Did you know that your refusal to purchase new devices is destroying the economy?
It’s true, at least according to CNBC, the people who sell devices, and various economists. The problem, you see, is that you — yes, you personally. They see you there, sitting all smug with a three year old phone — are not buying enough stuff. You used to go out and buy new gadgets every year or two and now you don’t. And that is making the economy sad. You shouldn’t make the economy sad, even if it is better for your own pocket book. Because, you see, that decreases economic dynamism, and that is bad. A sad economy helps no one.
Snark aside, and what I am about to say is not a revelation by any means, but I do not think that the people who are in charge of our economy — business people, the people who report on business people, and the politicians who support businesses people — understand just how precarious the economic situation actually is. People do not buy new devices for largely three reasons. They cannot afford them, they are concerned about their impact on the environment, and devices aren’t improving very much year over year. The problem, of course, is that the tech business is actively opposed to solving any of those problems.
First, the devices are not getting any better anytime soon. Some of this is that the low hanging fruit has already been picked, so to speak. The phones, computers, TVs (now that people have rejected 3D), tablets, etc. are all pretty mature categories. There are no easy advances to be made. Things like new form factors are going to be harder to create, perfect and market than the huge jump from a flip phone to a smart phone, for example. Which means that many firms are focusing on imitative AI. The problem, of course, is that most of the imitative AI features do not add a lot of value to devices, and so most people aren’t willing to shell out more for them.
Worse, imitative AI is a known environmental disaster. So people who are concerned about the environmental cost of their devices are going to be less likely to change to a device whose primary feature is imitative AI. Even worse, the leaders of these firms are completely dismissive of environmental concerns. Some of them, like Musk, are actively making people sicker in the service of their imitative AI goals, and none of these firms are living up to their previous environmental goals. Instead, they are abandoning them in support of stuffing more and more imitative AI into every product, even though they acknowledge that imitative AI is likely a bubble. Why? De-employment.
Almost everyone acknowledges that imitative AI is in some form of a bubble. But firms keep piling into it regardless. Why? Because they believe that they will eventually be able to fire enough people to make significant profits from the services. The Trump Administration’s AI plans are a bet on that future. The problem, of course, is that given the amount of money running imitative costs, they need a truly enormous amount of jobs to be eliminate to make actual profits. Tech firms are claiming to eliminate jobs because of imitative AI — but most analysts believe those are either short term attempts to goose stock prices or reactions to over-hiring during the pandemic. But let’s assume that they are right and that imitative AI is going to eliminate knowledge workers as a class. Who, then, is going to buy their products? And if even if this is just a con to keep the stock price floating long enough for executives and investors to cash out before the bubbles bursts, how is convincing people they are all about to lose their jobs conductive to a robust consumer economy?
It’s not, obviously. And that is the problem. Because of the rise of monopolies and the decline of labor power, productivity gains have enriched the rich, not the employees. We have an economy based around consumption whose basics — housing, food, education, child care, health care — have been increasing much faster than incomes for decades and where consumers have been receiving fewer and fewer of the benefits of their labor for decades. And now the plan is to replace entire industries with imitative AI, reducing the purchasing power of the collective consumer even more. But said consumer not buying a new phone every year is what makes the economy sad.
We have an economy that is simply broken and whose main drivers seem intent on breaking it further. Even if their dreams of avarice and destruction never come to fruition, their constant propaganda in favor of avarice and destruction will do plenty of harm in the meantime. Consumers are not the reason the economy is sad. Wholesale economic destruction by the captains of industry and their supports is.
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