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Causing media. Hello one, welcome to Better off line on your host. They cron.
Not really gonna do go too much on the intro today. I'm too excited that about the interview you're about to hear today's guess is a globally known economist, the author of one nations fall empowering progress MIT the rone a semco. okay. So a term that you've popularised, not necessarily invented this creative destruction. Do you might explaining IT for listeners?
Oh yeah. I and I definitely did not invented. And I think many other people deserve much more credit for inventing IT and making IT work.
It's this idea that goes back to joa hmi ter, famous Austin economist who spent most of his career, or the most important part of his career, harvard, who emphasized that in capitalist growth, you will have new firms taking market away and destroying old firms. And as a query of that, new technologies taking market share away and driving out old technologies. And he understood this was a difficult and to mutual process, but also believe that that was the essence of sort of capitalist growth. So it's one of these things that is a fact of life in a market process, but different types of social, economic and political reactions to IT are natural. And how you react to IT is going to have various of on growth, what type of growth and its distribution effects.
right? So something i've written about and spoken about a lot, as always, like the idea of the raw economy, which is the kind of growth is overtaken most of the modern markets, and I argue, least in the creative destruction field, take us stopped really innovative. IT doesn't feel like they're creating things to create new jobs, to create new markets. I'm wondering how you feel about looking at the general tech industry.
I am a critic of the tech industry, and I have become so over the last decade or so. And my problem with the tech industry is not its dynamism. I applaud that.
It's not its risk taking. I applause that. And it's not the drive towards economic growth, which I think is also generally desirable. But IT is the direction of research and technologies that the tech industry has focused on, both because of ideological reasons and because of a particular business model that they developed.
And I think both of those have push us towards technologies that I see as socially less desirable, in some cases, actually undesirable. And as a result, we're actually getting growth without as much social benefits. And let me try to just make one very simple point, which everybody knows when you say that, but is still is important to put in the conversation.
Economic output, as measured by statistical agencies such as gross domestic product, does not have any welfare element in IT, right? So if I find a way of hacking into your computer spending a thousand dollars, and you find a way of defending against me spending two thousand dollars, that will increase G, D. P. By three thousand dollars. And I think even the most demanded person wouldn't say that that's a social .
improvement yeah, think you made a point like this, the golbin sex. But it's about like you could make a trillion dollars if you did deep fakes in a certain manner.
exactly. So therefore, new products that increase GDP may have socially undesirable consequences. That wasn't part of the original symmetry point, and it's not something that I would worry about when i'm talking two people in mexico who are trying to get the economy going. But IT is a very important concern when IT comes to new tech.
When you think this shift happened, you said last decade, what was that the kind of changed for you?
Well, I think IT was probably a gradual process, but the tech sector initially was very heavy on hardware with some software elements. And when that started changing and the entire field became software, I think the possibilities for different types of technologies to go in very different social directions also multiply. So money today in video, being an exception, is not made by hardware. And even in NVIDIA, I think a lot of the innovation is with software.
particularly with kua being able to do stuff. Gp s.
But when you are also doing software, you have ways in which that software becomes an information control tool and monitoring tool or surveilLance tool. IT becomes a way of automating work in various different ways that can be a manipulative tool. And IT can also create lots of new products, some of them very beneficial, but some of them very addictive and conducive to mental health problem. So I think software sort of expand the capabilities, but together with the capabilities, you also have expanded set of distortionary or multiple later things that you can do.
right? You mention the kind of dynamism element of how tech is working in the growth. And if I agree that take is in a dynamic CS day IT almost feels like it's been spinning its wheels for the last few years crip toe metal, us, all of this stuff IT doesn't feel like new .
things are happening. Well, they are new things is just that. I think you are what I just said in a different way, and I might be that your way is Better.
They're not super social value, but they are new products. So you would say that metaverse or virtual world are a new product by any categories is not just not something that's going to make humanity Better. If I IT might make humanity worse by alienating them more or isolating them more from their social million, you know.
