I keep reading this idea and I think something is missing.
Lets take this to the extreme:
only 2 people remain with capital and AI all the rest are replaced.
Now these two people how do they make money? they pay each other so there is no extra value created thus the amount of money as value symbol remains constant.
But here is an even more interesting question: As their AI can create anything why would they pay each other? So why do they need money?
> Now these two people how do they make money? they pay each other so there is no extra value created thus the amount of money as value symbol remains constant.
The money just circulating around is actually more or less how a normal economy works. If you have a two person world where one person makes food and the other makes tools, the money just bounces back and forth between the two people as they trade tools and food. It facilitates trade by acting as an IOU in case the first person doesn't need to trade tools at the exact moment the other needs to trade food.
AI and robotics will one day be able to produce food and tools without human labor. So there could be plenty of wealth created. The question is how do we distribute that wealth when humans aren't needed to make it? We need a new distribution system that isn't based on pay for labor. A lot of people suggest UBI.
Different AIs will be optimized for different types of tasks, or have completely different capabilities e.g. huge data access versus physical bodies. It could be more efficient for different firms to optimize and specialize their hardware and software for these use-cases and exchange for use of the labor of the other rather than for everyone to have a fully generalized fleet. I imagine this will be true even for incredibly advanced AI but who knows.
It's pretty obvious: once automation and wealth concentration get so extreme, the economy will get weird and stop being "capitalist" as we understand it.
For instance: it'd expect money to become near-meaningless, and the economic activity of the trillionaire class will consist mostly of direct extraction and consumption of resources (basically a personal autarky). There may be some barter of things like energy, raw materials, and maybe a small amount of proprietary items.
Given the lack of need to pay labor and the direct control of more resources than they'll ever need, the trillionaire will direct the world enonomy to towards pet projects (e.g. an Elon Musk commanding his robot army to build a giant steel pyramid on the moon in his honor, because why not? It'll be cool!).
I assume you are here talking about political choices, social media influences, life style choices and so on.
While all those are true they are not reflecting the level of intelligence of people: intelligent people take personal stupid decisions because while intelligence is a function of let's say the more "abstract brain", decisions are emotionally driven and influenced by the "ancient, threat focused, pleasure driven brain".
Here is a quick way to think about this: some intelligent people are obease, some others don't exercise, and others don't take their health seriously while also working on the most amazing problems we ever solved. You know what's the biggest paradox here: they all have the capacity to understand fully the impact of their lifestyle on their health but still making a life style change is hard due to not being driven by knowledge and logic.
One one side you have big companies paying huge amounts of money to super smart people to get teens hooked on their products.
On the other side you have parents who on average dont understand how social media algorithm works or in some (too many cases) they cannot follow the logic to a second order effect.
Even here we have comments saying something like "be smarter and teach your kid to be smarter than big social media companies" not understanding that addiction cannot always be defended by improved IQ. Geniuses can have addictions too.
Whenever I read these kind articles and some of the comments here I always wonder:
Its it survivor bias? I grew up in a small village/city during communism. I was basically unsupervised from morning to night since I have memories about me walking around in that village.
We were doing a lot of dangerous things while playing. And there are kids that got injured for life or lost their lives: falling from trees, drawn in a river, leg lost due to a horse injury, losing an eye during a game with some pipes, jumping from high places like 1st floor or more, ... I managed to not get hurt but the examples I gave are real.
I am not even talking about any of the fights between kids verbal or physical there were happening that todays will be labeled trauma.
So I do wonder if this free range thing that we desire is really what we want and we can accept the consequences?
I am not sure in all cases, depending of course of kids age and ability to reason, for each individual child this total liberty is the right path. I do understand the benefit for the society.
I was reading the pricing page for workers and here is what it says there:
> To prevent accidental runaway bills or denial-of-wallet attacks, configure the maximum amount of CPU time that can be used per invocation by defining limits in your Worker's Wrangler file, or via the Cloudflare dashboard (Workers & Pages > Select your Worker > Settings > CPU Limits).
Limiting CPU time for a single invocation of a worker is more for catching bugs in code that is using more CPU than expected and is not whatsoever effective as a hard limit on spending...
Unless your Cloudflare worker and the DB are scheduled onto the same physical server, they are not local to one another. I don’t know much about D1, but the overwhelming majority of cloud infra makes no such guarantees, nor are they likely to want to architect it in that manner.
Cloudflare's Durable Objects puts your Worker and SQLite DB on the same physical server (and lets you easily spawn millions of these pairs around the world).
D1 is a simplified wrapper around DO, but D1 does not put your DB on the same machine. You need to use DO directly to get local DBs.
