Jevon's paradox says that if data centers can serve a lot more tokens per dollar or watt there will be increased demand for data centers.

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automatic6131 3 hours ago | parent [-]

Jevon's paradox isn't a physical law, it doesn't magically apply to everything. Millions more copies of Atari's ET game didn't cause everyone to pickup a cheap copy, and cause extra demand for a garbage video game. Some times (actually, usually, I'd argue) things are made that will sell for less than the cost of construction because of irrationality, and they don't induce extra demand and they don't change the negative profit margins.

You can't simply wave Jevon's paradox at things. Thousands of miles of canals were dug in the UK that couldn't be sustained and were abandoned. Thousands of miles of railways were laid that could be sustained and were abandoned. And those are potentially durable investments, unlike cheap walls, pillars and roofs laid over a levelled concrete slab full of fast depreciating IT equipment.

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bryanlarsen 3 hours ago | parent | next [-]

It's true that Jevon's paradox doesn't always apply, although this does seem like a classic case.

But yes, if sold for a negative margin Jevon eventually stops because the decreasing supply will drive up prices.

> things are made that will sell for less than the cost of construction

Price is set at the marginal cost. Capital costs aren't in marginal costs.

You'll need a better counter-example than UK railways which suffered from Parliament price-fixing.

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js8 2 hours ago | parent | prev | next [-]

I agree, but I would say what the parent is saying is more akin to Say's law: https://en.wikipedia.org/wiki/Supply_creates_its_own_demand

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jackb4040 2 hours ago | parent | prev [-]

> You can't simply wave Jevon's paradox at things

I'm so glad the tide here is turning on this talking point, brought on by exactly the same people beating us over the head with it for months while no progress is made towards it materializing.

Many, many people who post here are capable neither of real analysis nor distinguishing real analysis from memes. They aren't hackers, they are adherents of a cult that happens to focus on the same subject matter as hackers.

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anthonypasq 31 minutes ago | parent | next [-]

Jevon's paradox only applies to products with near infinite demand. Energy being the most famous example. I dont think its difficult to argue that compute/intelligence is also a base input into the economy and theres almost no limit to the amount of intelligence the world will want.

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qlte an hour ago | parent | prev [-]

Jevon's Paradox, RSI, revealed preference

	▲	jackb4040 24 minutes ago \| parent [-]
		Jev, ASI, RLHF, Jev, Jev, water usage