The AI Layoff Trap

rvz

Let’s take AGI to its inevitable raw conclusion. Not by the definition (ab)used by clueless VCs screaming about abundance, but by what is already happening using the worst case: The abundance of mass layoffs and job displacement due to funding and building of AI systems is the true definition of AGI. We might as well get there faster instead of delaying it. You have already seen Oracle and Block attributing their layoffs to AI so it is happening right now. So why delay any further and just get it over with.

rsalus

Great paper. > If AI displaces human workers faster than the economy can reabsorb them Big if.

paulpauper

If AI displaces human workers faster than the economy can reabsorb them, it risks eroding the very consumer demand firms depend on. That is a huge "if" though. I am not sure either that the latter falls from this. When the US transitioned away from assembly lines or agriculture dominated, it's not as if consumer spending consequently collapsed.

semiinfinitely

neo-luddism dressed up in economic jargon. the authors suggest the only effective tool is to tax companies based on how much automation they achieve. Penalizing efficiency is a guaranteed recipe for stagnation and if we'd done this at any point in our past we would have not made it out of the dark ages

drivebyhooting

The trick is bypassing the human consumer as well. Companies satisfy (human) consumer needs as a byproduct of profit maximization. But human consumers are inefficient. They have to sleep, require medical care, etc. A purely machine economy would be far more efficient. Therefore in the limit we should eliminate reliance on human labor and consumption to build a more perfect and efficient world.

slopinthebag

Still looking for the AI in the room. Where is it exactly? Surely nobody is claiming LLMs are AI?

xyzal

I use AIs for coding with moderate success, but the more I work with them, the more I am convinced that "intelligence on tap" is a pipe dream, especially in domains where logical thinking in novel (ie not-in-dataset) contexts is required. Recently, I tasked it to study a new Czech building permit law in conjunction with some waste disposal regulations and the result was just tragic. The model (opus 4.6) just could not stop drawing conclusions from obsolete regulations in its training dataset, even when given the fulltext of the new law. The usual "you are totally right" also applied and its conclusions were most of the time obviously wrong even to a human with cursory knowledge of the subject. I ended with studying the relevant regulations myself over the weekend.

isoprophlex

So... the solution is basically "pay tax on the demand that you're destroying". We can all hate on the premise (ai is good enough to do this) and/or the solution presented (centrally enforced taxation), but you gotta admit: the messaging from SV's AI leaders about how "ai will take all your jobs" is confused as fuck, because if so, who will be on the consuming end of things?

khalic

While I agree with the general sentiment that this requires monitoring and study, the abstract is _very_ tendentious, lays multiple hypothesis as facts and doesn’t provide any measurement or alternatives to their preferred solution. This isn’t a scientific study, it’s a militant manifesto

bwhiting2356

If robotics progress starts to pick up, I'll take this more seriously. Right now, there's practically infinite demand for labor in construction, manufacturing, agriculture and many other industries. All kinds us good projects that could be happening, if you dig into why, labor intensive work is a factor. Why didn't the hydroponics project take off? Why is that still an empty lot instead of a new home? Why isn't there live theatre in this small city? Why is there a pot hole in the bike lane?

efitz

AI layoffs are very shortsighted IMO and should be viewed by investors as a sign of weakness in management or the business itself. If everyone is going to increase productivity by some factor k per employee, then kx is the new norm of overall productivity of x employees. If you lay off some percentage Y of your work force, then your expected gains will only be k(x(100-y)/100). In other words, you will not recognize the same productivity gains as your competitors that chose not to lay off. Yes I realize it is more complex than that, because of reduced opex, but there are diminishing returns very quickly.

yobbo

Start by shifting taxation from worker incomes to corporate incomes?

incomingpain

The way I see OP: It's the Luddite Fallacy. Textile workers worried about machinery saying it's going to result in collapse of the economy when they lose their job. But every time there's a new technology that threatens some jobs because of an increase in efficiency but investment thus can be placed in other locations creating new jobs. different kinds of jobs. It's not different this time. Each time the luddite movement is wrong. They are solely concerned with their own selfish concerns and the demands to stop the technological improvement will not be heeded.

josefritzishere

DApplying a Pigouvian tax to Ai companies might be difficult. None of them actually generate profit, nor have a model to ever do so. I think the huype machien needs to stop spinning before a solution like that would become practical.