The future collapse….?

[Jo Zebedee]

Does South Africa, or any nation with mass unemployment, have a tax base in a large enough domestic product to pay people and not have rocketing inflation?

I think we like to believe that we can just keep changing over economies from one type of production base to another, but there comes a point when you truly run out of things that have global market value. Several hundred years ago, Spain collapsed its economy by importing too much gold from the Americas - it had no real value when it wasn't the product of Spanish labor.


It is possible to have a post scarcity society where people do things other than work. But we haven't come even close to replacing scarcity.

At the moment, our current economies have no answer to the divide between rich and poor that AI is likely to produce - and a lot of economists believe (and the creator of AI, recently) one is a universal basic income. SA has been playing around the edges of it since Covid - they didn't pause Covid payments the way most countries did.

If not UBI, then some kind of basis that puts money into the hands of those poorer rather than richer might aid communities - there are studies that show that money at the lower economic edges tends to have more impact on community growth and sustainability than in the hands of the rich (who use it to get richer, as opposed to buying things that we might produce)

It's all subject to a lot of arguments at the moment, which my tiny brain doesn't fully follow, but it is one of the possible models to meet the changes that are coming down the track at us.

On the other hand, to put the cat amongst the pigeons, I wonder if AI is actually the threat it's said to be - resource requirements alone could limit the tech's application? But no one else seems to think that's true, so maybe I'm just an eejit....

 

[Swank]

At the moment, our current economies have no answer to the divide between rich and poor that AI is likely to produce - and a lot of economists believe (and the creator of AI, recently) one is a universal basic income. SA has been playing around the edges of it since Covid - they didn't pause Covid payments the way most countries did.

If not UBI, then some kind of basis that puts money into the hands of those poorer rather than richer might aid communities - there are studies that show that money at the lower economic edges tends to have more impact on community growth and sustainability than in the hands of the rich (who use it to get richer, as opposed to buying things that we might produce)

It's all subject to a lot of arguments at the moment, which my tiny brain doesn't fully follow, but it is one of the possible models to meet the changes that are coming down the track at us.

On the other hand, to put the cat amongst the pigeons, I wonder if AI is actually the threat it's said to be - resource requirements alone could limit the tech's application? But no one else seems to think that's true, so maybe I'm just an eejit....

I'm just pointing out that there aren't going to be many rich people either on this trajectory.

 

[paranoid marvin]

I'm just pointing out that there aren't going to be many rich people either on this trajectory.

Thecproblem is that it is the rich and powerful people who make yhese kind of decisions. Will they be willing to narrow the gap between rich and poor?

Of course, they are probably the same kind of choices that rich French aristocrats were making prior to the French Revolution. They chose poorly.

 

[Christine Wheelwright]

Does South Africa, or any nation with mass unemployment, have a tax base in a large enough domestic product to pay people and not have rocketing inflation?

I think we like to believe that we can just keep changing over economies from one type of production base to another, but there comes a point when you truly run out of things that have global market value. Several hundred years ago, Spain collapsed its economy by importing too much gold from the Americas - it had no real value when it wasn't the product of Spanish labor.


It is possible to have a post scarcity society where people do things other than work. But we haven't come even close to replacing scarcity.

Interesting. I've often wondered about the roles played by essential vs luxury goods in our economy. That, and the rules of supply and demand. It seems to me that whenever people in general are doing well, their pockets are fair game for the suppliers of the essentials. I think we see that right now in the soaring cost of accommodation (whether renting or owning). I sometimes think we may never reach a point where the masses can easily afford the essentials (say health, food, accommodation) and still have plenty left over for luxuries. The cost of the essentials will surely rise to take up any slack. Governments trying to help with affordability (eg eliminating tax on mortgages, or by any other means) are doomed to failure as market forces ensure that the average house is affordable by the average person. Any attempt to help financially is inevitably inflationary. Low interest rates are inflationary when it comes to house prices. Its possible that some regulation could help (like banning ownership of second homes, or taxes on empty homes, or somehow delegitimizing excessive profiteering) but these are generally considered government overreach. If anything, we are heading in the opposite direction.

 

[Swank]

Interesting. I've often wondered about the roles played by essential vs luxury goods in our economy. That, and the rules of supply and demand. It seems to me that whenever people in general are doing well, their pockets are fair game for the suppliers of the essentials. I think we see that right now in the soaring cost of accommodation (whether renting or owning). I sometimes think we may never reach a point where the masses can easily afford the essentials (say health, food, accommodation) and still have plenty left over for luxuries. The cost of the essentials will surely rise to take up any slack. Governments trying to help with affordability (eg eliminating tax on mortgages, or by any other means) are doomed to failure as market forces ensure that the average house is affordable by the average person. Any attempt to help financially is inevitably inflationary. Low interest rates are inflationary when it comes to house prices. Its possible that some regulation could help (like banning ownership of second homes, or taxes on empty homes, or somehow delegitimizing excessive profiteering) but these are generally considered government overreach. If anything, we are heading in the opposite direction.

