Okay little Uzi, I've been working on this for a while, so lemme break it down for you. The primary thing you're worried about is what's called "household income" - which is how families get money to buy groceries and pay bills. 🥑 Now, jobs and work are the PRIMARY way that households get money right now. But not the ONLY way! There are actually THREE sources of household income: jobs, government checks, and property. 💹 Like, how some people get welfare and retirement, that's government source. And some people get money from renting out houses they own and dividends from stocks. That's property. Now, as you rightly figured out, jobs are going away. In fact, jobs have been losing power for decades. But the core problem is household income. For the last few centuries, the primary way has been the wage/labor distribution mechanism. In other words, the primary way people participate in the economy is to sell their labor for wages. 🏧 It's been this way for SO LONG that people can't really imagine another way. But there is! It's called stock/flow, which is a fancy way of saying "live off rent and dividends" which is actually how most rich people live today. I call this Post-Labor Economics. Why? Because labor is going away! Now, you might wonder "well how do we get started if we're not rich already?" (This is the most common question!) The answer is that it takes some time, and there are actually many ways that the system, government, and companies can all help create this new economy! One example is to create what's called a Sovereign Wealth Fund. This is like a gigantic stock portfolio that the government runs on behalf of all the people, and pays them dividends, usually on an annual basis, or quarterly. That means you get some money just from being a citizen! 🇺🇸 But labor isn't gone yet, so there are other options to get more capital. One is for employees to own the companies they work for. In America, this is called an ESOP, and I'm England an EOT, and there are plenty of other countries with similar programs like cooperatives. Now, those are just two kinds of programs, but there are many, many more like them all over the world. Citizen dividends, cooperatives, trusts, rebates, and more! Eventually, what we can build is a layered portfolio, so that every household gets checks every month, quarter, or year, from many sources. National, local, and more. AND, on top of that, old school property can stick around, like rent and dividends from common stock. As you correctly point out, without consumer demand, the economy sort of implodes 😅 So, it's in everyone's interests to figure out Post-Labor Economics! There are a lot of other changes that need to happen for this to work, but just because there are many moving parts, doesn't mean it's impossible! For instance, right now, payroll tax and income tax provides most of the funding for the government. Well, if labor and wages go away, so does most of the government funding! Oops! 🫪 That means we would need to reconfigure the tax code to take more from companies and those who profit from AI and robotics and the automation that takes the jobs! Now, some people worry that we simply won't have enough resources to go around, that this can't possibly work. But think about it this way: if AI and robots and automation are good enough to take all the jobs, then they are probably good enough to make all the food, houses, and other stuff we need! Hope this helps 😁

I was literally just recording a video about this phenomenon of the fact that we seem to have crossed the threshold where quota is no longer the binding constraint, it is us. We humans are now the binding constraint in terms of our ability to consume what we're producing and our ability to learn and understand. Our metabolic throughput and our energetic throughput and our temporal throughput is now the bottleneck, not the intelligence of the models and not our quotas.

Post-labor Economics explained in 10 minutes How money and power will work in the age of full automation My book about Post-Labor Economics - "Labor Zero" is now available on Amazon for pre-order: The voiceover in this video was recorded organically, by hand. The animation and rendering were aided by AI (but not AI generated).

