Self proclaimed pleb, tin hatter and clown.
God’s country
Joined May 2015
- Tweets31.6K
- Following633
- Followers535
- Likes50.1K
Smith, Ricardo and Marx were talking about this centuries ago … not sure why anyone is actually surprised. This is the core tenant of the much maligned LTV.
Two economists mathematically proved that AI will destroy the economy.
Researchers from Wharton and Boston University published a terryfiying paper called "The AI Layoff Trap."
They mapped out the economic end-game of the AI transition, and it exposes a fatal flaw in competitive capitalism.
When a company replaces a worker with AI, it captures 100% of the wage savings.
But that displaced worker is also a consumer. When they lose their job, they stop buying things.
The company gets all the savings, but the loss of consumer demand is spread across the entire economy.
If there are 20 competitors in a market, a CEO only absorbs 1/20th of the economic damage their layoffs just created.
So every single rational CEO has a mathematical incentive to automate as fast as possible.
They can literally see the cliff approaching, and they still step on the gas.
It triggers an unavoidable Prisoner’s Dilemma. If you don't automate, your competitors will, and they will crush you on price.
It doesn't just hurt workers. It destroys the businesses, too.
The economy gets trapped in an automation arms race. Companies fire their workforce to stay competitive, until the entire consumer base is completely hollowed out.
At the limit, the paper concludes: “Firms automate their way to boundless productivity and zero demand.”
And the scariest part?
The researchers mathematically tested every popular fix.
Universal Basic Income? Fails. It raises the living standard but doesn't change the corporate incentive to cut jobs. Retraining? Fails. Worker equity? Fails.
The paper proves that more competition actually makes the collapse happen faster. And "better" AI makes the damage worse.
The only thing that mathematically stops the collapse is a targeted automation tax, forcing companies to pay for the purchasing power they destroy before they automate the job.
Starting to think about the reflexivity case with AI… if ( or when) the deflation arrives because moats ( hence values ) are gone, it won’t be a case of what breaks but rather what remains. And LLMs are already “good enough” to do this on a medium horizon.
flyingfox retweeted
A CS undergrad asked me where he could have most effect in the AI age. I said probably at either extreme: either close to the technology, actually making LLMs, or close to the customer, using AI to give them exactly what they want. Or maybe both if you can stretch that far.
Unpopular opinion but affordable housing will do much more for innovation than any CGT carve out ever will.
flyingfox retweeted
The human brain: 2% body mass, but consumes 20% of its energy. Cortical neurons fire 0.16 times per second. BUT they are capable of firing at 40 or more. A 250-fold gap. If more than a few percent of neurons fired at high rates simultaneously, the brain would literally overheat. So less than 1% fire at any given moment. Frontier AI models have the same two constraints: sparse activation and thermal limits. Mixtral activated 27.6% of its parameters per token. DeepSeek-V2 activated 8.9%. DeepSeek-V3 has 671 billion parameters and activates 37 billion of them. That's 5.5%. NVIDIA hit the same wall. The GB200 generates 120 kilowatts per rack. Air couldn't cool it. They switched to liquid and unlocked 30% more compute. Now, what would happen if we could cool our brains? Neurons that fire faster produce measurably higher IQ scores, but three things stop us: heat dissipation, oxygen delivery, and ion channel reset time. There's already a device that achieved a 3°C brain temperature drop in 30 minutes by running chilled saline through the nasal cavity. So the first human IQ-overclock device might look less like Neuralink and more like a beer helmet with tubes running up your nose.
And what happens when these economic interactions cease to have economic value?
flyingfox retweeted
250 years ago today Adam Smith gave the world a fantastic insight.
That order, cooperation and prosperity are not ordered from above by priests or chiefs but emerge from the social interactions of ordinary people.
It’s the most revolutionary and benign idea ever proposed.
flyingfox retweeted
I should have said something. This was THE foundational economic work.
flyingfox retweeted
The UK used less coal in 2025 than they did in 1600, when Shakespeare was writing Hamlet. Source: carbonbrief.org/analysis-uk-…
flyingfox retweeted
Dystopian AI scenarios are drowning out conversations about how to use the technology to bring about a future of shared prosperity, says @claudia_sahm (via @opinion) bloomberg.com/opinion/articl…
flyingfox retweeted
Economics is not a physical science that you “observe by experiments”. You are observing a dynamic, complex system that is shaped by policies … which are themselves based off of the empirical or theoretical works of economists … don’t “hide” behind the science label.
flyingfox retweeted
If labour's share of global income had stayed at its 2004 level, workers would have received an additional US$2.4 trillion in 2024 alone. This isn't the inevitable result of technological change—it's a political choice about who shares in the risks and rewards of collective value creation.
Delivering a keynote today at the @ILO Innovation Day (13:15 CET) on why innovation systems must be built on a new social contract between labour, state and market.
Watch live ➡️ live.ilo.org/
