Dwarkesh Patel: belief

Transcript context

…Absolutely. That’s kind of Phil’s point. You could have an increase in variety in capital where you don’t get the satiation. You’re increasing variety, so you’re not hitting that diminishing marginal utility point where most of your income is going to the human sector. If that increasing variety is fast enough, and there is no such increasing variety in the human sector, then you can get all of the relational goods you want, but it doesn’t matter for labor share. It goes to zero. Phil, I liked your analogy to some Mongolian economist sitting around in 1400 thinking about what will be scarce and the limits of that kind of analysis. I think you should talk about that. Just look at the goods available to a Mongolian of the distant past. I’m no expert on this society, but I know that they didn’t have nearly the variety that we have now. Look at the jobs that were intrinsically human, like being a singer. And then you look at the things that were not intrinsically human, like the transportation services provided by their horses or the different kinds of food they had. If they just held the varieties fixed in both categories and asked, “What will happen once we have a lot more automation?”, they might have said, “We’ll just satiate in horse-like transportation and in yogurt and in yurts. Those shares will all go to zero, and we’ll be left spending all of our money on singers.” But of course, that’s not what happened. As we’ve accumulated more wealth and more advanced machines, we’ve expanded the range of things other than singers to spend our money on, and the share spent on singers has stayed negligible. Likewise, that’s my central prediction about how the future unfolds, though it could go either way.…

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