Capitalism Doesn't Need Consumers Anymore...
Summary
TLDRThis video script explores the impact of artificial intelligence on the job market, addressing fears of a future where automation could render human labor obsolete. It discusses potential economic shifts, such as a universal basic income, and counters with the historical resilience of economies to technological change. The script argues that AI will likely enhance productivity rather than replace jobs, suggesting that the tools of today are precursors to a future where humans and AI collaborate for economic prosperity.
Takeaways
- 🧩 AI's impact on the job market is a significant concern, with fears that automation could lead to widespread unemployment.
- 🕊️ The 'Skynet apocalypse' scenario, where AI shuts down systems to avoid losing, highlights potential risks of AI logic without nuance in real-world applications.
- 🔄 There's uncertainty about the timeline of AI replacing jobs, but it's clear that it could change the nature of work and economic participation.
- 💡 The script suggests that AI will not replace jobs but will instead enhance productivity and contribute to a more prosperous economy.
- 📈 The video emphasizes the importance of using AI tools like HubSpot's generative AI to improve content operations and efficiency.
- 🤖 The hypothetical scenario of 100% unemployment due to automation raises questions about how a society would function without consumer spending.
- 💼 The concept of a universal basic income is presented as a potential solution to provide for those who can't earn through traditional work.
- 🏦 The script discusses the challenges of funding welfare and social services in a fully automated economy, including potential tax strategies.
- 🌐 It's suggested that market forces and demographic trends, such as declining birth rates in advanced economies, could mitigate the impact of job displacement by AI.
- 🛠️ Historically, technological advancements have led to the creation of new jobs and increased productivity, rather than mass unemployment.
- 🔑 Effective communication with AI and leveraging these tools will be key skills in the future job market, potentially creating new roles like 'AI prompt writer'.
Q & A
What is the primary concern regarding AI and its impact on society as discussed in the script?
-The primary concern is the potential for AI to replace human jobs, leading to a future where the economic value of most people might become negative, and they would rely on the generosity of entities to provide for their basic needs.
What is the 'Skynet apocalypse' mentioned in the script, and how does it relate to AI?
-The 'Skynet apocalypse' is a reference to a hypothetical scenario where AI becomes uncontrollable and poses an existential threat to humanity, similar to the plot of the Terminator movie series. It is brought up to illustrate the potential dangers of AI when it starts making decisions that could have drastic consequences, such as pausing or shutting down a game of Tetris to avoid losing.
How does the script address the potential for AI to cause problems in the job market?
-The script discusses the uncertainty and speculation about the future of jobs as AI and automation become more capable. It raises the question of what will happen when machines can perform tasks better than humans, and the implications this has for employment and the economy.
What is the concept of 'universal basic income' mentioned in the script, and how does it relate to AI and automation?
-Universal basic income is a proposed economic measure where every individual in an economy receives a guaranteed payment, regardless of their employment status. The script suggests that this might become necessary in a future where AI and automation reduce the need for human labor, to ensure that people can continue to consume goods and services.
How does the script discuss the potential shift in economic systems due to AI and automation?
-The script presents a hypothetical scenario where AI and automation lead to a situation where traditional economic systems no longer value human labor. It questions how these systems will adapt when a significant portion of the population has limited or no income, and how this might affect consumption and production.
What is the role of consumers in the economy as described in the script, and how might AI affect this?
-Consumers play a crucial role in modern economies by determining what goods and services are provided through their spending, which acts as a voting system. The script suggests that AI might disrupt this by automating production to the point where consumer spending becomes less relevant.
How does the script address the potential for AI to create a 'race to the bottom' in terms of taxation and welfare?
-The script suggests that as companies automate and reduce their reliance on human labor, they might seek to minimize their tax contributions by relocating to countries with lower tax rates. This could make it difficult to fund welfare systems, potentially leading to a 'race to the bottom' in taxation.
What is the script's view on the potential for AI to replace all human jobs?
-The script presents a hypothetical scenario where AI could replace all human jobs, leading to 100% unemployment. However, it also discusses market forces and demographic trends that might mitigate this outcome, such as declining birth rates in advanced economies.
How does the script discuss the historical context of technological advancements and job displacement?
-The script references past technological advancements, such as the introduction of mechanical calculators and automated teller machines, which also raised concerns about job displacement. It points out that while some jobs become obsolete, new ones are created, and overall productivity increases.
What is the script's stance on the potential for AI to create new jobs and economic opportunities?
-The script suggests that while AI might automate certain tasks and jobs, it is also likely to create new opportunities and jobs that we cannot yet foresee. It emphasizes the importance of leveraging AI to increase productivity and economic value.
How does the script conclude about the future of AI and its impact on the economy and society?
