Production

In this LinkedIn post, Reid Hoffman, LinkedIn's founder, mentions "productivity" twice in making the case that technology won't cost people their livelihoods. But he never mentions "demand." It's wonderful to presume that new automation tools will do the drudge work, thus empowering people to be "better humans," "unlock new skills and deepen natural talents." But if (and it's still an "if") this does, in fact, happen, what goods and services are going to be produced that will either allow people to support themselves, or free them from the need to work for other people, in order to sustain their standards of living?

I've asked people this question, and I have yet to receive a satisfactory answer. A lot of people have turned to something along the lines of, "it's coming, so there's nothing to worry about." My response to that tends to be this: "I don't worry about it, because anxiety helps nothing. But hope is not a strategy." I understand, at least to a degree, the potential and promise of the current crop of generative automation systems, and, if it's ever a reality, artificial general intelligence. But potential and promise don't pay people's bills.

Mr. Hoffman says: "Ultimately, the surge in productivity will guide business leaders to a realization: the right move isn’t to do the same work with fewer people but to create even greater value by leveraging more employees with new AI-driven superpowers." And I understand that, but "value" is not objective; it depends on other people to realize it; and they tend to want a return on their investments. And producing "value" in the form of goods and services that people don't have the resources to pay for is unsustainable... if it weren't, there would never be a reason for layoffs.

Demand is not infinite, especially when it's being driven by people who are uncertain about their economic prospects. And right now, generative automation is fueling uncertainty about those prospects. And people like Mr. Hoffman are focused on the supply side of the equation. (I would point out that there's a reason why Ronald Reagan's Supply Side orthodoxy earned the nickname "Voodoo Economics" in the 1980 presidential campaign.)

 Cars, for example, are valuable. But I already have one; the fact that someone with an AI-driven superpower has designed a new one doesn't automatically mean that I'm going to spend the money to upgrade. And if enough cars are sitting on lots, history tells us that business leaders will determine that the right move is to have fewer people create fewer of them.

This is why the exclusive focus on productivity seems misplaced. It appears to presume that whatever is produced will drive enough demand for itself to keep employment high. But the problems of "business leaders" are not identical to the problems of the public at large. In a society where well-paying employment for everyone who wants it would mean that businesses are less efficient, the interests of the public and the interests of investors will be at cross purposes. And business leaders are not equally beholden to both groups of stakeholders.