Our AI writing assistant, WriteUp, can assist you in easily writing any text. Click here to experience its capabilities.

AI is not going to make things cheaper (hidden fees and costs will persist)

View Original View Raw

Summary

Marc Andreessen's article on why AI will save the world has been widely praised for its optimistic tone. However, despite the potential for AI to increase productivity and create new jobs, it is unlikely that it will make everything cheaper due to hidden costs such as planned obsolescence, recurring services, Veblen goods/luxury goods, shrinkflation, enshitification, the Baumol effect, and the difficulty of automating menial jobs. AI may make certain things cheaper, such as writing essays, but it is not likely to usher in an era of post-scarcity or everything being cheap.

Q&As

What is the tone of Marc Andreessen's article 'Why AI Will Save The World'?
The tone of Marc Andreessen's article 'Why AI Will Save The World' is breathlessly optimistic.

What is the Lump of Labor Fallacy?
The Lump of Labor Fallacy is the idea that technology will destroy jobs, when in fact technology's track record of destroying jobs is surprisingly poor.

What strategies have companies used to maintain profits despite the introduction of new technology?
Companies have adapted with the times by using planned obsolescence, recurring services, Veblen goods/luxury goods, sticky prices, shrinkflation, enshitification, and the Baumol effect.

What are some examples of goods and services that remain expensive despite automation?
Examples of goods and services that remain expensive despite automation include private jets, iPhones, healthcare, and vehicle insurance.

How will AI make some jobs or services cheaper with minimal hidden costs?
AI will make some jobs or services cheaper with minimal hidden costs, such as writing boring, tedious high school or college essays.

AI Comments

👍 This article provides an insightful and in-depth analysis of the potential economic implications of AI on our society. It is well-written and thought-provoking.

👎 This article fails to address other potential effects of AI on our society, e.g. social, ethical, and political implications. It also fails to provide any concrete solutions or recommendations.

AI Discussion

Me: It's about how AI is not going to make things cheaper and there will still be hidden fees and costs. Even though technology can increase productivity, prices are still going to stay high. Companies are going to adapt and corporate profits are the highest they have ever been. The article also talks about how there are many economic forces that keep prices high, including planned obsolescence, recurring services, Veblen goods/luxury goods, shrinkflation, and the Baumol effect.

Friend: That's interesting. It seems like AI is not going to be a quick fix for making things cheaper. It's interesting to see how companies are adapting and using technology to their advantage. What do you think the implications of this article are?

Me: I think the implications of this article are that while AI is definitely going to be a major part of the economy in the future, it's not going to be a quick fix for making everything cheaper. Companies will still find ways to make money, and prices are still going to stay high. It also means that people need to be aware of the hidden costs and fees that may be associated with AI-based services or products. It's important to understand the economic forces that keep prices high and be aware of the potential hidden costs.

Action items

Research the economic forces that keep prices high despite automation, such as planned obsolescence, recurring services, Veblen goods/luxury goods, shrinkflation, enshitification, the Baumol effect, and the difficulty of automating menial jobs.
Analyze the cost-benefit of using AI to automate certain jobs or services, such as writing essays or paper mills.
Consider the potential hidden costs of using AI, such as worse user experience, more ads, and more personal user information harvested for ad-optimization purposes.

Technical terms

AI (Artificial Intelligence): Artificial intelligence (AI) is a branch of computer science that focuses on creating intelligent machines that can think and act like humans.
Lump of Labor Fallacy: The lump of labor fallacy is an economic theory that suggests that there is a fixed amount of work available in an economy, and that technological advances will not create new jobs.
Planned Obsolescence: Planned obsolescence is the deliberate shortening of a product’s life cycle in order to increase sales.
Recurring Services: Recurring services are services that are billed on a regular basis, such as monthly or yearly.
Veblen Goods: Veblen goods are luxury items that are in high demand due to their high price.
Shrinkflation: Shrinkflation is the practice of reducing the size of a product while keeping the price the same.
Enshitification: Enshitification is the practice of reducing the quality of a product while keeping the price the same.
Baumol Effect: The Baumol effect is an economic theory that suggests that labor costs will remain high despite technological advances, as certain jobs are difficult to automate.