying Ai and this is a really big idea here and this is something that we're going to have to contend with in the very near future and so he says labor replacing a I means and human labor is what he means the ability to buy results in the real world will dramatically go up human ability to wield power in the real world will dramatically go up at least without money including because there will be no more incentive for States companies or other institutions to care about humans and by the way by reading this I'm not saying I agree I'll try to give you my thoughts but I'm also trying to figure out where I stand along with you so I'm trying to understand what his point is of many different perspectives on these issues and B it will be harder for humans to achieve outlier outcomes relative to their starting resources and number three radical equalizing measures are unlikely and so overall he actually thinks this is quite a negative outcome and based on his reasoning it makes sense he argues that societies become Static permanently static and whatever position in life that you've had in the past it'll be really hard if not impossible to move up from there essentially because your current capital is your value so current power imbalances might be Amplified and turned immutable but he says this isn't about just surviving so given sufficiently strong AI this is not a risk about insufficient material comfort so just the everyday things that people will need to have they'll have governments could Institute Ubi with the AI derived wealth so we're going to have all of this artificial intelligence essentially producing infinite resources and from those infinite resources governments can Institute Ubi Universal basic income essentially just paying everybody to live now I'm still trying to figure out how I feel about Ubi in general I feel two ways one it makes sense if you have infinite value created by AI you should distribute it just to let people live but at the same time when you do that something tells me that human Innovation and desire to create will go away he goes on to talk about even if the United States alone is the sole winner of the artificial intelligence race captures all of its value he believes that there will be enough wealthy people who care about the rest of the world in the United States to end material poverty simply by the fact that they will be giving away money to everybody and kind of a rising Tides lift all boat scenario and before we're in the post AGI world where seemingly nothing matters let me tell you about something that really matters the partner 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throughput they also have oneclick installation of all the applications you might need for advanced machine learning workloads allowing you to get up and running in minutes not hours so experience the vulture difference don't get bogged down by severe weight times or limited locations try it free today with a $300 credit for your first 30 days when you visit get vulture.com Burman and make sure to use code Burman 300 checkout to get that credit thanks again to vulture for sponsoring this video now he actually put this section in parenthesis and I found it fascinating so let me read it to you if 1% of American billionaire wealth was spent on wealth transfers to foreigners it would take 16 doublings of American billionaire wealth as expressed in purchasing power for human needs a roughly 70,000 times increase before they could afford to give $500,000 equivalent to every person on Earth in a singularity scenario where the economy's doubling time is months this would not take long so kind of crazy numbers to think about but again if we're talking about AGI if we're talking about the intelligence explosion these numbers might not be that crazy but he counters with if the intelligence explosion is not Singularity like meaning it is not completely explosive then there's a chance that just material Comfort might actually be an issue so he's really betting on the fact that the intelligence explosion will be an explosion he goes on to say and I agree with this what most emotionally moves me about these scenarios is that a static Society with a locked in ruling cast does not seem dynamic or Alive to me we should not kill human ambition if we can help it now he thinks human ambition will be killed by the fact that if you can't move up in the world why would you have ambition and you know what of course that makes a lot of sense but I think there's another angle to which human ambition can be killed if there's no need to create if there's no need to move up in the world if you just have everything you ever needed why would you have ambition why would you want to create something new and really make huge sacrifices to yourself your life your health to create something new for the world which many people do right now all right so next he talks about what he calls the default solution and he starts by saying let's just assume that essentially all human mental and physical labor has no more value or very trivial value essentially because AI can do it better whether that's robots or digital AI he says okay well there's two levels in the standard Solution One governments will adopt Universal basic income so essentially there's infinite resources infinite value created by AI so we're just going to pay everybody to live and two we will quickly hit super intelligence and assuming the super intelligence is aligned big Assumption of course live in a post scarcity technological Wonderland where everything is possible yeah that's what I want I tend to be very optimistic I'm hoping that is the outcome I think it'll probably be something like that I also don't want to seem naive and just think that everything's going to work out and we don't have to work at it he goes on in this scenario to say money will continue to be a thing unless we have one single AI system doing all economic planning which is possible prices are largely about communicating information so if there are many actors and they trade with each other the strong assumption should be that there are prices that there will be prices even if humans