> My prediction is no, because productivity gains must benefit the lower classes to see a multiplier in the economy.

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. The problem with services is that they're typically resistant to productivity growth, and that's finally changing.

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.

"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?

>If you can get high quality medical advice for effectively nothing

This is an area where a confident, but wrong information is extremely costly. It’s like saying an LLM can give you high quality directions on how to tap into a high voltage transformer. Sure, but when it’s wrong, it’s very very wrong with disastrous consequences. That’s why professions like doctors and Engineers are more regulated than others.

I didn’t know Claude Code could put a thermometer in my butt.

I'm not certain that a already observable negative impact of AI on some areas of education could be offset by "high quality individualized tutoring for free".

By the time it replaces doctors, nobody but today's investors will be able to afford anything at all. The X-shaped economy would have owners in the V and manual laborers (assuming this doesn't translate to gains in automation) in the ^. This outcome is worth avoiding...

Can a robot write a medicine prescription? A medical procedure prescription? If yes, that would be a game-changer. But the medical insurance providers would be very cautious about honoring these. Then, if things go wrong, what entity would be held accountable for malpractice?

You already can get a good-quality medical advice "for nothing", unless it requires e.g. a blood test. The question is, how actionable such an advice is going to be, and how even the quality is going to be.

Well, there's always wars as the way to get rid of people. I really don't rule out that the people that benefit from this sort of thing will purposefully steer the world in that direction because the poor won't have any choice other than to enlist as a way out of their situation, and never mind the consequences. You can already see some of this happening.

You're implying that insurance companies will allow prices to fall and lower their profits. That seems like a really unlikely event in the current economy. They fire a lot of doctors and nurses, but they won't lower prices.

I’m sick of this idea that “free” services are beneficial to society. There is no such thing as a free lunch; users are essentially bartering their time, attention, IP (contributed content) and personal/behavioral data in exchange for access to the service.

By selling those services at a cost of “free”, hyperscalers eliminate competition by forcing market entrants to compete against a unit price of 0. They have to have a secondary business to subsidize the losses from servicing the “free” users, which of course is usually targeted advertising to capitalize on the resources paid by users for access. Or simply selling to data brokers.

With the importance of training data and network effects, “free” services even further concentrate market power. Everyone talks about how AI is going to take away jobs, but no one wants to confront how badly the anticompetitive practices in big tech are hurting the economy. Less competition means less opportunity for everyone else, regardless of consumer benefit.

The only way it works if the “free” service for tutoring or healthcare is through government subsidies or an actual non-profit. Otherwise it’s just going to concentrate market power with the megacorps.

You could get high quality medical advice 20 years ago on the internet, or 40 years ago in the library. Doctors aren't there to give you advice, they are mostly gate keepers. Every person who's chronically ill knows that doctors are totally useless for anything beyond the 10 most common diseases and primarily exist to approve or reject your pleas for lab work. They won't go away, neither will psychotherapists and all the middle managers that can be easily automated, because their real purpose is not the practical work that they do.

> high quality medical advice

I'll replace my doctor with AI immediately after the tech bros do

lol