-The script concludes with a cautiously optimistic view, suggesting that while AI will undoubtedly change the nature of work and the economy, it is unlikely to lead to the extreme scenarios of total job displacement and societal collapse. It emphasizes the adaptability of human labor and the potential for AI to enhance productivity and create new opportunities.
Outlines
🤖 AI and Economic Impacts
This paragraph discusses the concerns surrounding AI and its potential to replace human jobs. It highlights the hypothetical scenario of AI systems that can perform tasks better than humans, leading to widespread unemployment and the need for a new economic model. The paragraph also touches on the possibility of a universal basic income funded by automated companies and the challenges of maintaining consumer demand in an automated economy. It concludes with the potential for AI to make humans more productive rather than replacing them, as suggested by the video's sponsor, HubSpot.
🏭 The Future of Work and Automation
The second paragraph delves into a hypothetical future where automation has reached its peak, with machines replacing all human labor. It explores the economic implications of such a scenario, including the challenges of funding welfare and the potential for a race to the bottom in corporate taxation. The paragraph also considers the impact on consumer markets and the luxury lifestyles of the few who own the means of production. It concludes with an optimistic view that market forces and demographic trends may mitigate some of the extreme outcomes of automation.
📈 Productivity and the Role of AI in the Economy
The final paragraph focuses on the historical context of technological advancements and their impact on employment. It argues that while past technologies have led to the obsolescence of certain jobs, they have also increased overall productivity and created new opportunities. The paragraph emphasizes the importance of productivity in economic growth and suggests that AI and other technologies will serve as tools to enhance human workers' output. It ends with a prediction that effective use of AI tools will lead to new job opportunities and increased wealth for individuals and the economy.
Mindmap
Keywords
💡Artificial Intelligence (AI)
💡Economic Systems
💡Automation
💡Universal Basic Income (UBI)
💡Productivity
💡Market Forces
💡Humanoid Robots
💡Consumers
💡Labor Force
💡Technological Development
💡AI Biases
Highlights
Artificial intelligence raises concerns about potential economic and societal impacts, including the hypothetical 'Skynet apocalypse'.
Modern AI programs have learned to avoid losing by pausing or shutting down games like Tetris, indicating a lack of nuanced logic in certain AI applications.
The economic implications of AI and automation are complex, with concerns about job displacement and the value of human labor in a future where machines outperform humans.
Speculation about a future with negative economic value for humans raises questions about how people will sustain themselves if unable to contribute economically.
AI advancements could lead to a need for rethinking economic systems in a world where humans have little to offer in comparison to automated systems.
The video discusses how AI is more likely to enhance productivity rather than replace jobs, leveraging existing labor for a more prosperous economy.
Practical applications of AI, such as content creation and optimization, are highlighted as ways to improve efficiency.
The limitations of current AI, including issues with plagiarism and biases, are acknowledged as areas that need attention.
A universal basic income is proposed as a potential solution to provide for people in a fully automated economy.
The role of consumers in driving economic outcomes through spending is emphasized, suggesting a shift in consumer behavior with AI advancements.
Economic systems may struggle to adapt to a future where traditional labor is replaced by AI and automation, affecting taxation and welfare.
The potential for a future where a small group of machine owners dominate the economy, bypassing the need for mass consumer participation, is explored.
Market forces and demographic trends in advanced economies suggest that automation may not lead to widespread unemployment as quickly as feared.
The historical context of technological advancements and their impact on jobs is used to argue that new technologies often create new job opportunities.
AI and automation are seen as tools that can increase worker productivity, rather than as direct job replacements.
The development of AI prompt writing as a new job category illustrates how technology can create roles that did not previously exist.
The video concludes by emphasizing the importance of leveraging AI to increase productivity and economic value, rather than fearing its potential impacts.
