
HT: zerohedge.com
Celebrating humanity's flourishing through the spread of capitalism and the rule of law
05 Mar 2015 Leave a comment
in economic history, economics of media and culture, industrial organisation, survivor principle Tags: creative destruction, Google, legacy media

HT: zerohedge.com
03 Mar 2015 Leave a comment
in labour economics, labour supply, technological progress, unemployment Tags: artificial intelligence, Bryan Caplan, creative destruction, demand for labour, star trek, Star Trek replicators, supply of labour, technological unemployment
Bryan Caplan wrote a blog a few years ago, explaining the labour economics of artificial intelligence, using an exam question he poses to his graduate students:
Suppose artificial intelligence researchers produce and patent a perfect substitute for human labour at zero MC.
Use general equilibrium theory to predict the overall economic effects on human welfare before AND after the Artificial Intelligence software patent expires.
He then gave the answer about a week later:
While the patent lasts, the patent-holder will produce a monopoly quantity of AIs. As a result, the effective labour supply increases, and wages for human beings fall – but not to 0 because the patent-holder keeps P>MC.
The overall effect on human welfare, however, is still positive! Since the AIs produce more stuff, and only humans get to consume, GDP per human goes up. How is this possible if wages fall?
Simple: Earnings for NON-labour assets (land, capital, patents, etc.) must go up. Humans who only own labour are worse off, but anyone who owns a home, stocks, etc. experiences offsetting gains.
When the patent expires, this effect becomes even more extreme. With 0 fixed costs, wages fall to MC=0, but total output – and GDP per human – skyrockets.
Human owners of land, capital, and other non-labour assets capture 100% of all output. Humans who only have labour to sell, however, will starve without charity or tax-funded redistribution.
His logic is quite good. Caplan drew attention in the responses to his blog of Capt J Parker and Alex Godofsky in the comments section of his blog.

My comments at the time were as follows:
02 Mar 2015 Leave a comment
in economics of media and culture, industrial organisation, survivor principle Tags: creative destruction, legacy media
28 Feb 2015 Leave a comment
in economics of media and culture, industrial organisation, survivor principle Tags: creative destruction, legacy media
25 Feb 2015 Leave a comment
in technological progress Tags: creative destruction, forecasting errors, technological pessimism
12 Feb 2015 Leave a comment
in economics of media and culture, technological progress Tags: blogging, creative destruction, mechanisation, skill biased technical change, technological unemployment

It will be a slow train coming before they invent an angry paranoid blogger with every possible political view, conspiracy theory, taste in movies and humour, passionate scepticism and distain for anti-intellectualism depending on which menu button you click.
11 Feb 2015 Leave a comment
in economics of media and culture, technological progress, TV shows Tags: creative destruction, Douglas Adams, innovation, technology diffusion
09 Feb 2015 Leave a comment
in technological progress Tags: creative destruction, Facebook, innovation
HT: allday.com
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