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PaperclipPerfector  1mo ago (text post)   31395 thread views

Culture War Roundup for the week of September 30, 2024

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I suggest you read about the microeconomic term "comparative advantage".

Right back at you.

I hate it when people brandish "comparative advantage" as a talisman against the idea of technological unemployment, illustrating that they fail to understand it. Ricardo, the very economist who originally coined the term "comparative advantage" recognized that technological unemployment was still possible, even likely, despite it.

"Comparative advantage" says that the value of an individual's labor will never fall to zero, and that they will still be better off specializing in something, and trading the products of that specialty for the things they don't specialize in, than if they try to be fully self-sufficient. It does not at all guarantee that the maximum value of an individual's labor, when they specialize in their comparative advantage, cannot fall below their cost of living. Indeed, there are some people alive right now, among the most severely disabled, whose labor is worth less than what it costs to keep them alive. There's nothing in "comparative advantage" that prevents large portions of the population from joining them.

I'd point to this quote from economist Karl Smith back in 2012:

My longer thesis is that the rising return to unskilled labor is a function of industrialization and that industrialization is unique in this. The wage rate on unskilled labor never benefited before and its not immediately clear that it will ever benefit again.

This is because rents always accrue to the scarce factors of production. Industrialization meant that the only thing we were short on were “control systems” everything else in the production process was effectively cheap.

However, any mentally healthy human being is a decent control system. So, this meant huge returns to being a human. It also meant collapsing returns to being a horse. Though, people think of this as a difference in kind, I urge you not to. Horses are not so different than you and I.

As it so happened the wage rate for horses fell below sustenance and they died off. There is simply no basic reason this cannot happen to humans, save for the fact that other humans will enact policies to stop it. The market itself will not differentiate.

See also Smith in Forbes here. I can't find the specific passage at the moment, but I remember Gregory Clark in A Farewell to Alms also making a similar comparison to what happened to horses as an example of what could await most of us.

While human wants may be infinite, jobs depend on humans being able to meaningfully contribute to the production of those wants. Humans are finite, and thus, I would argue that our capacities are finite, and thus, the number of ways we can meaningly contribute to the production of goods and services is ultimately also finite. I'll point to Kevin Kohler's Substack post here:

So, are we destined to eventually follow the path of the horse in the economy? Daron Acemoglu & Pascal Restrepo (2018) argue that “the difference between human labor and horses is that humans have a comparative advantage in new and more complex tasks. Horses did not. If this comparative advantage is significant and the creation of new tasks continues, employment and the labor share can remain stable in the long run even in the face of rapid automation.” In other words, the high human general intelligence allows us to be more adaptive and shift to new tasks as the automation of more established tasks rolls forward.

The economists Anton Korinek & Donghyun Suh (2024) have created a model specifically considering why humans might run out of new tasks in the face of AGI and what would happen to wages in such a scenario. Their basic approach is that all possible tasks that could be performed by humans are ordered in terms of computational complexity and as digital computation expands more and more tasks can be automated moving the automation frontier from left to right. This is essentially a restatement of Moravec’s metaphorical landscape of human competences and automation (see figure below). In this metaphor the peaks reflect the most complex human competences, whereas AI automation is represented as a rising tide that continuously moves the shore line up.

…

If the complexity of economic tasks performed by humans is bounded (in other words, if there is no infinitely high mountain in Moravec’s landscape of human competences), automation will eventually cover all tasks, leading to complete automation. In the short term, automation increases productivity and boosts wages for non-automated tasks. In the long term, humans run out of tasks at which they can outperform machines and the labor share of income collapses fairly steeply as we approach full automation.

…

My judgement is that it’s likely that AI will eventually be able to outperform humans even on tasks with unbounded complexity and irreducible uncertainty. First, in some domains the ability of AI to perform complex tasks can already not be matched by humans. No human can filter mails or social media posts based on 10’000-dimensional decision boundaries. Second, the exponential growth of parameters in artificial neural networks means that, given enough training data and compute, AI can represent an exponentially growing amount of complexity, whereas our biological neural networks have fairly fixed upper limits.

…

If, at some point in the future, AGI can work at or below the cost of human labor and masters the meta-ability to learn novel tasks at least as quick and as well as humans, we have permanently lost the reskilling race. Then, new tasks can be automated as quickly as they are created.

And what this leaves out, is that human capacities are not only finite, but unequal; some of us will "run out" of ways to meaningfully contribute — again, the value of contributing will never hit zero, but it can fall below subsistence — before others. (As a disabled individual surviving by parasitizing of hard-working taxpayers via the public dole, this is quite an acute point for me.)

Ok, let's work through this. Let's actually start here:

Indeed, there are some people alive right now, among the most severely disabled, whose labor is worth less than what it costs to keep them alive.

I agree that there are, and have always been, severely disabled people who are simply unable to support themselves.

"Comparative advantage" says that the value of an individual's labor will never fall to zero, and that they will still be better off specializing in something, and trading the products of that specialty for the things they don't specialize in, than if they try to be fully self-sufficient.

