Joe Walker serves as interlocutor in “Larry Summers — AGI and the Subsequent Industrial Revolution” (The Joe Walker Podcast, October 22, 2024). Listed here are a few factors that caught my eye, however there may be rather more within the interview itself.
Right here’s Summers on the long-term improve in financial output over time and the interrelationship with know-how:
[T]he extra I examine historical past, the extra I’m struck that the main inflection factors in historical past need to do with know-how. I did a calculation not way back, and I calculated that whereas solely 7% of the individuals who’ve ever lived are alive proper now, two-thirds of the GDP that’s ever been produced by human beings was produced throughout my lifetime. And on affordable projections, there could possibly be 3 times as a lot produced within the subsequent 50 years as there was by means of all of human historical past thus far. .. After all, I believe that this [AI] know-how doubtlessly has implications better than any previous know-how, as a result of fireplace doesn’t make extra fireplace, electrical energy doesn’t make extra electrical energy. However AI has the capability to be self-improving.
There’s an fascinating dynamic between robust technological advance in a given sector and the share of that sector within the economic system. Think about that it turns into less expensive to make one thing, in order that its value is falling sharply. The amount demanded of the nice will increase, no less than up to some extent. Within the context of the economic system as a complete, the dimensions of a given sector is set by the amount it produces multiplied by the worth. If value retains falling, and amount demanded doesn’t preserve rising as rapidly, then the share of a high-productivity sector within the economic system will decline. Equally, as AI applied sciences plummet in value, it’s no less than potential that the output share of AI applied sciences within the economic system will decline as nicely. Right here’s Summers:
[S]ectors the place there’s actions the place … there may be sufficiently fast progress nearly at all times see very quickly falling costs. And until there’s extremely elastic demand for them, which means they turn out to be a smaller and smaller share of the full economic system. So we noticed tremendous fast progress in agriculture, however as a result of individuals solely needed a lot meals, the consequence of that was that it grew to become a declining share of the economic system. And so even when it had quick or accelerating progress that had much less and fewer of an affect on whole GDP progress. In some methods we’re seeing the identical factor occur within the manufacturing sector the place the share of GDP that’s manufacturing is declining. However that’s not a consequence of producing’s failure. It’s a consequence of producing’s success.
A basic instance was offered by the Yale economist Invoice Nordhaus with respect to illumination. The illumination sector has made huge progress, 8, 10 per cent a yr for a lot of a long time. However the consequence of that has been that on the one hand, there’s evening little league video games performed on a regular basis in a manner that was not the case once I was a child. Alternatively, candlemaking was a major sector of the economic system within the nineteenth century, and no one thinks of the illumination sector as being an essential sector of the economic system [today]. So I believe it’s nearly inevitable that regardless of the residuum of actions that inherently contain the passage of time and inherently contain human interplay, it can at all times be the case that 20 minutes of intimacy between two people takes 20 minutes.
And in order that sort of exercise will inevitably turn out to be a bigger and bigger share by worth of the economic system. After which when the productiveness progress of the general economic system is a weighted common of the expansion particular person sectors, the sectors the place there’s essentially the most fast progress will come over time to get much less and fewer weight.
To place it one other manner, the financial points about AI don’t contain the capabilities of the know-how in splendid isolation; as a substitute, it’s how AI know-how interacts with staff and customers, with manufacturing and consumption of products and providers. Some duties that staff presently do shall be changed, however potentialities for brand-new items and providers, in addition to enhancements in present ones, shall be created. I don’t fake to know the way it will all work out within the a long time to return, however I do know that within the globalized world economic system, the AI cat is already out of the bag. Paul Romer (Nobel ’18) supplied a pithy aphorism a couple of years in the past: ”Everybody needs progress. No one needs change.” Alternatively, one would possibly say that some people are fearful or hesitant about change till or until society or authorities has full management over the route of change and full information of its future results–through which case, in fact, it barely qualifies as “change” in any respect.
