Wednesday, August 17, 2016

Will AI Break Capitalism?

Why AI will break capitalism by Henry Innis

My reply...


Which is better for capitalism… brain drain or gain? Also, why do you assume that brainy AIs will be owned?

I think that even stupid people can understand that brain gain is better for capitalism. Or can they? Can stupid people understand where opportunities come from? Do opportunities come from doing dumb things with society’s limited resources? Are you going to create many opportunities by farming poison oak? Of course not. Are you going to create many opportunities by farming artichokes? Of course… assuming you’re a decent farmer. Opportunities obviously come from doing smart things with society’s limited resources.

The more smart people a society has, and the freer they are to use society’s limited resources… the more opportunities there will be for everybody.

One thing about smart people is… they know that if they want to truly understand something… for example capitalism… then they actually have to study it. And if somebody has even studied capitalism a little bit… then they would know that the number one book that they have to read in order to understand capitalism is Adam Smith’s Wealth of Nations

Slaves, however, are very seldom inventive; and all the most important improvements, either in machinery, or in the arrangement and distribution of work which facilitate and abridge labour, have been the discoveries of freemen.

And once you read Smith then you have to read Hayek…

Of course, the benefits we derive from the freedom of others become greater as the number of those who can exercise freedom increases. The argument for the freedom of some therefore applies to the freedom of all. — Friedrich Hayek, The Case for Freedom

Capitalism doesn’t care whether you’re black or white, male or female, gay or straight, short or tall, human or other… what capitalism depends on is…

1. intelligence
2. numbers
3. freedom
4. communication

Capitalism depends on large numbers of intelligent people who have the freedom to 1. use society’s limited resources and 2. clearly communicate their true valuations of other people’s products.

Right now I can see that 181 people like your story. Medium makes it stupid easy for your readers to communicate their appreciation for your story. All your readers had to do was take a second and click the *heart* button. But does clicking the heart button communicate your readers’ true valuations of your story? Of course not. We can see, at a glance, how popular your story is… but we can’t see, at a glance, how valuable your story is.

Does it matter that we can’t see, at a glance, how valuable your story is? Medium doesn’t seem to think so. I sure think so.

The fact is that Medium is breaking capitalism… and here you are on Medium worried about AI breaking capitalism. First worry about humans breaking capitalism… and then there won’t be any need to worry about AIs breaking capitalism.

In order to make it stupid easy for people to communicate their valuations of your story…. Medium could simply add some coin buttons…

If Bob values your story more than nothing but less than a penny, then he’d click the empty heart button. If he values your story at a penny… then he’d click the penny button and a penny would be instantly withdrawn from his wallet and deposited into your wallet. Once you had enough pennies in your wallet… you could cash out and Medium would take a very fair and reasonable cut.

Of course this method won’t entirely solve the free-rider problem… but it will definitely solve the payment problem. How big is the payment problem? Once valuing a story is as easy as “liking” it… then I’m sure lots of people will be happy to do so. What’s a few cents? Not much… but if enough people give you a few cents… then it can add up.

One solution to the free-rider problem would be to switch over to a pragmatarian model. Each month each member would have to pay $1 dollar… but they could choose which stories they allocated their pennies to. If most members spent all their pennies half-way through the month… then the fee could be increased to $2 dollars/month. As the size of the pie increased… so to would the incentive for better writers to join Medium. The result would be a virtuous cycle.

The pragmatarian model could of course be applied to countless websites. Doing so would vastly improve capitalism. Then capitalism would be even more improved thanks to the brain gain, and freedom, of AI.

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