Here, you acknowledge, but skip right over something key. You acknowledge that being fully self-sufficient is a lower bound. That is, excepting the severely disabled, the vast vast majority of able-bodied humans can, indeed, be self-sufficient, as evidenced by millennia of history. Comparative advantage means that you will be better off than being self-sufficient, by your own acknowledgement.

It does not at all guarantee that the maximum value of an individual's labor, when they specialize in their comparative advantage, cannot fall below their cost of living.

But here is where you contradict yourself. You just said that they will be better off than being self-sufficient. That is, better off than their cost of living.

humans are horses

Humans are not horses. They're still not horses. This is literally a meme on the badecon subreddit, for good reason. Humans have agency, can understand (or at least act as if they understand) opportunity cost and comparative advantage. Like, the primary things under discussion here are a major reason why humans are not horses. Horses are more like hammers than they are humans.

Humans are finite, and thus, I would argue that our capacities are finite, and thus, the number of ways we can meaningly contribute to the production of goods and services is ultimately also finite.

Sure. Irrelevant, but sure.

automation will eventually cover all tasks, leading to complete automation

You're telling me that delivering me an even better standard of living than I currently have is going to be fully automated? And the marginal cost of such automation is going to be basically zero? (At the very least, lower than the cost of convincing someone to switch from their life of abundance and leisure to helping out.) Huh. Sounds pretty nice.

Like, what is even your model here? A magic robot that can provide all your food, shelter, luxury desires, etc., it costs how much? Why does it cost that much? Who is being paid when one is purchased? It must be obscenely cheap to beat out how cheap those things would be otherwise. $10? $100?

some of us will "run out" of ways to meaningfully contribute — again, the value of contributing will never hit zero, but it can fall below subsistence

Nah, you already agreed that subsistence is a lower bound for anyone who is not severely disabled.

Here, you acknowledge, but skip right over something key. You acknowledge that being fully self-sufficient is a lower bound. That is, excepting the severely disabled, the vast vast majority of able-bodied humans can, indeed, be self-sufficient, as evidenced by millennia of history.

He said:

than if they try to be fully self-sufficient.

To try is not to be.

Right in that first block quote is:

That is, excepting the severely disabled, the vast vast majority of able-bodied humans can, indeed, be self-sufficient, as evidenced by millennia of history.

That's your block quote. The second quote in my comment is from Capital_Room. They do not match as you say they do.

I'm really not following what you're trying to say. Can you try again? Capital_Room did, indeed, use the word "try". You pointed out that there is a gap between "try" and "be". I pointed out that I've already covered that gap with empirical evidence. I have no idea what you're trying to say.

Even if we assume your empirical evidence is sufficient to ensure humans can be self-sufficient (now and always), Capital_Room did not acknowledge that and you base much of your post on a gotcha that he allegedly did.

Sure. He has not yet actually assented to the empirical evidence that people can mostly be self-sufficient. I did not claim that he assented to this, and if he would like to disagree with this, he is still able to (so are you). I pointed out that he did claim that self-sufficiency was a lower bound for purposes of comparative advantage. I then also addressed his stated concern that a small class of people cannot attain self-sufficiency (e.g., severely disabled folks). But for all of the other folks, who I pointed out empirically can attain self-sufficiency, his lower bound holds that comparative advantage will still make them better off. Which would contradict his conclusion that a vast majority of folks will end up at sub-subsistence levels.

Now that we've cleared up that I have not claimed any assent to the empirical evidence and clarified further how the argument goes, do you have any objection to the logical portion of the argument? Or are you just happy that we've agreed that we're still waiting to see if he assents/objects to the empirical evidence?

I pointed out that he did claim that self-sufficiency was a lower bound for purposes of comparative advantage.

No, I claimed attempting self-sufficiency as lower bound. As the disabled illustrate, it doesn't mean one can succeed. And I'd dispute that most modern people could achieve self-sufficiency if they stopped specializing in their comparative advantage. After all, we're pretty much all "specialists," even the farmers. And there are the necessary resource inputs — try being self-sufficient without any land, for example.

the vast vast majority of able-bodied humans can, indeed, be self-sufficient, as evidenced by millennia of history.

No, for most of those millennia, many were specializing and trading (even if just within family/household/tribe). And, per Karl Smith, they held certain then-scarce factors of production, the value of which automation will drastically reduce.

Humans have agency, can understand (or at least act as if they understand) opportunity cost and comparative advantage.

Irrelevant.

Humans have — had — value because human brains were a scarce factor of production, there being no substitute. But now a cheap, plentiful substitute is coming. When supply goes up, price goes down. What steam and fossil fuel did to the muscle power of horses, automation will do to the brain power of humans.

And sure, the transition to mostly-automated luxury would be nice… were human beings uniform and perfectly fungible. The problem is in the middle, when large fractions of the population have become parasites upon the fraction that's still productive.

Many material resources will remain scarce even as the value of human labor declines, which limits how cheap the machines can become.

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I don't know if I'm missing something, but I occasionally harp about how even in an opyimistic scenario, comparative advantage is not looking like Rats expect it to pan out. It's not going to be automating away the drudgery so we can devote ourselves to artistic and intellectual pursuits, if anything it's shaping up to be automating away artistic and intellectual pursuits, so we can artisinally mine quartz for the Quartz God.

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