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Forge the Sky

"Lastly, there is a recurring fear that AI will subjugate or even exterminate humans over resource competition, as depicted in many science fiction works. I believe that this is not a risk, since AI does not consume the same fuels that humans do other than electricity, which itself is becoming cheaper as described earlier. However, there is reason to believe that AI might elect to force humans into more productive/tech-advancing behavior, as determined by the goals of the AI. How this unfolds remains to be seen."

I disagree.

It's true that AI would consume different fuels than humans. However, a lot of the resources used to create human fuels can be redirected towards creating machine fuels. Instead of having a biological solar farm that creates calories in the form of, say, corn, machines would be incentivized to create solar farms that create electricity in their place.

AI risk is a very up-in-the-air field currently. The emergent characteristics that result from different starting conditions in the programming are very complex, and most of the arguments that claim to demonstrate that super-human AI is safe, or easy to make safe, do nothing of the kind.

If interested, this article does a good job summarizing what I think is the problem with this reasoning:

Kartik Gada

Forge the Sky,

Instead of having a biological solar farm that creates calories in the form of, say, corn, machines would be incentivized to create solar farms that create electricity in their place.

Maybe. I do think there is a chance that when AI can advance entirely without human assistance, then technologies that increase human living standards may plateau. Humans are not the 'end goal' of evolution at all, and AI is far more suitable for space exploration or 'biocosm/intelligent universe' outcomes than anything that needs air and water.

But I don't think resource battles are anything to worry about in the near term, since the high computational density of AI means that it will consume a significant amount of electricity until total aggregate AI intelligence is thousands or millions of times greater than that of 7-8 billion humans.

By the time AI is consuming even 1% of world electricity (let alone 20% or more), it might have already helped elevate world GDP per human capita to $100,000/yr or more. If there is to be conflict of a 'crowding out' nature at all, the 2040s would be the soonest when it could happen, and from a position of AI having thousands or even millions of times the power of all ~8 billion human brains.


"We have established earlier that while people have grown accustomed to seeing all forms of consumer technology continuously decline in price, very few take the next step and observe the ever-widening array of products that continue to merge into this river of technological deflation." Indeed

There is merge, then there is MERGE. Take for example, the smart phone. It actually replaces an alarm clock, a laptop, a radio, and several other devices. They have been merged into a single device. The river is becoming a trickle, with just a few devices proving all we need.

Kartik Gada

There is merge, then there is MERGE.

Yes, totally. You saw the iPod chart in Chapter 3.

But also keep in mind the other axis, which is that in the 1990s, the entire family had one landline phone (which had no other capabilities). Now a household of four may have 4 smartphones if the children are old enough. Tablets may be incremental.

So there is merger per device PLUS more devices per person.

The smartphone, at ~$600 without contracts or promos, is still expensive relative to, say, a laptop PC or even a 32-inch LED TV, so major price declines are still ahead of us as components fall in price and the majority of sales WW become upgrades..


One other bit of evidence you are right that you might not have considered: Stock prices.

Stocks have crashed recently on several occasions. each time the recovery has been ever faster. but why? Why do stocks rebound so quickly these days? Even from historic crashes?

There is nothing else worth investing in. Property is nice, but not mobile and convertible like a stock certificate. If interest rates are low, then bonds are not performing. Investment in stocks is investing, essentially, in the ATOM, because the companies productivity (and profits) grow with the ATOM. Bonds are not part of the ATOM, and in fact are being eroded and destroyed by the ATOM.

By the by, look at the burgeoning tiny house movement - people are seeking less, not because they can't afford more, but they are realizing they don't need more.

Kartik Gada


Yes. See the last section about how the tech sector is now 20% of the profits of the entire S&P500. That corroborates exponential, rather than linear, growth.


> the higher-paying human jobs are concentrated in very expensive areas

I would say it is the other way around. The concentration of high income leads to lifestyle inflation and city gentrification.

Kartik Gada


Cause and effect are mutually reinforcing, but it has proven notoriously hard for lower-cost locations to pull jobs away from NYC and SFBA, despite many attempts to do so.


"The smartphone, at ~$600 without contracts or promos, is still expensive relative to, say, a laptop PC or even a 32-inch LED TV." You said that in 2016.

An unlocked IPhone8 cost $348 in 2020. That's a generation better than the IPhone7 available in 2016. That is about just 4 years.

Of course a 32 inch TV now now costs around $100, and you can get a very decent laptop for $300. Both of which are measurably better in quality.

Kartik Gada


Yes. Thanks for reading through the whole thing again. Any useful links you come across, pls send over and I may incorporate them.

Note the point about the S&P 500. If ATOM-heavy companies are 25% of its value, one has to treat that as a leading indicator of that percentage of the entire economy converging into high-tech in the forseeable future.


"The Federal Reserve had the freedom to lower the Fed Funds rate all the way down to 1% in 2004, and while observers expected this would finally cause inflation, it still did not."
- It inflated the housing bubble. Not to speak of oil prices.

You seem to have no respect for gold bugs (part of that is understandable, as there is still no hyperinflation from '09) but what are your explanations of what went wrong in '71? If not for Nixon and gold.

Kartik Gada

Hello Eugen,

You may wish to read this entire publication.

I don't think gold bugs have any understanding of the current economic climate, because the fundamentals of 1971 are vastly different than today. Money printing no longer causes inflation, and gold has lagged the equity markets hugely in the age of QE. Technology can increase the supply of gold, so all the traditional 1971-era assumptions that gold bugs use are very obsolete.


Do you feel that lower inflation is the only reason for our lackluster technological progress? After all, universities and governments also are a significant source of research and it seems like they shouldn't be affected by inflation.

Kartik Gada

Hello Michael,

Insufficient NGDP (of which inflation is a component) is not the only reason for low technological progress. It is among the top three reasons, though. Unfavorable tax and regulatory frameworks are an even larger reason.

Chapters 6-10 can elaborate more.

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