Nature abhors a vacuum, and prices will rise to meet demand.

Thecproblem is that it is the rich and powerful people who make yhese kind of decisions. Will they be willing to narrow the gap between rich and poor?

Of course, they are probably the same kind of choices that rich French aristocrats were making prior to the French Revolution. They chose poorly.

It really isn't a decision as much as technologists putting their inventions directly into the economy. I think we all believe there is a lot more planning and control than there really is.

 

[Montero]

Thecproblem is that it is the rich and powerful people who make yhese kind of decisions. Will they be willing to narrow the gap between rich and poor?

Some. See the organisation Patriotic Billionaires for example who are arguing people like them should be taxed more. They are saying that it is actually better to be taxed more, and those taxes spent on infrastructure and things like the NHS, because then they are doing business in an environment with better buildings, roads, healthier happier workforce etc.

 

[Robert Zwilling]

Business is ultimately based on math. Its a very distorted math that has an odd way of summing up values. If something doesn't fit the current philosophy it is not included in the equation.

Cost of obtaining raw materials, cost of processing the raw materials, cost of finishing the finished goods, are pretty much what gets used to determine what profit there is to take. That makes for big profits.

If you include the cost of making sure the land where the materials are obtained is restored to good condition, the cost of cleaning up the mess made by the processing, including making sure any health impacts on all the living are addressed immediately, cleaning up any negative impacts caused by the use of said products, and disposing of the product properly, well, there goes most of the profit out the window. Just enough is left for everyone involved, top to bottom, to make a comfortable living and that's it. No big profits if the process is done so that it doesn't "negatively" impact the world around it.

If you want a couple of extra million, write a book.

 

[paranoid marvin]

Business is ultimately based on math. Its a very distorted math that has an odd way of summing up values. If something doesn't fit the current philosophy it is not included in the equation.

Cost of obtaining raw materials, cost of processing the raw materials, cost of finishing the finished goods, are pretty much what gets used to determine what profit there is to take. That makes for big profits.

If you include the cost of making sure the land where the materials are obtained is restored to good condition, the cost of cleaning up the mess made by the processing, including making sure any health impacts on all the living are addressed immediately, cleaning up any negative impacts caused by the use of said products, and disposing of the product properly, well, there goes most of the profit out the window. Just enough is left for everyone involved, top to bottom, to make a comfortable living and that's it. No big profits if the process is done so that it doesn't "negatively" impact the world around it.

If you want a couple of extra million, write a book.

I think what really matters is thst people plan beyond their own lifetime. It's in 50-100 years tome, when all those who could still do something now don't will be long gone and those then livong will have to deal with ghe consequences of their actions.

What will people in 100 years time think of people in this generation who could have done something to fix things - but didn't?

 

[Montero]

I was once told that there is a Chinese proverb which goes
"What is the best time to plant a tree?"
"Ten years ago."
"When is the next best time to plant a tree?"
"Now."

 

[paeng]

I remember reading in the 1990s about the divide taking place in UN HDR reports, e.g., the thousand richest people in the world having more wealth than the bottom half of the world population, and how the wealth gap worldwide grew 200 times the past two centuries.

Also, if the three richest people in the world gave up a tenth of what they owned, then the amount might be enough to ensure basic literacy on earth for everyone. If it's the thousand or so richest, even world poverty might be averted.

The punchline:

For many of the richest worldwide, their wealth goes up by around 10 percent every two years or so, which means they can easily recover what they gave up, especially when the money is used to buy goods and services from businesses that they also own. They probably won't even miss it, too, as they probably only spend up to a hundredth of their total wealth for personal expenses each year.

The catches:

Much of that wealth actually consists of numbers in hard drives.

No amount of increased money can reverse physical limitations of the biosphere.

As for AI, one interesting catch about replacing workers with computers and robots is that computers and robots aren't consumers, and that the ones expected to buy goods and services produced by automation are the same workers.

Bonus:

I read somewhere that the cost of using AI is around ten times higher in terms of electricity use compared to a search engine query.

 

[psikeyhackr]

We need to address this pseudo-capitalism.

This is really funny. Ask ChatGPT the effects of making accounting mandatory in the schools and see what you get. Our economists are not intelligent enough to think of this.

===== ChatGPT =====

Mandatory accounting education in schools could have several far-reaching effects on the economy:

1. *Financial Literacy* : Improving financial literacy among students can lead to a more financially savvy population. Individuals would be better equipped to manage personal finances, make informed investment decisions, and avoid debt, leading to greater financial stability and economic well-being.