do not see them or interact with them of course if there's any kind of trading there's a market if there's a market there's prices so remember too that however sharp The Singularity abundance will still be finite and must therefore be allocated now I don't know if abundance will still be finite if we end up leaving Earth obviously if we're constrained by Earth's resources then yes abundance even extreme abundance will be finite but if we start being a multiplanetary species then maybe it won't be finite it will be infinite and next he argues something which I never actually explicitly put into terminology like this but I dealt with quite a bit while building a startup and his argument is money currently struggles to buy Talent meaning even if you have all the money in the world the best people at whatever the job is aren't always necessarily driven by whoever is going to pay them the most and that was definitely the case in Silicon Valley the top companies in Silicon Valley Google meta Apple Microsoft they all pay top salaries they have comfy packages you get all the amenities you can ever imagine massages and free food every day your laundry is done for you gyms on campus but a lot of those companies are losing that top talent to people going to start their own startup or joining very early startups and that's because for some people just getting paid the most is not enough they want to be part of a mission they want to be part of a purpose they want to work on the coolest hardest problems with other incredibly smart people and these larger companies sometimes slow down they often run into the innovator's dilemma and so his point is well received by me I agree completely so listen to his example consider blue origin versus SpaceX blue origin was started 2 years earlier had much better funding for most of its history and even today employs almost as many people as SpaceX yet SpaceX has crushingly dominated blue origin in 2000 Jeff Bezos had 4.7 billion at hand but it is hard to see what he could have done not to lose out to the comparatively money poor SpaceX with its intense culture and outlier Talent so there is something to be said about the culture the culture typically starts from the top the top is Elon Musk if you want to convert money into results the deepest problem you are likely to face is hiring the right Talent couldn't agree more and here are the issues with getting the top talent all of which I've experienced it's often hard to judge talent unless you yourself have considerable talent in the same domain this is critical if you are going to start a company especially in the software space you better be an expert at whatever you're starting so for me it took learning the code because I found that I was just relying on somebody else to build whatever my idea was and I couldn't always trust that this was the best code or they were moving at a speed that was satisfactory to me so I just learned to code and then all of a sudden when I learned to code I was able to hire other people who I can clearly see were much better than me at coding number two Talent is rare and it's not only that Talent is rare they're also being pulled in a thousand different directions they have every option Under the Sun and even if you can locate the top talent the top talent tends to be less amendable to being bought out by money than others very true this is all very well-known information in Silicon Valley but with labor replacing AI these problems go away and that is a big problem so first you might not be able to judge AI Talent even the AI evals ecosystem might find it hard to properly judge evals are hard but the real difference is that AI can be cloned currently huge pools of money chase after a single star researcher who's made a breakthrough and thus had their talent made legible to those who control money but the star researcher that is an AI can just be cloned so that's the difference between humans and AI you can just clone the best AI so everyone or at least everyone with enough money to burn on gpus gets the AI star researcher so this is the intelligence explosion part of the situational awareness paper where as soon as AI starts being able to do Cutting Edge research and then applying that research to itself that's when we have the intelligence explosion because we can essentially infinitely scale up these AI researchers and that means if you have the most money you can simply buy the most gpus and clone the best AI so this is his point this is why he says in this post AGI World Things become much more static then of course the price of talent will go down massively because the AIS will get cheaper than the equivalent human labor and because competition will be fiercer because the AI can be cloned he goes on to say the final bottleneck for converting money into Talent is that people have preferences and usually complex preferences it's not enough to just say well this company's paying me 300,000 a year this other company is paying me $31,000 a year so obviously I'm going to go with them there's many more factors that go into a decision and too many to even list right now often times the best talent as I mentioned is following expertise passion a mission they want to work with the best talent but AI is not that way you simply pay the most you get at the best AIS exist specifically so that they can be trivially bought out at least within the bounds of their safety training the genius AI mathematician unlike the human one will happily spend its limited time on Earth proving the correctness of schle code and eventually AI is just going to be better than every human so if AI is getting cheaper and cheaper better and better then capital is really the only thing that matters because whoever can buy the most AI will get the best results now we start getting into what makes people tick so most people's power leverage derives from their labor I could say that's the case for me it's not only my power leverage but it's also my identity and I'm trying to make that less so but in the past especially when I was running companies my identity was so closely tied to the thing that I was doing my work it