Most jobs are going away There’s an old concept called “derived demand” that says most labor is incidental to the outcome you want. That is bad. Essential demand for human labor is tiny. That means most jobs have no moat. I (and many others) have been circling the concept of “essential demand” for a long while. Essential demand for human labor is when the human is part of the product or service. Removing the human fundamentally alters the market offering. Otherwise, the demand for human input is derived; meaning it is secondary, incidental, or merely instrumental to the output. Consider RDJ as Tony Stark. Why does he sell movies? Couldn’t they just animate it with CGI or AI? Yes, but fans want to see RDJ specifically. There’s a reason that Disney is bringing RDJ back to the MCU. This is a prime example of essential demand. The essence of RDJ is nonfungible. But what about your house? You probably have no idea who built your house and you likely do not care. That means that all the labor that went into your house is derived demand. The humans who framed and plumbed your house are secondary (or incidental) to the actual economic outcome. To put that another way; you could remove all human labor inputs from your home and the product remains the same (in terms of value). But if robots and AI built your house, it would probably be cheaper, as human labor accounts for 30% to 50% of the final cost of construction. The Four Food Groups of Essential Demand So far, I have identified four types of essential demand. They are presence, provenance, liability, and affinity. Essential Demand Type 1—Presence This is where you are paying for a human to physically do a thing. Think: massage therapy, trip sitters, strippers, musicians, and performing arts. You might not care about the specific name of the service provider, and they are interchangeable (under many circumstances) but at the same time, your demand is that you will pay for a human to do a thing. This is either because machines cannot or you are willing to pay a premium for the pleasure of a human. The cute barista at your favorite coffee shop is an example where you’re probably willing to pay an extra 50 cents for the experience of seeing a cute girl behind the bar. There are massage robots out there, but most people might prefer human massage, assuming they can afford it. Essential Demand Type 2—Provenance Sometimes we value something expressly because a human made it. I am writing this blog by hand, therefore it likely has higher value than one that was AI generated. To be transparent: the attached whitepaper was heavily assisted with AI, even though I directed the research and used my noodle to make sense of everything. In the online and artistic space, many people have expressed an intense preference for human-made stuff. That is because we are biologically wired to appreciate real human experience and production more than automated production. Human stories and effort will always be more valuable to us. Luxury, handmade goods, as well as artisanal crafts, will likely always command some premium. Essential Demand Type 3—Liability This class exists because you want to be able to fire or jail someone. Think POTUS and SCOTUS and mayors and governors. Even if they use AI extensively to discharge their duties, you want a human on the hook for those decisions. That might also apply to CEOs, lawyers, judges, and doctors. This is what I used to call the “statutory economy”—clusters of jobs that exist for legal and social reasons i.e. we express a preference as a society that “we want a human doing that job so that we have a throat to choke if something goes wrong.” You can impeach and remove a president. You might not be able to fire Skynet. Essential Demand Type 4—Affinity This is what I originally called the “nominal economy”—where value is attached to a specific name. If you read my Substack and watch my YouTube, it is likely because you specifically want to know what David Shapiro is thinking and saying. You might listen to or read other AI and social commentators, but you value my input specifically. I have also called this the Taylor Swift Effect. There is only one Taylor Swift and she, like RDJ, is nonfungible. I have no idea why Taylor is so popular. All her music sounds the same to me. She is a good human, and rather attractive, and extremely hard working, though. The bottom line is that essential demand is a relatively narrow slice of the economy, and always has been. Even when Derived Demand was articulated by Alfred Marshall way back in 1890 (yes, over 130 years ago), he observed that most labor was already derived—meaning that people were rarely paying for the privilege of human presence, provenance, liability, or affinity. Even worse, while essential demand is likely somewhat elastic, it is not nearly as elastic as the entirety of discretionary spending category. For instance, if you are a billionaire, you do not consume 10,000x as many massages as a millionaire. You might buy a bigger house and a bigger yacht, which does not automatically entail more human labor input. Link to full article and free white paper below.

Yes, Rob, But that's an irrational position to take. The Doomers have: 1) a poor track record of positive predictions (things they said would happen, didn't) 2) a poor track record of missed predictions (things that happened, which they had no prescience about) What you're reacting to is not in the real world. What you're reacting to is a primate ability to imagine and worry about the future. Humans can *always* imagine worst case scenarios. But given how egregiously wrong the safetyists have been, it's actually negative EV to listen to them, because they distract from the real ontologies... You know... The real world Instead of shadow boxing with your anxiety, maybe it's time to engage with reality.

If you want to understand why I stepped back from AI discourse, the Dwarkesh virality is archetypal of everything wrong with it. Actual cyber security experts have classified the OpenAI and Hugging Face incident as an epic security facepalm. These morons literally just let it keep going. They didn't consult proper experts. It was an idiotic environment run by idiots. There was no civilization. There were no zero day exploits. I mean, not other than the zero day of ML researcher hubris. But people don't really care about reality. You people just want hyperbole and fantasy. You all should get the heartburn and anxiety you deserve for being so gullible.

"We don't want to lose our lead, so please help us kneecap everyone else" Come on guys. You can't sign the open weight pledge and then drop this stupidity 24 hours later. Everyone needs to read up on Red Queen Theory. But furthermore, they need to read about offensive realism to understand the geostrategic reality that ain't no way China is gonna slow down. And neither are way.

When the signs all say SOLD OUT there is no bubble. Sorry. We are dramatically, sorely, epochally underbuilt. The correct amount of compute for humanity is probably at least one trillion times what we have today, and that's just entry level for the next phase of civilization.