Robert Važan

AI economics brief

This is a very brief summary of economic and social implications of continued development of artificial general intelligence. Contrary to most other articles on this topic, I am focusing on the big picture, long-term outcomes, game rules, and endgame, all in as few words as possible.

First off, don't believe the skeptics. Language models like ChatGPT are indeed AGI (Artificial General Intelligence). AGI is not magic. It's not (necessarily) conscious or emotional. It's simply a machine that can perform an unbounded variety of tasks at a level comparable to humans. Language models undoubtedly satisfy this definition of AGI.

Growth constraints

Looking at AI benchmarks done over the last 10 years, we can infer there are only two rules for developing artificial intelligence. Firstly, neural networks (almost) always beat other AI algorithms. Secondly, larger networks (almost) always beat smaller networks, regardless of network architecture. There is no silver bullet. Consequently, there will be no revolutions, only gradual improvement.

Although the AGI problem is solved in principle, there's still a mountain of little problems that must be solved before AI replaces majority of human labor. These problems are diverse, but only three classes of problems fundamentally limit maturation of AI in the long term: hardware, training data, and adoption.

Using AI for industrial and home automation additionally depends on robotics, which has its own performance, cost, and growth constraints. Even though machines have outperformed humans in a lot of specialized tasks, human body is still far from obsolete when it comes to general labor.


Natural intelligence (brains) is a valuable natural resource, which is fairly evenly distributed among humans and it cannot be removed from the individual. This gives people bargaining power, which is probably behind past bargaining successes like freedom, democracy, and worker rights. Artificial intelligence upsets the power balance, because it can be hoarded and controlled by the rich and powerful while at the same time devaluing natural intelligence of ordinary people.

This dynamic will produce a number of surprising winners:

Hoarding of artificial intelligence and its benefits will happen simultaneously with increases in overall economic efficiency, which will mask deteriorating position of ordinary people for a while.


When machines were first introduced into the economy, lost jobs were regained via economic growth and shift to skilled labor. While this process will repeat to some degree with artificial intelligence, it will not fully compensate for lost jobs. Growth will be limited by scarcity of natural resources and there is no skill beyond general intelligence. Cheap and universal artificial intelligence and robotics will inevitably render most people uncompetitive.

Without intervention, the most likely course of events is that of evolution and natural selection. Humans will be forced to compete with machines and artificial intelligence. As artificial intelligence and robots improve, people will be forced to work for less every time. The technology will eventually improve so much that people will be unable to compete and they will be resource-starved, pushed to the fringes of the society, and eventually driven extinct. Standard evolution.

Evolution nevertheless assumes pure competition. People can use power to stay afloat in environment, in which they wouldn't be otherwise competitive. In a world of abundant artificial intelligence, natural intelligence is worthless and the only source of power is in ownership of natural resources. The ideal way to go about it is for government to own all natural resources on its territory, rent them to the highest bidder, and then divide revenue evenly among all citizens, thus closing the cycle of a utopian fully automated economy. This will disadvantage resource-poor countries, but in the long run, population size will match country's resources, so living standards should equalize everywhere even without any global government coordinating the process.

Collective resource ownership however does sound unrealistically ideal. Most people don't even realize there is a problem, let alone take action to manage it. Taking any action assumes functioning democracy that predominantly cares about well-being of citizens. Since citizens now have much smaller bargaining power, other mechanisms must exist to keep the country democratic and they must be stable in the long run. For government to be able to afford the scheme, it must not be in a resource-draining total war, but total war is exactly what artificial intelligence enables and encourages. That's a lot of assumptions, which is why my default prediction is evolution with eventual extinction of mankind.