[delayed]

"Baumol's cost disease hurts the lower classes by restricting their access to services like health care and education, and LLMs/agents make it possible to increase productivity in these areas in ways which were once unimaginable."

You've expressed very clearly what LLMs would have to do in order to be economically transformative.

"If you can get high quality medical advice for effectively nothing, if you can get high quality individualized tutoring for free, that's a pretty big game changer for a lot of people. Prices on these services have been rising to the stratosphere over the past few decades because it's so difficult to increase the productivity of individual medical practitioners and educators. We're entering an era that could finally break this logjam."

It's not that process innovations are lacking, it's that product innovations are perceived as an indignity by most people. Why should one child get an LLM teacher or doctor while others get individualized attention by a skilled human being?

Quantitative measures of this are very poor, and even those are mixed.

My subjective assessment is that agents like Copilot got better because of better harnesses and fine tuning of models to use those harnesses. But they are not improving in the direction of labor substitution, but rather in the direction of significant, but not earth-shaking, complementarity. That complementarity is stronger for more experienced developers.

Because that car repair company with 3 local stores previously couldn't justify building custom software to make their business more efficient and aligned with what they need. The cost was too high. Now they might be able to.

Plenty of businesses need very custom software but couldn't realistically build it before.

What makes you think they'll be doing the same thing?

There’s always more problems to be solved. Some of them just weren’t financially feasible before.

But do they need to? If a <role X> job at a top tier company making $600k is eliminated and two <role X> jobs at a "more average" company making $300k replace it; is that really a bad thing? Clearly, there's some details being glossed over, but "one job paying more than a person really needs" being replaced by "two jobs, each paying more than a person really needs" might just be good for society as a whole.

There's likely going to be a separation between the top earners and the average.

IE. If a top tier dev make $1m today, they'll make $5m in the future. If the average makes $100k today, they'll maybe make $60k.

AI likely enables the best of the best to be much more productive while your average dev will see more productivity but less overall.

Maybe software engineers will be like your personal lawyer, or plumber. Every business will have a software engineer on dial, whether it's a small grocery store or a kindergarten.

Previously, software devs were just way too expensive for small businesses to employ. You can't do much with just 1 dev in the past anyway. No point in hiring one. Better go with an agency or use off the shelf software that probably doesn't fill all your needs.

I think you're being sarcastic? I'm not sure.

Anyways, this is the start. Companies are adjusting. You hear a lot about layoffs but unemployments. But we're in a high interest environment with disruptions left and right. Companies are trying to figure out what their strategy is going forward.

I don't expect to see a boom in software developer hiring. I think it'll just be flat or small growth.

> Long-term, they will need none. I believe that software will be made obsolete by AI.

I think this is a bit hyperbolic. Someone still needs to review and test the code, and if the code is for embedded systems I find it unlikely.

For SaaS platforms you’ll see a dramatic reduction, maybe like 80% but it’ll still have a handful of devs.

Factories didn’t completely eliminate assembly line workers, you just need a far fewer number to make sure the cogs turn the way it should.

> Why use AI to build software for automating specific tasks, when you can just have the AI automate those tasks directly?

Speed, cost, security, job/task management

Next question

It's not that simple. If a poor person makes zero dollars how much of the reduced cost item could they now afford?

We have a massively distorted economy driven by debt financialization and legalised banking cartels. It leads to weird inversions. For example as long as housing gets increasingly expensive at a predictable rate the housing becomes more affordable instead of less as banks are more able to lend money. The inverse is also true, if housing were to drop at a predictable rate fewer people would be able to get a mortgage on the house so fewer people could afford to buy one. Housing won't drop below cost of materials and labor (ignoring people dumping housing to get rid of tax debts as I would include such obligations in the cost of acquisition). Long term it's not sustainable but long term is multi-generational.

Or the goods will just go away if too few people are willing to pay their price, and only the lower-quality cheaper-to-make goods will remain.

"will" being the operative word here. High school level Econ makes no promises about WHEN prices adjust. Price setting is a whole science highly susceptible to collusion pressure. Prices generally drop only when the main competition point is price (commodities). In this case the main issue is that AI is commoditizing many if not all types of labor AND product. In a world where nothing has value how does anything get done?

This and other fairytales.

The only solution here is to stop tying people's value to their productivity. That makes a lot of sense in the 1900s but it makes a lot less sense when the primary faucet of productivity is automation. If you insist on tying a person's fundamental right to a decent and secure life to their productivity and then take away their ability to be productive you're left with a permenant and growing underclass of undesirables and an increasingly slim pantheon of demigods at the top.

We have written like, an ocean of scifi about this very subject and somehow we still fail to properly consider this as a likely outcome.

Cool concept, but this isn't 1980. We've been sold these sorts of concepts for 40+ years now and things have only gotten worse.

We have a K shaped economy. Top earners take the majority. The top 20% make up 63% of all spending, and the top 10% accounted for more than 49%. The highest on record. Businesses adapt to reality and target the best market, in this case the top 10 to 20%, and the rest just get ignored, like in many countries around the world.

All that unlocked money? In a K shaped economy it mostly goes to those at the top, who look to new places to park/invest it, raising housing prices, moving the squeeze of excess capital looking for gains to places like nursing homes and veterinary offices. That doesn't result in prices going down, but in them going up.

The benefit to the average American will be more capital in the top earners' hands looking for more ways to do VC style squeezes in markets previously not as ruthless but worth moving to now as there are less and less 'untapped' areas to squeeze (because the top 10-20% need more places to park more capital). The US now has more VC funds than McDonalds.

I don't know what economy you are looking at, because the opposite is usually true since humanity industrialized.

If goods aren't being sold, then the price will increase.

to the point of where the cost of bringing the goods to market or its opportunity cost exceed the price the market will bear. Its why people living in areas of material poverty don't just get everything on discount.

Solving unlimited power before solving unlimited greed invites unlimited tragedy.

I would say endless fighting against each other is a much more innate desire than work. I know I don't have one.