I've been thinking about this recently. Ai is poised to replace a lot of mundane, entry-level type work. People see this as a bad thing and understandably so.
At the same time, we're facing a demographic issue across most developed countries. COL is too high, no one is having kids, and populations are due to shrink (or are already shrinking in some Eastern countries).
Could Ai potentially make up for this population shortfall? Could it pick up economic slack or would the decrease in consumers be too much for economies to handle? Is more trade school and less university education the answer since Ai can't do as much manipulation of the physical world?
How would we replace lost wages for workers displaced by Ai (probably wouldn't)? How would we re-think economic models with less consumers in a consumer driven economy?
Could net immigration help with shrinking populations without causing societal and cultural issues like Europe is dealing with? Do we even want populations to not shrink (ie no one can afford a house, so less people means less competition for resources like housing)?
I think this is a pretty big issue humanity needs to address in the next 20 years or we're looking at an existential threat to our modern way of life.
All I know is, everyday I get more of an entrepreneurial itch to open up a physical store selling consumer goods I'm interested in (sport goods) in a chill, quaint small town by the water.
Probably will never do it but the world just seems to suck now with AI popping off and the Corporate America job market being arguably the worst since 2008.
I wish we revert back to the good old times of more independent business and competition through fragmented industries but I know that's never going to happen.
That comment floating around that says "We're all nostalgic for a place and time that no longer exists" rings truer every day.
Felt this.
Which time was this? Antebellum, non-slaveholding New England?
You're nostalgic for a time that never really existed.
The period of time that comes to mind is Amsterdam trade pre-Dutch East India Company around 1600.
The post seems to imply population shrinkage is a problem for an economy, and I think that's something people too readily assume. Population shrinkage is a problem for the individuals who placed bets on the future population being high. That of course means a lot of investors, which can create the false impression that the broader economy is hurting. But every loser has a winner. More resources for everyone else.
The other confusion of population-growth bros is this clearly flawed idea that we need more young workers to pay into the retirement system to support the older workers. That only makes sense if the additional workers have come with additional socially-beneficial jobs to do. Otherwise its just creating more welfare cases. Not to mention the ponzi-ish logic behind the thinking of always needing to grow the younger group to pay for the older group.
Other than some really minor benefits of economies of scale, I don't see much of an argument that growing the population is key to economic prosperity.
AI will make the cost of living cheaper. That's great for most people. Not great for the knowledge workers who were making a killing off a skill set that was rare before AI but won't be rare after AI. Sadly that does include finance folks, consultants, lawyers, programmers . . basically all of us on WSO and our friends and families.
But that group, even if its all of us here on WSO, is only 20% of the US and a smaller % of other countries. So I don't expect society to listen to our pleas that "our way of life" is under threat. It's not their way of life, its only ours.
Very much agree that the population shrinkage being taken as a problem is the consensus view, and one which I actually think is wrong. This was 100% true in the pre AI paradigm, but in the post AI paradigm the productivity per person should massively ramp up which denotes a smaller pop. Pair that with fewer heads needed within our existing white collar job infrastructure (and eventually blue collar as well as you layer on automation), and it makes more sense to have a shrinking pop. This of course ignores new job creation in industries we don't even know of yet today, but either way you don't need to scale heads with GDP as closely anymore
I think the issue is not so much the future but the present. For better or worse, we have a Ponzi-esque scheme right now. If you want to break that cycle, you have to break a pretty fundamental promise of the modern social contract. Politicians are really bad at making hard choices in general, and certainly not on a scale like this, so it shouldn't be a surprise that everyone is concerned about a moment in time where the we can't kick the can down the road any longer.
I agree with you that there is no fundamental reason why populations must grow to ensure economic prosperity. But I think the break point when we have that paradigm shift will be far more powerful, far more influential, far more important than AI itself. AI may help us get over that hump, but AI isn't going to fundamentally change society. Recognizing the fact that the way in which most advanced economies have structured their social contract is going to have to be torn up and rewritten, and actually adapting to that, is going to be a far bigger sea change.
Best I can to is more bombs for Israel and a billlion human locusts with fake degrees
OK so I think you're saying that for now, we have to keep doing what we've been doing which is to grow the population to support older people.
The problem with that is, it worked in the past because we actually needed more people for their labor. Look at GDP growth of developed countries 50 years ago vs. today. Or even 25 years ago. There was actual work to do such that more people = more shit getting done and thus more prosperity for everyone.