And there is another element of what's going on here which are comment on. But again, IT doesn't contradict that. They are generating new products, a lot of new technologies and new ideas that are being invented in tech are not being implemented.
And part of the reason for that is the competitive environment. Google, facebook, microsoft, amazon are all buying up on facebook are all buying up a lot of competitors and not even sometimes using their technology. So that's the consolidated structure.
So the invention is there, but the invention is not translating into implementation. Now don't get me wrong, some of that invention may also go in the wrong way. So a Better version of you know, tiktok may not be a great thing either, but there is that consolidated concentrate market structure that is also changing what gets .
implemented. We are making new things, but IT feels like the ones I mention, crypto meta and now generate A I. They're not producing actual products at the end. It's not so much that we couldn't live in a virtual world or that digital money will will be useful, but it's more that the actual output from the companies is not translate into meaningful products.
Well, again, this is a question of what we are measured and whether what we're measured is the right thing and whether it's really welfare relevant. But if I create a metaverse and you're willing to pay a million dollars for IT, that will increase GDP by a million dollars. So that's a new service.
A lot of things we consume today, our services, it's not something produced like A T shirt or a car. They are based on digital services. Now of course, to produce those legal services, we are actually using real resources such as energy.
But what I actually buy from you may be or what you buy from you, maybe just a digital service. Now some digital services are extremely useful, and some of them are useless. Some of them may be bad for you.
right? I think my point is more they are not making particularly useful selves. They're doing well, monetizing the things they've had for years.
But IT kind of reminds me of something eo two thousand and where you were talking about automation effect on growth. But also we may have run out of ideas for generating new high productivity, labor intensive tasks. Do you think we're approaching that point?
Thank you for raising bad. So I think that is a very, very important part of my thinking. I would say that the tech sector is not producing sufficient new tasks for workers to use their skills and to expand their capabilities.
And firms perhaps are not demanding and implementing enough of them. But IT is not according to me because we're running out of possibilities, is just that we haven't focused on those. And that's where the ideology reference earlier on that I made comes in. You know, I think the software industry would have done somewhat more productive things if I did not become too focused on replacing humans, having machines as humans overlords, which today has, of course, reached its apex with the craze on agi.
This is an a tiny section with you hear, because of our job, we need to be connected, tony, over connects by more than us. But it's important like connection with your friends, your family every enriches your life and that gives you something that provides. And high speed internet, just in the context of this show, is so important, we will be talking about something here.
And it's easy to forget when you have IT. You know, big parts of the country .
still don't have high speed internet. So A T N T knows this. They're aware of IT at A T T, and they're making a huge effort to change that.
What they're doing is on trying to cover thirty million plus locations currently who don't have IT to get IT with fiber by the end of twenty twenty five. Millions of people obviously will benefit families, businesses, schools, hospitals. There is a place called old and county in kentucky, where they're now providing high speed internet to more than twenty thousand customers. A T N T join a lot of great things.
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But he's the .
thing I get that that might be what they're pushed in toward. But generate a AI isn't even automation at this part. A lot of what you've written about A I is correctly like the effects of if we ought make this tasks IT feels like they aren't even successful automating anything.
Absolutely one hundred percent. Thank you for saying that. My take is that generate vi is actually an informational tool, right? So you should use, generate A I is a way of generating, filtering, summarizing, finding, checking information.
That's actually what is good at. If you try to use IT for other purposes, sometimes you can get away with IT, but IT won't be very good at that. So you can try to automate a lot of warehouse tasks today by using the current crop of robots.
People don't do that because they're not good at IT. If you did IT, costs would go up, people would lose their jobs, delays with pilot, but you can do IT. It's the same thing, would generate A I even though it's not an automation tool, automation wouldn't be its best uses, especially given the current and reliability.
Even though there is something else that we could do Better with IT. I think many people are onna use IT for automation because that's the wife. That's what companies are being told.