wasn't actually very healthy for myself and I'm again trying to get out of that but still to this day what makes me tick is what I do for work labor replacing AI also deprives almost everyone of their main lever of power and leverage most obviously if you're the average Joe you have money because someone somewhere pays you to spend your mental and or physical efforts solving their problems but wait we assumed that there's Ubi problem solved right maybe not so now he starts to talk about why States take care of people States being governments so Ubi is granted by states that care about human welfare there are many reasons why States care and might care about human welfare and this has been more of a recent phenomenon or in the last few centuries so the reasons why they started to care more and more about human welfare moral changes Downstream of the Enlightenment in particular increased centering of liberalism and individualism affluence in technology and incentives for states to care about Freedom prosperity and education but again AI might break this model AI will help a lot with the second Point yes it will will have some complicated effect on the first yes but here I want to dig in a bit more into the third because I think at this point is under appreciated so since the Industrial Revolution the interests of states and people have been unusually aligned a strong State needs efficient markets a good education system that creates skilled workers and a prosperous middle class that creates demand it benefits from using Talent regardless of its class origin it also benefits from allowing high levels of freedom to Foster science technology in the Arts and media that result in Global Soft power and cultural influence so this is just setting the scene as to why states have been aligned with human interests at least up till this point he goes on to say but with labor replacing AI the incentives of states in the sense of what action States should take to maximize their competitiveness against other states and or their own power will no longer be aligned with humans in this way and he Compares it to the time of feudalism so he says during feudalism the incentive was to to extract as much as possible from The Peasants without them dying after Labor replacing AI humans will be less a resource to be mind and more just irrelevant God that is a scary thought however spending fewer resources on humans and more on the AIS that sustain the state's competitive Advantage will still be incentivized and that is where the loop closes that is the really potentially bad outcome humans will have less leverage Over States because they're less valuable yes and their incentives are less aligned with the states so of course they're going to have less leverage over the states once AI can do all the labor that keeps the economy going and the military powerful the state has no more deao reason to care about the demands of its humans okay so now he's going to illustrate why he believes that there are not going to be any more outlier outcomes and what does that actually mean outlier outcomes means somebody who didn't necessarily start with money or power figured out how to create a lot of value and then all of a sudden becomes an Insider with money and power and whatever their perspective that they brought from the outside that is the major change that people typically see in the world but of course we already know where this is going if people aren't able to make these massive improvements in their status in life then how will we see change in the world they're not moving up they're not bringing new ideas to the inside and thus we're not going to see major idea changes so he gives a few examples of outlier success and one is entrepreneurship something that is obviously near and dear to my heart so I found this really interesting I'd never heard this before entrepreneurship is increasingly what Matt Clifford calls the technology of ambition which I absolutely love that phrase entrepreneurship has become easier AI tools already make small teams much more effective without needing to hire new employees this is very true there have been many predictions that we're going to see the first billion dooll company with just one person and I think that's great and that doesn't necessarily mean we're going to hire less people in my mind that means we're going to have many more startups they also reduce the entry barrier to new skills and Fields however labor replacing AI makes the tenability of Entrepreneurship uncertain there is some narrow World in which AIS remain mostly tool likee and entrepreneurs can succeed long after most human labor is automated because they can provide agency and Direction however it also seems likely that sufficiently strong AI will by default obsolete human entrepreneurship that is horrible I I really hope that never happens for example VC funds might be able to directly convert money into hundreds of startup attempts all run by AIS without having to go through the intermediate route of finding human entrepreneurs to manage the AIS for them and let's pause for a second and think about what the five levels of intelligence are as defined by open AI so here it is level one chat box thoughts AI conversational language that's what we have right now level two reasoners human level problem solving we kind of have that now especially with the 01 and O3 models level three agent systems that can take actions we're kind of right in the middle or on the verge of reaching that then level four innovators AI that can Aid invention that's what we're talking about in this article and then here's level five as defined by open AI organizations AI that can do the work of an organization so an entire organization that is created and run by AI so imagine you are a VC you have all of the capital you simply hire a team of AI to create new ideas to create Innovation and all of a sudden you don't need the human entrepreneurs anymore another area of outlier success the hard sciences and now we've referred back to the fourth level in that chart that I just showed you if AI is able to be on The Cutting Edge of Science and Math and is