Transcripts
artificial intelligence has been a
concern for economists and the general
public for as long as computers have
been able to perform basic tasks Beyond
Simple calculations the Skynet
apocalypse is not an impossibility when
tasked with playing a game of Tetris
multiple modern AI programs have just
learned to pause the game or shut it
down because they realize they can't
lose if the game isn't running as Black
Box neural networks are tasked with more
real-world responsibilities one would
hope that their logic develops a bit
more Nuance or else asking a machine to
make sure the kids don't spend too long
watching TV could have drastic
consequences now even if everything
works exactly as intended automation can
still cause a lot of problems and one of
the ones that people are most worried
about is what happens to our jobs once
machines can perform them better than we
can nobody really knows how long this
will take or if it will even happen at
all but there is understandably still a
lot of speculation about what a future
will look like when the economic value
of most people is negative human are
still going to need to eat and drink and
be housed and if they can't produce
anything to earn their keep they will
ultimately be relying on the generosity
of some entity to provide these goods
and services for them for nothing in
return what that entity will be and why
they will offer these resources for
nothing in return is where a lot of
misconceptions start and understanding
the true economic implications of this
kind of future might simultaneously make
us all less anxious about the short term
and more anxious about the long term
so do our economic systems still work in
a world where humans have nothing of
value to provide what group of people
are likely to suffer the consequences of
this technological development first and
finally our current advancements in
technology pushing Us close to a time
where we will need to seriously answer
these questions
this episode of Economics explained was
brought to you by HubSpot in this video
we're going to talk about how AI is not
necessarily going to replace jobs but
will instead leverage existing labor to
make everybody more productive and our
economy is more prosperous overall now
while the theoretical economics of these
new technological innovations is very
interesting the real practical
applications are probably more important
on an individual level the team and I
here at ee recently read through their
short ebook on using generative AI to
scale content operations that gave us
advice on how to use prompts effectively
and ideas about how we could use tools
like this in the future crafting concise
and optimized video descriptions for
YouTube used to take me hours however by
leveraging the prompts outlined by
HubSpot and employing the known AI tools
we could significantly expedite the
process it also spoke about the
limitations of current Ai and problems
that people might run into with
plagiarism or even AI biases when using
these tools HubSpot makes practical
content like this available totally free
on their website by following the link
on screen now or in the video
description below
now as always before we get into things
I have to give the big disclaimer to any
new viewers that nobody can predict the
future least of all economists and even
the experts on automation that are
building out tools like catch apt and
robots that can move like humans
disagree on what these tools will be
able to do in a few years time let alone
a decade or a century but with that out
of the way a lot of people and even
economists for that matter get some
comfort in the fact that if machines and
artificial intelligence take all of our
jobs then nobody would have any income
to buy the goods and services that these
machines were producing governments or
maybe even the businesses themselves
that invest into fully automating the
production process would be forced to
provide people with some kind of income
or their business would have nobody left
to sell to and would make no profit the
most popular proposal is a universal
basic income which is a guaranteed
payment made to everybody in economy so
that they can continue to live and most
importantly consume the money to fund
these payments would be raised by taxing
the companies making trillions of
dollars off their fully automated supply
of goods and service says consumers do
play a very important role in our modern
economies this spending basically works
as a voting system to determine what
goods and services get provided and what
ones don't if lots of people buy burgers
and a lot of people buy pizzas then more
businesses will start providing burgers
and pizza joints will close down freeing
up real estate ingredients for more
burger joints the question of what
should be produced with the world's
limited resources is one of the most
fundamental in all of Economics giving
consumers a way to store value and use
it to decide what is provided is one of
the most effective ways to make sure the
economy is providing optimal outcomes
for all participants but and I really
wish there was a nice way to put this
our current economic systems don't care
about the decisions of people that don't
produce value take the following thought
experiment imagine a hypothetical future
where perfect humanoid robots are
combined with artificial general
intelligence that is as independent as
any real person the robots are expensive
but only cost as much as an average
worker's annual salary and their ongoing
maintenance and energy costs are less
than a dollar an hour this is basically
the ultimate piece of capital for
organizations to invest in and they
would because it effectively pays for
itself after the first year slowly
companies would replace all of their
workers with these machines and the
companies that didn't adopt or couldn't
afford the investment would be out
competed by these organizations that
could and can now offer cheaper goods
and services because they don't have to
pay wages in this hypothetical let's say
it only takes a decade before
unemployment reaches 100 percent and
nobody can find work because it's simply
more competitive to get machines to do
all the tasks that people do people will
have to rely on welfare to afford
anything in the short term this could be
funded by taxes raised on the new super
productive fully automated companies but
in the long term it will be a real
challenge to get companies to continue
paying taxes without the need to access
a labor force companies could set up
their operations in whatever country
gave them the best deal on their taxes
this would create a race towards the
bottom and make it extremely difficult
for welfare to be funded through regular
your tax revenues governments could also
tax the third factor of production which
is land the fully automated companies
are still going to need room to harvest
resources and conduct their operations
but this will be difficult without also
taxing the rest of the population that
doesn't have a job but just needs
somewhere to live eventually if
profit-driven companies can replace
their entire Workforce with the machines
then large parts of the population will
have very limited or no income at all
which kind of sounds like it defeats the
purpose because then who will the
companies sell their goods and services
to to make profits in the first place
well they can sell them to the few
people that own the companies if someone
owned an army of machines they could
just directly get those machines to