Not an economist but the petrodollar concept helps the dollar because everybody that needs oil needs to buy dollars. You see it as small thing but it is fundamental thing because oil is used in so many places that as we have seen a disruption of 20% of it would start causing real problems on almost the entire world.
QED: oil powerful, only dollar buy oil, dollar stronger.
The use of dollars to purchase any commodity is a negligible fraction of demand for dollars.
What you should be looking at is investment demand for dollars, that is, in which currency does the seller store their surplus.
Think about it:
I need to buy a barrel of oil, but I am in Argentina. So I sell my pesos for dollars, I buy the oil with the dollar. The seller now has dollars, and sells the dollars for Swiss Francs and invests the money in swiss bonds.
Now, what happened? The global demand for dollars by the buyer was exactly offset by the seller. It is the seller that decides, by choosing where to store his surplus, of what currency is boosted by oil. And it is not the currency that oil is sold for, it is the currency that the proceeds are invested in.
So oil is completely irrelevant for the value of the dollar, what is relevant is that investors want to store their funds in the US capital markets. That's what matters, and it is investor preference to store their earnings in capital markets that determines why they want to denominate oil in dollars. It just saves on an extra transaction.
But focusing on the transactions misses the picture of the dollar's strength, because denominating oil in dollars is merely a consequence of the desirability of US capital markets as a destination for foreign capital. And that desirability drives everything else. It's not oil, it's deep, liquid capital markets with established foreign investor rights. That trumps everything else.
Think about it -- would you keep your earnings in a country with weak foreign investor rights or lack of financial transparency or illiquid markets where you couldn't easily pull your money out when you wanted to? That is much more important to the seller of the oil than anything else. It will drive what oil is priced in. And it will drive the demand for dollars.
Certainly correct, but I think you’re underselling the historical exchange part of this. Dollars being everywhere causes the financial infrastructure to be built out in dollar terms.
Part of what enabled that huge capital flow you’re talking about is that it was the Americans who came in and gave [country’s] banks a counterparty to exchange dollars for oil.
A lot of that soft power is not just the ability of America to print dollars, but also the ability of America to control the financial infrastructure. To surveil, KYC, sanction, etc. that is a huge part of it.
The petrodollar is less mechanically important today but back in the day it was huge to have “everyone who needs oil” be the counterparty to a currency exchange. It is what injected all that liquidity, which set the whole thing off.
I think what people are realizing and considering now is with the computerization of everything, capital can flow more freely. That is what is dangerous (for the US) about today’s moment; our political leaders are taking it all for granted.
I do think history is also important, but again it boils down "where is a safe place to store my money?". That really controls everything else.
Now, in the past we had a gold standard, so you could literally move your money from one country to another. Now during both WW1 and especially the runup to WW2, the wealthy moved much of their money to the United States as a safe harbor, since we were the only advanced economy with deep liquid bond markets, rule of law, and foreign investment rights (sorry, Canada, but it's true).
This was the greatest wealth transfer in history. By 1940, the US held 80% of the world's global gold reserves. 80%! And this was in the era when international trade was settled in gold.
So it all happened in single decade between 1930 and 1940, and the US instantly became the world's global reserve leader, an extremely dominant position, merely because people were afraid of war and wanted a safe place to park their money.
After the devastation after WW2, the flood of European money into the US continued and more than offset the Marshall plan.
So already at the end of WW2, the majority of the world's liquid savings was tucked away in America.
Now, people like to tell stories of American soldiers spending dollars somehow making the dollar a reserve currency, and those are the types of things that seem plausible to people who don't monitor global capital flows, but that's honestly a ridiculous story. That was chump change.
Bottom line, there are no special technical reasons beyond "I want a safe place to store my money". That controls everything else.
There is an adage in the world of money markets: "It does not matter what currency you trade in, what matters is what currency you store the proceeds in".
And the moment that some other nation opens its doors to foreign capital inflow, establishes rule of law (which takes decades to develop a reputation for stability and not confiscating assets), is safe, stable, and secure, establishes financial transparency, and has deep, liquid capital markets -- then the world's wealthy will flood that nation with money also. But unlike declaring that "I will sell my oil for euros", doing the above takes decades of building trust and reputation. Gimmicks aren't going to do it when you are looking for a safe place to store your money.
Lets take this to the extreme: only 2 people remain with capital and AI all the rest are replaced.
Now these two people how do they make money? they pay each other so there is no extra value created thus the amount of money as value symbol remains constant.
But here is an even more interesting question: As their AI can create anything why would they pay each other? So why do they need money?
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