You know, if you talk to business leaders today, everybody he's asking them, financial journalists, their shareholders and their friends, where are you with the A I investment? But that's the hype. And then people are onna rush into use A I to implement A I even when they don't know what to do with IT.
And automation will often appeal to them because it's like the easiest thing to do with the thing that they may have experience from other technologies and is the thing that some people are telling them that that's what they should do. There are companies, integrators, websites devoted to automation. A I even even though I wouldn't be very good at IT. I mean, again, you could automate some tasks. You could have more of your customer service done without people.
right? Even then, that feels like a stretch of what automation means because sure, the customer service example, and I think you may have raised this point as well, how does IT get Better? How do you measure Better in the case of customer service? But even then, it's automation only in so much as you can trust him. And he feels like these core issues of hlubi ation almost kill the concept of automation with generate .
A I one hundred percent. So here is a good use case for automation of customer service, which is you call your bank and you enter some password and they tell you your baLance. That's perfect. You don't need a person there to tell you the battles, right? Because the current technologies can faithfully take those numbers and communicate them to you after the right security steps.
Yeah, it's not a generative answer because it's a number in a day is not .
a generative answer. So now put generate a eye there, you're probably going to a get lots of incorrect, yes, but some companies might still do IT.
which is IT just feels like a crazy time that you have companies shoving this through almost like the very much like a post jack welch situation where .
yeah the exactly the jack well mindset.
Do you think apart, the problem is that the people running these companies aren't really technologists.
I don't know. Look, I think this is another branch of my work. But U. S.
Businesses are often LED by people who have been trained into thinking that there only priority should be increasing short term shareholder value, right? And a very effective way of doing that is cut labor of costs, but a that's not the right social objective. Even maximizing long term shredder value is not the right objective.
But even more fundamentally, cutting short run labor costs may be an illusion and be associated with longer term problems. So if you have a company where your workers are skilled, talented, they're very useful for leasing with customers, creating new services, products, innovation. You can, in the short time, cut your labor costs, but I would destroy you in the long run. I think many more companies are in this bucket than american business needs realized.
And its funny invention that i've heard a lot from google people in particular. I get email from google people all the time about a particular guy, and it's funny. They all talk about the kind of brain drain of layoffs.
You don't realize it's not just the output you're losing. It's the person who knew how the stuff worked and where the stuff was and who built the stuff and why the stuff is good or bad. And IT almost feel feel like american capitalism is dramatically disconnected from labor in general.
Yeah solution. So look, I mean, I think there is a tremendous amount of tacit knowledge that workers have which often gets unrecognized and even bosses sometimes don't recognize that. So both french and british trade unions in the history experimented with these types of strikes where workers just follow the rule.
They do exactly what the rule book says, their responsibility, ie. S are. And IT turns out to be quite disastrous for the company because most of what actually workers do is much more adaptive than just following the rules.
right, like kind of outsourcing risk almost .
yeah it's just like, you know the rule book says, you know Operate the machinery but you know when to actually Operate the .
machinery not yeah Operate .
mine so that the kind of basic knowledge that people acquire via training by experienced by as their social network talking to friends. And if we don't value that, will lose that. And it's gonna very difficult to replace IT with what machines or information technologies do.
Do you think you're in a bubble right now? Define a bubble actually. Let me reframe the question. Do you think generate of AI is a trillion dollar industry? Do you actually think IT is the next .
typed of growth market? Let me answer that question slightly.
indirectly.
Sounds good. I believe that generate A I has the capacity to add a trillion dollar or more over time if we use IT correctly. Because as an information technology, IT has great capabilities. We live in an age in which useful information is scared. All sorts of chunk you don't want is on the internet.
But when you actually need to solve a problem, get Better at what you're doing, get more background information, those things are very difficult to find and generate A I could be a tool for providing that sort of information to all sorts of decision makers and workers, blue color workers, office workers and so on. But that's not the direction we're going, in which case, I don't think it's gna add trillions of dollars of true value. But that also doesn't mean that generational companies are gonna best because they're gonna be able to monodist this another way.