2. *Entrepreneurship* : With a solid foundation in accounting, more students might feel empowered to start their own businesses. Understanding financial statements, budgeting, and financial planning is crucial for entrepreneurs, potentially leading to an increase in successful startups and small businesses, which are vital for economic growth and job creation.

3. *Workforce Competence* : A workforce with basic accounting knowledge can enhance productivity and efficiency in various sectors. Employees who understand financial principles can contribute more effectively to their organizations, leading to better decision-making and resource management.

4. *Economic Stability* : Financially literate individuals are more likely to save and invest wisely, contributing to a more stable and resilient economy. This can reduce the incidence of financial crises caused by poor financial decisions on both a personal and corporate level.

5. *Consumer Behavior* : Educated consumers are likely to be more cautious with their spending and borrowing. This can lead to healthier credit markets and reduced levels of personal debt, positively impacting the overall economy.

6. *Reduced Financial Fraud* : With a better understanding of accounting principles, individuals and businesses are less likely to fall victim to financial scams and fraud. This can enhance trust in financial institutions and markets.

7. *Economic Equality* : Financial education can help bridge the gap between different socioeconomic groups by providing everyone with the tools needed to manage their finances effectively. This can lead to more equitable economic growth and opportunities.

8. *Government Revenue* : Better financial literacy can lead to more accurate tax filings and compliance, potentially increasing government revenue. Additionally, a population that understands public finance might support more efficient use of public resources.

9. *Long-Term Planning* : Individuals who understand accounting are more likely to engage in long-term financial planning, including retirement savings and investments. This can reduce the burden on social safety nets and contribute to a more sustainable economic future.

10. *Cultural Shift* : Over time, mandatory accounting education can lead to a cultural shift where financial literacy is valued and prioritized. This can have a positive ripple effect on various aspects of society, including health, education, and overall quality of life.

Overall, mandatory accounting education in schools has the potential to create a more financially literate and economically stable society, with benefits that extend to individuals, businesses, and the broader economy.

=====≠==≠===≠===≠======

This should have been done since the 1950s. That is when large organizations started programming computers to do accounting.

If you search Adam Smith's Wealth of Nations you can find that he used the word 'education' Eighty Times. He wrote "read, write and account" multiple times never "read, write and arithmetic."

 

[Robert Zwilling]

Reading and writing write their own instructions as you learn to use them, you can see where you are going and how to use them. Math is a very abstract subject for most people but understanding the basic issues of how it is used is absent from most courses. The digital age is built on math and without a clear understanding of how things add up, the user becomes something to be used.

Crypto and AI will probably end up using the same amount of power to operate. They also use a lot water as a coolant which is another drain on the system. Crypto has been forced to seek more of its power from green sources due to its being kicked off of national grids. AI still has an air of respectability, still using fossil fuel generated power, but recently people have started telling data centers to generate their own power. That isn't difficult, they just have to set up a big LPG tank and hook a bunch of gas powered generators together to get the power they need. The water is a separate issue. They might have to switch to air cooled set ups.

Efficiency is something that the digital/electronics industry is normally known for. But when it comes to AI and crypto, efficiency becomes a dead issue because the only way they work is by a massive duplication of efforts. Its curiously like the idea that you can make up for losses by increasing the volume, which never seems to work, the losses only get bigger. The software industry has become quite bloated compared to coding that was practiced 30 years ago. A lot of this is caused by people using parts of premade routines to accomplish a goal but because they have no real knowledge of how things work, they have to include a lot of built in features in the software solution that aren't required and aren't used.

Until raw computing becomes efficient, we will continue down the path of excessive unrequired power squandering for anything we do, which only yields diminishing returns. The size required to do the same process on an individual basis continues to get smaller and smaller but the power required to run the processes keeps increasing. The generation of excess wasted energy automatically limits the effectiveness of the process. Instead of modeling intelligence on brute force data manipulation, it might be better to model intelligence on how the mind physically handles the data it processes without overheating.

The solution being offered is for the individual/company to not own any of the equipment, rent all the computing power from the cloud, preferably only from "the best" company. The electronics industry offers a range of products that do more and cost less compared to previous models, but letting someone else do your electronics for you keeps getting more expensive every year. The solutions to the problems created by 8 billion people will be provided by everyone from all walks of life. If we limit admission by using an abstract standard such as wealth, we will severely limit the effectiveness of the solutions that will be used to handle the 8 billion consumer problem.

The same way the internet failed to live up to the promise of being the ultimate information and communication system for everyone's benefit, the cloud is a financial drain instead of a service that makes life easier. A free basic data service is needed because everyone needs those services but not everyone can afford even the most basic rates. The rental business model is putting a big drain on everything, which would be okay if that draining of resources were put back into the entire system to make it run better for everyone, but instead the energy is taken out of the system, automatically lowering the efficiency of the system down to a decreasing level of performance that can't support the real world in which it exists.