> Efficiency improvements are always good for society as a whole, despite it hurting some people who originally was paid due to the inefficiency.
When the economic/capital/wealth 1% end up hoarding all the profitability gains, society as a whole loses. I have come to loathe the term "disruption" as it has always meant externalizing costs to make a quick buck: either by technology replacing actual, real humans with real families who now have to struggle to survive or by breaking laws and regulations like Uber and AirBnB did, with society paying the costs associated with that - in the case of Uber, society picked up the tab for underinsured drivers or for their pension/social security contributions which don't apply for "freelancers", and in the case of AirBnB all the neighbors affected by the noise and literal other disruptions an AirBnB brings with it.
This is a criticism of the USA's economic system, where we only give people money through _factor payments_ (exchanging money for labor) or _ownership of capital_.
It isn't actually a criticism of technology/automation!
In healthier countries, like the Nordics, they've organized their society so that automation, resource extraction, and really all success in business benefits their society as a whole rather than concentrating the wealth into the hands of the elite.
Having written that, I feel like I'm picking a nit, because what you said is true in the USA and I don't see it changing in my lifetime.
Norway is one of the very few democratic nations having a sizable sovereign wealth fund and a strong tradition of the responsibility of the state to take care of all of its citizens (partially because the natural conditions make survival without cooperation all but impossible). Out of all the top 20 SWFs [1], only four to six belong to healthy democracies, six if you count Turkey and the US as one - the rest are essentially grifting arms for the local rulers.
Everyone else barely has a SWF worth the name and almost all Western and Western-allied countries have fallen into the neoliberal/"lean government" trap.
Thats true but a sovereign wealth fund isn't the only way to link success of the country's businesses to the success of the people.
Using tax revenue to fund a social safety net, public works, education, and housing achieves the goal.
The sovereign wealth fund is more about what to do with the money between taxation and social works. If the country has a sovereign wealth fund without all the social spending then I'd say the success of the country's business hasn't been linked to the wellbeing of the people.
The 1% do not get wealthy from “hoarding the profitability gains.” This is a common misconception on HN and society in general. Profits of businesses are typically in 10% range for small businesses and even lower on average for large businesses [1].
Wealth is not income. It’s the value of owned assets: money, property, etc.
So where does the wealth come from? There are a couple of different answers-and I’m not going to discuss stealing, slavery, exploitation or other illegal and immoral practices-but generally the answer for lots of wealthy, legitimate people is it is CREATED from “deals.”
Wherever one person (or group) can sell something to someone else at a multiple of its current value, wealth is created.
The expectation that something of value will either generate income or grow in value in future years creates a higher price for that thing right now. That entices the buyer, and creates wealth for the seller.
How much wealth? If you have a rock today that you can tell a story about being potentially worth 100x in 10 years, then you can probably sell that rock for 10x of its actual value today. That is wealth creation.
This is related to the concept of “time value of money.”
Real estate is one example. Selling a business is another. Art is yet another example.
> Wealth is not income. It’s the value of owned assets: money, property, etc.
Both wealth and income disparity have risen over the last decades - while the lower income group's shares have stayed constant, the middle class has eroded in favor of those already in wealth - and only the top 5% managed to gain wealth after the 2009-ff depression [1], with their gains by necessity coming from the suffering of the 95%.
The reason is simple: if you are already wealthy, you can afford snatching up assets of all kinds for fire-sale prices - particularly those who had to panic-sell their assets or walk away from properties they could no longer afford or were completely underwater after the loss in value despite paying down their mortgage for many years in the early COVID crisis months or in the 2009-ff depression to survive got hit really hard. And on top of that, simply being wealthy puts you in a very favorable economic position... stuff like using higher-risk but also higher-profit financial instruments is only allowed after hitting a certain wealth threshold, you could generate virtually free money and evade taxes by taking loans on your continuously appreciating stocks, or use highly complicated multi-national tax evasion constructs.
>Wherever one person (or group) can sell something to someone else at a multiple of its current value, wealth is created.
And where does the vast majority create their wealth from... Labor. What does AI stand to devalue... Labor. Just remember that most people don't have the capital you're talking about!
Well, no you missed my point. I understand it is subtle, so I will expand on it.
I said that wealth was created in the transaction. Labor may be required to create the thing being sold, such as a business, but that labor is becoming less and less important over time. Take the sale of the company “WhatsApp” to Facebook. They sold for $16 billion, but they only had 55 employees with some equity. That’s a lot of wealth for those people.
With AI, this type of productivity (like WhatsApp) with less labor required will only increase. More productivity, less labor.
The capital for creating WhatsApp came from investors. The founders likely had no capital of their own. But they are super wealthy today.
Those who expect to be employed (labor) by strictly being told what to do for a salary will be on the sidelines of wealth creation.
Those who figure out how to use AI to build valuable things and then sell them to others will create their own wealth.
AI is the “fix” for less capital and less labor.
Everybody needs to think about jumping into the pool and start swimming. Anyway, that’s what HN is supposed to be about: entrepreneurship.
"There are two types of magical thinking around AGI. 1, that AGI will be able to do absolutely anything. And 2, that AGI won't replace your job"
>Those who figure out how to use AI to build valuable things and then sell them to others will create their own wealth.
See, this is why we cannot have discussions about generalized AI, that is the entrepreneurs don't think they'll be replaced by AI, and if they pull themselves hard enough by the bootstraps hard enough they'll overcome the all seeing data harvesting Molochs we've created by sheer willpower and brilliance. And maybe in a few cases will... but will it matter when the angry masses displaced by technology club them to death in the streets?
Entrepreneurship without responsibility equals calamity. Drastically changing the social contract and saying 'good luck everyone else' will be our modern "let them eat cake" moment.
When the economic/capital/wealth 1% end up hoarding all the profitability gains, society as a whole loses. I have come to loathe the term "disruption" as it has always meant externalizing costs to make a quick buck: either by technology replacing actual, real humans with real families who now have to struggle to survive or by breaking laws and regulations like Uber and AirBnB did, with society paying the costs associated with that - in the case of Uber, society picked up the tab for underinsured drivers or for their pension/social security contributions which don't apply for "freelancers", and in the case of AirBnB all the neighbors affected by the noise and literal other disruptions an AirBnB brings with it.
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