So if generate A, I enables you to take over the search market from google, that's a huge amount of money. IT may take over the search market from google without providing much Better service to consumers. But IT might still be high, hugely profitable if generate A I companies convinced businesses to invest in, generate A I that's going very profitable for them, but not so good for the businesses .
that be implemented, right? So the thing is, and I understand what you're making these assumptions, but what if IT doesn't get cheaper? Because right now, the thing i've been on about generate the eyes on top of not being super useful, it's so unprofitable and every report seems to be suggesting isn't making people money.
Yeah, what if IT .
stays where IT is? Because in the last eighteen months, GPT four, I was not significantly different. What if theyve stalled? What if this is all we've gone?
Yeah, I my guess is that you will get somewhat cheaper because right now, it's very costly to even answer queries. And with more G, P, U, capacity, IT will get somewhat cheaper. With Better designs, IT will get somewhat cheaper. But I do not believe that there is a scaling low in there. So many people in the industry believe in this mysterious scaling law, which is that you double the GPU capacity or compute capacity, you double the data and you get twice the performance .
and a of lot of by people who don't necessarily understand IT.
But first of all, what does that mean to say double the data, we're gona throw more edicated. So even if there was such a scaling low, you would require high quality data which were not producing run out, would not paying for IT. yeah.
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There's something just very realistic about the whole thing. As IT stands, there's not really much of a social output. It's helping automate away jobs promptly held by contractors, which is already a problem on to itself.
But also IT doesn't seem to be making the money. I don't think i've ever seen anything like this in tech. And I just wondering indeed, maybe this the question, what happens if this is not IT, but also tag doesn't have an next step? Do you think one of these big companies could die? Do you think there is actually an existent al risk if generate V I and all this falls? bum?
No, I don't think so. I think a none of these companies you know are just committed to generate A I. They have other businesses that are making money and even in video can make still a lot of money with the GPU.
Let me refer to them. So right now, all of these tech anties, they do very well their multiples in the markets because they have a relatively low cost of goods like their actual cost of pretty great. But they predicated on this ongoing growth, they must always grow. But what happens if they don't have a new growth thing because they haven't for a while? And what if they turn on, generate A, I like this feels like this could be an economic panic on to itself.
yeah. IT could be there could be some drops evaluation. The general pattern we have seen with many other products and technologies is that IT looks a little bit .
like an esco de, right?
You're an acceleration and then you play to and that's when new products are invented, new investors move on to other things. And that hasn't happened with tech. You know microsoft is living its force life or whatever since M.
S. Dos, partly because they have acquired new businesses, some competitors, some competing technologies, and sometimes some tech companies have invest in the wrong things. I mean, clipt currency was more crazy yeah than A I I that I really didn't see the youth case.
The question I keep on of asked a lot of people, this is just what happens if there's nothing because growth is slowing. There is a there is a pattern of of slowing growth within these companies, and there isn't a new thing that they can pick up and acquire. I don't know whether takers ever had this happen. Is the problem?
Yeah, it's a good point, but it's even deeper than that. Growth has slowed in the industrial ized world and is not a new phenomenon. One of these paradoxes, which needs to be repeated more and more the tech age, has also coincided with a slowdown of aggregate growth and every indicator of a good growth.
So we are growing much less today than we did in the seventies or sixties. Productivity is growing less. And I think this is also related to the fact that we're not getting enough out of the new technologies and the new ideas and the new scientific discoveries that we are making. And part of the reason why there is so much hunger for A A I hype is that many people, including policymakers, by the way, are wishfully thinking, oh, well, this could be a solution to our productivity slowdown. So perhaps in the next decade, we can have a much faster protectively growth, thanks to .
generate A I or thanks to A I.
New jobs, yeah new jobs, sudden discoveries.