We're tapped out on that now. It's not temporary. Growth steadily declines as a society matures. The good news is that it doesn't need to keep declining. It can level off. But so too will the population. Otherwise we're just birthing liabilities.
I would suggest anyone interested in this, think about a single person's lifetime. You're a liability until you finish school. Parents & loans support your life. Then you become an asset for 50 years, earning more than than you spend and paying into the social welfare system. Then you become a liability again in retirement, for about another 20 years give or take.
We need those ~50 working years to cover the first 20 and the last 20. It's not doing that currently, as evidenced by our growing national debt and unfunded liabilities.
And its poised to get worse. We are increasing lifespan faster than healthspan, making retirement even longer. Instead of 50 working years covering 40 liability years, it could be come 50 to 45 or 50 to 50.
So I think we need to ask honeslty whether we already have too many people, and whether a shrinking population might be the one thing that's going in the right direction.
I'm not saying we have to do anything. I'm saying that the reality is, no one is going to do anything to change the system as it exists, because that involves making hard choices that betray some pretty fundamental promises made in the modern social contract. To the extent that anything is going to upset the apple cart and represent a paradigm shift for society in the future, it's going to be that. The abrogation of a generations-long compact between citizens and state. And that is going to have a far greater impact on the world than AI will.
I'm not sure I agree that we're birthing "liabilities". If that were the case we'd long since be past that point.
I'm not sure I fully agree with this either. I do for the last 20 years, of course, but I'm not sure there is any even indirect connection between childhood dependency and working.
And our national debt is a reflection of a population that wants everything, wants it now, and doesn't want to pay for it.
I think if you're asking "do we have too many people?" you're asking the wrong questions. Rather than say "ignore the single most important biological imperative the species has" maybe we should just discuss raising the retirement age?
Again, without agreeing or disagreeing with your underlying position, this is the problem with society in general. Everyone wants to avoid a difficult discussion, or even the suggestion of sacrifice. Instead of doing the obvious thing, which is to tweak the system to reflect the differing realities of the modern era, the suggestions are about having more or fewer children. That is insane.
There is no fundamental reason a growing population is a problem, nor that a shrinking population is a problem (to some extent). We have plenty of solutions to hand to deal with either in a way that doesn't break the social compact - we just don't have the political or collective will to actually do any of that.
I made a really long post about Ai and how its affects are really overblown in a lot of ways, I'll link here
www.wallstreetoasis.com/forum/investment-banking/future-of-the-industry…;
It's an interesting thought, that Ai could help with population and such, but that isn't really the problem with population decline. Population decline reduces the simple math, of less working class people supporting the economy as a whole. Now, we've largely been able to avoid the absolute worst of this because of a few reasons. 1. stockpiling of cash into pensions and funds like social security, and 2. lack of children being born means less money going towards kids, more money going towards retirees. It's a dependent ratio that has remained steady due to the lack of children being born, but eventually that ratio breaks and we see the real issues.
Maybe I'm wrong in my assessment, but I truly believe the 2 biggest issues facing society are the debt load and lack of natalism. Both of these things are ticking time bombs that, when combined, are going to blow everything up. Immigration helps, but ultimately you're not getting the same benefits from immigrants that you might see from domestic growth.
Your point on consumers is interesting, and we do have an example case: Japan. In fact, all of these issues can be modeled with Japan. Japan is where the whole world is likely headed if we continue on this path. And what is happening in Japan? Increased reliance on exports and a decades long deflation due to the population decreases.
The point on trade schools, generally disagree, and it's simply because if Ai is smart enough to replace most white collar work, it means we're just a few years away from robotics that can replace human blue collar workers. I've worked in robotics labs in university. The problem with robotics is rarely ever the hardware. The hardware is the easy part. The software is the issue, and if you can use Ai for that software then replacing people for blue collar work isn't all that hard.
Maybe I'm ranting a bit here, going off track, but I don't see Ai as this great threat or this great savior. If you read my comments in the post you get a better general idea of why this is, and also why we shouldn't plan our future around some grand Peter Thiel vision. Ai won't come to save us. It's up to us, as a population, to actually do something about this. Otherwise, we're looking at a crisis.
universal basic income for starters and higher tax on on corporations. stop immigration madness, zero income tax for women who have 3 children, and let AI unlock insane productivity from the high skilled workers
Nostrum itaque magni nisi distinctio ipsum ullam libero. Voluptatem nisi sit iste sapiente eveniet dicta qui. Impedit blanditiis velit sit officiis expedita.
Aut magnam possimus quasi et maxime quis ea. Ratione qui iusto quibusdam.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...