Now I'm normally an optimist but I'm having a hard time figuring out how this ends well for most workers. Here is a take from Netscape founder and venture capital investor Marc Andreessen that highlights a particularly positive view.
This sounds nice but it doesn't add up.
1) Air travel
AI might save small amounts of fuel with real-time route optimization, predictive maintenance or scheduling but at best, you're cutting around 20% of costs and more likely just 10%. That could be passed on but flying would be highly inaccessible to 95% of consumers in a UBI world.
Mining and materials are already highly mechanized and energy-intensive industries. There are already many self-driving hauling trucks at mine sites but the wider applications can't radically change the economics of mining. Yes, there could be some real-time optimization, improved maintenance, labor reduction and process automation but at best you're reducing costs by 30% because AI doesn't do much to make it cheaper to break, haul and crush rock.
3) Manufacturing
In automotive -- which has decent wages -- factory labor accounts for 6-12% of the retail cost of a car if you add in R&D, engineering, and design labor that might double but it isn't a path to providing extremely cheap cars. There is some space of optimization in supply chains, quality control and energy but
I could go on with examples in agriculture, utilities, healthcare and construction.Three problems AI doesn't make cheaper are 1) hard physical limits 2) existing automation 3) infrastructure dependencies.
While I strong believe AI will be deflationary, it won't be enough to sustain the living standards of the millions who will lose their jobs. A 20-30% decline in costs doesn't fix an 80-100% decline in income. Moreover, any path to a new political consensus will be fraught.
This article was written by Adam Button at www.forexlive.com. Read More Details
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