So almost history's kind of slowing down. I've not really heard anyone really discussed IT in these terms, but it's interesting. So you've seen that this is the growth at all. Cost is everywhere and growth is slowing. But IT sounds like growth isn't just about a money thing, though.
No, no. Growth is not just about money thing. And I think if you do look at other indicators, we're doing worse. One of the regularities of the twenties th century across the world is that health and life expectancy have improved every today.
People in sub saharan africa have twice the life expectancy at birth as people who lived in london or manchester in the eighteen hundred. And americans have had tremendous improvements in life expectancy and health until the last decade when it's slow and I started getting reversed. So on, many indicators were actually doing even worse than gdpr suggest.
So what's contributing to is that a welfare issue is a societal one. Is that well.
I I don't think there is a clear answers. Some people think it's because of you know that life expectancy part is because of early deaths due to alcoholism, oios and drugs. But there is a more general deterioration, mental health, there's a mental health crisis. So if you look at health of surviving people, it's much worse if you're factory that mouthful of healthy issue.
Wonder if it's also we're take falls into this as well the exposure to social media. I read this overall, which is one of my film msy a theories, the I don't think people should be thinking about politics as much as they do. Not saying people shouldn't political, but just the immediately y of political discussion has been to people's mental health.
Well, I give you two fact toys that might perhaps support your ideal, but i'm not sure whether I completely reverted. But one is that if you look at when the mental health crisis seems to start IT coincides with smart phones. So people accessing social media and other things on their smash forms twenty four hours a day might have something to do with IT.
Another one is due to economists hunt output. And Matthew against cow, they did this experiment where they incentivize facebook users to stop using the platform. So when people stop using the platform, they are mental health improve, but they can answer questions about what's going on in current politics much as well. So there at least immediate superficial knowledge of what's going on in politics also declines.
interesting. Yeah does feel like there is a wider discussion, discussion perhaps the long ward within the tech industry, there is almost no consideration of the social aspects of the welfare aspects of any technology being built. The matter of us, for example, as ridiculous as that was, I can understand an executive being like, yeah, we use the internet now. What if we use more internet, but just no consideration of the whether people wanted to feels like there's just a disconnection between capitalism and people.
I mean, I think tech is much more complicated. Often times, it's multi use for something that may appear to have good users, also has bad user me. But I do think that tech workers also need to own up to greater social responsibility. So if you are a physicist, nuclear physicist today, it's unthinkable that you do not have some social responsibility related knowledge as well as training about, you know, nuclear weapons.
My best mate is a nuclear health and safety person, so I feel would appreciate.
But the same degree of thinking about ethical implications, social implications, what happens if I unleashed this on humanity, doesn't quite exist to the same extent in the tech industry. And I think it's going to develop. There are many people who are very socially minded in the tech sector, but I think we may need something more systemic.
And what would regulation look like on a Better? Now I suppose what can we do to kind of reverse this disconnected trend? Is IT regulation? Is IT Better safety culture.
all of the above. But here is a problem I have with both regulation and the discussion that we have about regulation. IT is very reactive, right? Something happens, and we react to IT by thinking of how can we regulate so that we reduce the harms.
But the problem, as I try to articulate, including in the earlier parts of this conversation, is about what types of technologies we are developing, where we are putting our efforts exposed. Regulation that reactive is not gonna hieu that. So I think we need a new tech culture and as well as societal norms and priorities that says there is an alternative that is technically feasible and socially desirable for technology, especially for ai.
Articulate what this is. Let's have a conversation about how we can get there, what we can do to encourage researchers, what we can do to encourage engineers, what we can do to encourage businesses to actually go in that direction. What does the government need to do? What does civil society need to do? What does the media? By the way, I think media is a big part of the problem.