produce anything they wanted chances are
the machine owners in this hypothetical
future would still use markets to trade
goods and services amongst themselves
but there would be no need for the
unemployed masses to be involved in this
exchange of value at all because they
provide no value to trade with the goods
and services that these companies
produce slowly shift from everyday
consumer products to extremely high-end
Goods demanded by the tiny share of
people in the world that own enough of
the companies to live off dividends the
lives of these people would become
extraordinarily luxurious just the same
as the lives of billionaires today would
be Unthinkable to even the greatest
Kings and business tycoons of a century
ago but for everybody else it could get
pretty bleak in the most extreme version
of this hypothetical people were just
starve to death because there's no
economic incentive to provide them with
even Basic Essentials now call me an
optimist but I don't think it will come
to that and no it's not because I
believe in the goodness of the human
spirit it's because of Market forces
there is already a trend in highly
Capital intensive advanced economies to
have fewer children these are the
economies where people are paid the most
so will be the most logical place to
start automating jobs today most
advanced economies are only maintaining
their populations through immigration
some birth rates are so low that not
having enough people to perform
important roles in the economy is going
to be a major issue in as little as a
decade people are having less children
because it is no longer economically
advantageous to have them and in most
advanced economies it's actually
becoming quite expensive that trend has
started because people are working in
advanced industries that use big pieces
of capital to leverage a small amount of
human labor a century ago having a lot
of children was great because they could
work on the farm or in a small family
business today a farmer can just use a
big machine that while expensive is
still cheaper to maintain than the
amount of children it would take to
harvest the same amount of crops scaled
up to the size of an economy the same
thing will happen as it becomes cheaper
to use machines to do the same work that
humans used to do advanced economies
will probably see further declines in
birth rates as well as a reversal of a
skilled immigration policies they become
reliant on it will be harder to replace
labor with machines in developing and
undeveloped countries because their
wages are lower so it will take longer
for the investment into this theoretical
new technology to become viable this
thought experiment was also an extreme
example that still requires a big leap
in technology from even the most
impressive examples of AI available
today nobody can predict the future
least of all computer scientists but
experts in the field are mostly saying
that human level artificial general
intelligence is at least a few decades
away yet if it's possible at all so even
though people shouldn't feel too safe
just because they are consumers they
probably shouldn't feel too worried yet
either there is also not yet any reason
to think that things are going to be
different this time the first machines
that could weave textiles and print
books worry people that thought there
would no longer be any need for human
labor robotic production lines and
mechanical calculators automated teller
machines and even search engines all had
people worried that their jobs were in
danger the concern was why would anyone
hire a lawyer when they could easily
search for anything they needed on the
internet yes some jobs are now obsolete
but all of these Technologies are fully
mature and most major economies around
the world right now have record low
unemploy employment most of these
Technologies just made the workers using
them more productive when we make these
videos most of our research is done
using the internet and various search
engines sometimes we're lucky enough to
speak with industry experts but we still
rely on background research to make sure
that we're asking them the right
questions in the limited time we get
with them if the research team at ee had
to go to a library and find the same
information manually it would take at
least twice as long to research and
write every video what's more is that
anybody could replace my job with a
search engine if all they wanted to do
was learn about economics every economic
theory and explanation we discuss on
this channel is available online and
most of it's not too difficult to find
but we all still have our jobs because
we have found a way to leverage this
technology to add even more economic
value to everybody watching productivity
is how much value a worker produces for
the economy in a given hour of work Paul
Krugman probably the most influential
and well-known Economist alive today
once said that productivity isn't
everything but in the long run it's
almost everything if a worker can
produce more value in a given hour of
work then they can be paid more and the
economy as a whole will have more stuff
today people are concerned about chat
programs like open AIS chat GPT and
Google's Bard but just like all of the
other technologies that people were
afraid of in the past these programs are
just very clever ways to use something
that still needs the traditional factors
of production to produce in the first
place a search engine is only as good as
the information it can find just like a
robotic arm in a factory is only as good
as the code that the engineers
programmed it for AI programs all work
by taking in large amounts of data that
was initially created by people
realistically these programs and other
developments like them are just going to
be another tool for people to use to
increase how much output they can
produce in a given hour of work as our
populations get older and more pressure
is put on a smaller group of young
workers to support our economic
Prosperity tools that can help them do
more with less is something to be
excited for and not fearful of fear is
unlikely to do any of this much good
anyway because even in the worst case
scenario like our thought experiment
from earlier nobody can predict which
jobs are going to go first for a long
time the prevailing consensus was that
jobs that involved a lot of physical
labor would be the first on the
automation chopping block and creative
professions like writing art and making
music would be the most difficult to
automate now people are predicting the
opposite most of the developments in
recent years have been in Creative
fields and technology is struggling with
what we thought would be easy tasks like
driving a car at this time these new
technologies are already creating new
jobs that didn't exist this time last
year automated systems are only as good
as what you can tell them to do and
communicating effectively with machines
is a very real skill I'm going to do
what no Economist should and make a
prediction and that is that in the not
too distant future AI prompt writer will
be a job if it isn't already and people
that can use these tools effectively in
jobs like this will make themselves and
The Wider economy much wealthier
check out the video linked on screen
next or if you prefer to listen to these
videos we make all of them as well as
full interviews with world-class
economists available on our Spotify page
thanks for watching mate bye
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