AI in the context of history
Thoughts
As of late, you can’t get away from AI, it’s hard to find an industry that isn’t impacted in some way. It’s actually frightening how much it has improved, and the speed. Understandably, people are worried about the impact on jobs.
I was watching an interview with Demis Hassabis the CEO of Deepmind, Google, he mentioned how it has the potential to generate massive amounts of wealth, which I don’t think anybody questions. He goes on to compare it to the industrial revolution, saying it’ll at least be as impactful.
Overall, it’s true that the industrial revolution did eventually improve average earnings and quality of life, but what is less well known is that initially, for the first two centuries of the industrial age, real incomes for the bottom 60%-80% of the population in Western Europe actually fell by 50%. The income gains were concentrated among a very small minority.
Along a similar vein, when humans transitioned from a hunter-gatherer lifestyle to agriculture, what followed was a sharp drop in quality of life, and what emerged was inequality and violence. Where hunter-gatherer tribes would simply move on and avoid conflict, now that your entire livelihood and work were in that farm, you had no choice but to defend against plunderers.
In the Demis interview, the interviewer raises the question of how it will be distributed. I think this will be key.
In a way, for the human race, it’s quite exciting. I guess one big difference in this AI revolution, when you compare it to the agricultural and industrial revolution, is that the latter two took power away from the average person. With agriculture, humans went from foraging the land for free food to doing backbreaking work for hours and hours and were subject to plunder. In early years of the industrial age, the factory owners became immeasurably rich, whereas the average person struggled to survive.
Whereas, arguably, AI has the opposite effect. Or at least levels the playing field. For example, back when I was in uni, when the iPhone had just been released and building apps was all the rave, having the technical skill was a huge barrier. Often, people with an idea would either have to pay tens of thousands or find an app developer and give them 50% equity. Now, you can get AI to build it for you and do a thousand other things that were traditionally a barrier to the average person with limited resources.
So I think it remains to be seen how it will impact society. As an investor, though, I feel quite bullish as I think overall productivity is going to skyrocket. The main thing is making sure it’s done in a fair way, and the wealth gaps don’t get too big.
What I’m Reading
Bad Blood: Secrets and Lies in a Silicon Valley Startup.
It has nothing to do with the Taylor Swift song, but is every bit as entertaining. In fact probably the most entertaining book I’ve read this year. I’m still halfway through and at some points in the book, I think that the events are so ridiculous that if this was a fiction book, I would have instantly put it down because the plot is so far-fetched, I would've got annoyed with the author.
But it’s not fiction at all, in fact it’s a retelling of Theranos, a startup whose premise was bringing to market this machine that supposedly could, from one drop of blood, be able to test for all diseases, started by 19 year old Elizabeth Holmes.
It’s very well researched from hundreds of interviews and email archives. It’s a fascinating look into human nature and behind the scenes in silicon valley.
Resource of the week
VPNs have a lot of attention as of late due to the online safety bill. I’ve been using NordVPN personally for years and have been happy with them.
Quote
"If there is anything I can do about the future, right now, I shall do it. Then I'm going to just leave it alone and settle down to enjoy the present moment, because all the experience of my life has shown me that I can only cope with things when they are present, not before they occur. And that the present always gives me the resources and the energy I need to deal with them."
Anthony De Mello-The Way to Love,
Hans