Media often sort of increases the appeal of the tech industry. IT sort of paints a picture of tech leaders as these genius were revolutionising things and IT personalizes that put their power and IT makes IT harder for the public ran to keep the tech sector accountable. Also, on the A I field, I think the media is part of the reason why there is so much hype. Many of the leading publications, such as the economist or the york times, every week print something about A, I will solve this problem or that problem. A I is gonna revolution.
It's always well, yeah and that I mean, part the reason show exists and I think IT comes down to I do blame a lot of this on the growth at all cost economy, but it's also it's almost like there is no long term as m anymore in a lot of the tech economy or this will happen. Just trust us and give us as much time and money as possible. But we're not going to invest in our N D. Is just a bizarre well.
look, let's also think about the world at large. There are six billion people who live outside of europe, U. S, canada, in china.
That includes the weakest, the poorest people in the world. How can we improve their lives? Nothing we're talking about A I here is gonna do that.
And that's actually the thing is connecting back to what you are saying earlier. The problems being solved don't feel like there's solving for everyone. It's solving what's very much in front of us. The latest die phone, latest computer um what problems can that solve and thus generate A A I kind of make sense because it's like, oh, more computer, but more computer isn't fixing .
anything metaverse as a solution to, you know, people who are starving .
that actually this leads me to a question, what did you think of cyp to currency? I wish I would have had this .
pok guster about at the time. Well said that I see the positive for general A I I think it's actually a promising technology. I do not see any positive for currency.
I never did what I read the manifesto to first about. The IT was interesting, IT was told provoking. But two days later I was inoculated against IT. Yeah.
you kind of remember, real money exists in that point. We cannot .
trust the government, yes. We cannot trust politicians, yes. But as long as we keep politicians and the government under some sort of check with through democratic means, you know the money is not the most important problem. So that's not the biggest issue that we have to worry about.
So a rap up question and really appreciate your time. Of course, are you optimistic about the future for the tech industry?
No, I am not a techno optimist and i'm not a market. Meaning that if I define optimism as things are gona work out, there is an art of progress. I am not an optimist. I think we have serious problems with the tech industry. We have serious problems with the market process in the united states right now with social processes, but I am hopeful.
I believe that there is a direction in which we could use technology that would make things Better, and there is a way in which we can introduce Better regulation, Better worker organizations, Better training that would make the market system work Better. But as the hope that we could achieve that if we did the right things. But I don't think that we are heading there, left to our own device.
So where does IT head if we're head .
in that direction? Oh, I prefer not to answer that question.
That's a perfectly fine way to end IT the one. Thank you so much for joining me today.
Thank you. This was really excEllent conversation. I really enjoyed IT, and I started that. My voice was a bit of a downer.
I don't worry, the listeners have just be glad to have someone else of the meat talking. You've been listening to Better off line.
Thank you for listening, everyone.
Thank you for listening to Better or offline the editorial um composer of the battle offline theme song is matter so sky you can check out more of his music and audio projects a meta sali dotcom M A T T O S O W S K I dot com.
You can email a easy at beta off line dot com or visit Better off line 点 com to find more podcast links and of course my newsletter, I also really recommend you go to chat that was your ed or at to visit discord and go to ask lash Better roof line to check out or read IT. Thank you so much for listening. Better off line is a production of cool zone media. For more from cool zone media, this is our website calls on, we get a dot com or check us out on the I had radio APP apple podcast forever. You get your podcast.
Welcome to decisions, decisions, the podcast where boundaries are push and conversations get handed. Join your favorite host, me v WTF and me mad b as we dive deep into the world of non traditional relationships and exploit the autou topics surrounding dating sex.
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your bad cast.
looking for the perfect Christmas playlist will check out ninety three point nine light FM chicago Christmas music station playing your favorite ite holiday artists, including bin crosbie, morici, Frank sinatra, michabo bay and Moore. Turn on the holiday light to get in a festive mood, whether at work, in traffic or at home putting up the decorations. We can't wait to celebrate the season with you. Listen to ninety three point nine light F M in chicago or anywhere in the world on the eye art radio APP.