actually discovering new science and new math then we would just scale up that Ai and it would be able to do so discover new science new math much more quickly than any human scientist or mathematician would and so at that point that is kind of made obsolete as well same with intellectuals it's literally the same category he does say that politicians might be one of the least affected options which kind of makes me sad I'd guess that most humans specifically want a human to do that job and because politicians get to set the rules for what's allowed goes on to talk about military religions and a few other things but I'm going to skip over those if you want to check out the full article please do I will drop the link in the description below all right so what happens here if we are in this permanent cast system and nobody can move up then how do we actually fix it well he thinks enforced equality is unlikely so imagine that labor replacing AI is here Ubi is passed so no one is starving there's a massive scramble between countries and companies to make the best use of AI this is all capital intensive so everyone needs to woo holders of capital the top AI companies wield power on the level of States kind of maybe already seeing a little bit of that the redistribution of wealth is unlikely to end up on top of the political agenda now here's the key argument even if the future is a glorious transhumanist Utopia it is unlikely that people will be starting in it at an equal footing due to the previous arguments it is also unlikely that they will be able to greatly change the relative footing later on so what are the default outcomes so Grant the assumptions at the start of this post and the above analysis then the post labor replacing AI World involves money will be able to buy results in the real world better than ever people's labor gives them less leverage than ever before achieving outlier Success Through Your labor in most or all areas is now impossible there was no transformative leveling of capital either within or between countries so if you have money you're going to be able to make more money if you don't have money it's going to be difficult if not impossible to move up and gain more money since AI is smarter more efficient cheaper than human labor then that's what is going to be used so humans will have less and less leverage because there's not much incentive for you to have an outlier success and really a bunch of things preventing you from having outlier success that's not going to be much of a thing anymore and most likely there's not going to be any leveling of capital so what are the best cases and worst cases as predicted by this author in the best case this is a world like a more unequal unprecedentedly static and much richer Norway a massive pot of non-human labor resources oil AI has benefits that flow through to everyone and yes some are richer than others but everyone has a great standard of living so he basically just Compares it to a big Norway the only realistic forms of human ambition are playing local social and political games within your social network and class if you don't have a lot of capital you don't have a lot of chance of affecting the broader world anymore the worst case scenario AI trillionaires have near unlimited and unchecked power and there's a permanent aristocracy that was locked in based on how much Capital they had at the time of Labor replacing AI the power disparities between classes might make modern people shiver much like modern people consider feudal status hierarchies grotesk so I found all of this to be absolutely fascinating again I'll drop the full link to the article down below now now there's one more thing I want to talk about because he doesn't necessarily touch on one last Point let's say everyone gets infinite resources they essentially get all the money they would ever need and they no longer have to work that is a possible outcome from AGI and I want to show an example of a post that I came across just a day ago so V houth who was the founder of loom which was acquired said I am rich and I have no idea what to do with my life I talk about leaving Loom giving up $60 million laring as on breaking up with my girlfriend insecurities a brief stint at Doge and how I'm now in Hawaii self-studying physics now I read this whole thing I'm not going to do that right now I'll drop it down below but basically what this post is about is this person essentially all of a sudden had a tremendous amount of wealth to the point where he no longer has to work ever again in his whole life and he thought he knew what to do after that he started to start a new company around robotics but then just realized I'm not that into it and he continues to just not be that into things and he broke up with his girlfriend and moved to Hawaii and now he's self-studying physics but here's the thing when you all of us sudden have infinite resources essentially infinite resources where does your ambition come from where does that drive come from and so I think maybe some people will just have that drive inherently but again if everything is solved if there are no hard problems out there anymore that AI can't do better than you what are we going to do as humans especially the most ambitious humans and so I actually uh tagged Dave Shapiro in this to get his thoughts so I'm going to finish on that so I said what are your thoughts on this one it's no surprise that someone in their Prime wants to find something impactful to do one of our primary evolved traits is to maximize our social status and in a world rich with possibilities this program will activate all the Hallmarks are here a bigger more impactful Mission emerges so that is what he started to do but basically wasn't able to do and then the second point is maybe he's just writing about all of this to flex or to tell people about his story who knows but it's final point is always make interesting choices act like you're the main character of your own story do whatever you want live your best life and that I can agree with if you enjoyed this video please consider giving a like And subscribe and I'll see you in the next one