The Tragedy of the Commoner by Hugh Howey
This might all sound theoretical, but it’s actually what’s happening all the time. Every company is trying to increase profits, which means doing more work with fewer costs. Driving down costs means keeping wages as low as the market will tolerate and hiring as few people as required to do all the work. But every company also relies on all the other companies to pay great wages so there are consumers with dollars to spend. Walmart and Amazon might think they are in the business of selling widgets, but they are really in the business of generating wages. Their value to shareholders is measured by profits, but their value to the economy can be measured in how much in wages they inject into the system.
I did not know that Ford paid more wages for his workers and reduced their working hours.
This is the frustrating thing I have with how everyone is behaving wrt AI. Who will buy things when AI is doing everything? Who will buy these services if no one has any money to spend?
Here’s the thing: Walmart and Amazon would be idiotic to do anything other than what they are doing. Overpaying would be suicide. Hiring too many workers would be suicide. There’s zero incentive to do either. What both of them NEED, while they both fight to prevent with union busting, is MANDATED HIGHER WAGES. They both would benefit from a federal minimum wage hike to $30 an hour. It would increase consumer spending. Their profit margins would decrease, but SO WOULD EVERYONE ELSE’S, so there wouldn’t be a better place for investor dollars. In fact, the only way to prevent this gradual gutting of the middle class and the destruction of these business models seeking greater efficiency is for the government to rescue them with higher minimum wages.
The AI Bubble — No One's Happy by No One's Happy
The buyers have not learned to manage and the sellers have not learned to price, the two failures meeting in the middle and being reported, in the aggregate, as demand. The buildout is being sized against consumption figures that include their own inefficiency — and the revenue projections required to justify it assume this inflated consumption will grow, not contract, as teams mature and architectures stabilize.
Without billionaires who would happily support concentration camps in their back yards if it means saving a dollar on their taxes, fascism would still be a fringe movement.
Loved this line. All movements need money. That money must come from somewhere.
The crux of this article is this - Amazon forces sellers to raise prices everywhere, if they want to raise prices on Amazon, because of the cut Amazon takes.
Part 1: My Life Is a Lie by Michael W. Green
The second earner isn’t working for a vacation or a boat. The second earner is working to pay the stranger watching their children so they can go to work and clear $1-2K extra a month. It’s a closed loop.
This hit me like a ton of bricks.
This is a must read.
Europe's share of global economic output has fallen from 33% to 23% since 2005 while its space launch capacity has nearly collapsed, launching just four rockets this year compared to over 100 for the United States and 40 for China.
Sweden has quietly spurred economic growth by cutting back its welfare state—tightening government spending, revamping the pension system and slashing corporate and personal tax rates. Per capita incomes are now climbing, and the country has seen a burst of entrepreneurship. Sweden even moved ahead of the U.S. in the number of billionaires per capita, thanks to a thriving tech startup scene and a video-game industry that has produced hits such as Minecraft and Candy Crush.
Uber’s Robotaxi Is No Quick Delivery
We have not fully contextualized the impact of the gradual automation of our everyday life and how much it reduces economic activity. Waymo’s driverless profits flow mostly to its investors, employees, and eventually Google’s shareholders. The local economic impact is close to zero, barring a few taxes.
Humans buy coffee, gas, and stay in the city. They even pay taxes on their income. They support the local ecosystem. A self-driving car company has none of those inefficiencies. Good for profits, not so much for the local ecosystems. Others see Waymo’s success and want the profits, just as fast-food chains want robots flipping burgers.
This is something that I keep wondering myself. If AI/robots replace the human workers, where will the humans get the money to buy the food or service or whatever.