Highlights
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2024-12-04 00:10 And when it happens, the argument goes that that will increase productivity, raise wages, improve health, expand opportunities, quite likely, and everyone will benefit eventually. This word eventually is really very important because does eventually mean six months from now, two years from now, or 20 years or 100 years from now? That you think about these things very differently depending on that sort of timeframe. But that is the core idea. And the bandwagon is the idea that this will pull everyone along. Everyone will get pulled up. Okay, so Mark Zuckerberg may get rich before you do, but we’re all going to be. Our lives are all going to be improved by what? By the advent of social media, for example. And yes, we are in the business of questioning that premise.
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2024-12-04 00:10 So you had big business that grew up, but you also had trade unions that were able to push for the wages to get higher. You had regulation, for example, on railways, antitrust regulation, the, the beginning of that and very importantly, and it’s a great question, how much was policy and how much was environment, how much was luck when we had a lot of automation in this phase, when electricity spread through factories. So Henry Ford, for example, had a invented the assembly line and then made it even better with electricity. That automation was accompanied by the creation of a lot of new tasks, some of them created by Ford, some of them created by his supplier, some of them created by his customers or people who used automobiles. And that drove the demand for labor in a way, way that pushed up real wages in the early 20th century and then even more after World War II.
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2024-12-04 00:10 So the 50s, 60s and 70s are decades in which new task creation was so strong that we could have plenty of automation in industrial countries and still have real wage growth. Unfortunately, after 1980, we’ve had a return, let’s say, to some more historical phenomenon. And while we’ve continued to innovate, we continue to have new technology. The rising wage inequality, particularly between people with a lot of education and people with very little education, that reflects the fact that the productivity bandwagon has once again broken down. So this breakdown is.
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2024-12-02 17:56 So when the lord, who could be a feudal lord or could be the abbot of the local monastery, when they put in place a new water mill, for example, they could require you to bring your grain to be milled at that water mill, and that would be an important moment of taxation from which you could not escape.
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2024-12-04 00:09 I call it property rights, because a lot of these large language models are being trained on data that’s being stolen. And you’ll like this point, Javier, if you think about every major technological transformation, they’ve always included some element of converting what was previously common property to private property and then monetizing it and then consolidating it and then turning into new power. So water was free because water becomes water power, water mills. That becomes the basis of the medieval societies we talked about. That actually becomes, of course, the first power source of the industrial revolution.
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2024-12-04 00:09 Railways were made possible by effectively seizing, with compensation, but limited compensation, seizing private land and building these networks. Right. Telecommunications is taking the airway, airwaves, the spectrum, which is absolutely free. Before you invent radio and saying, you know what, we’re going to divide it up. The government’s going to decide who gets what we auctioned off.
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2024-12-04 00:09 It becomes monetized. So large language models are taking data that we all put out there for free, including things I’ve written and you’ve probably written, and, I don’t know, maybe they get access to your podcast, too, and using that to train the models, well, that’s theft, or something akin to theft, propertization, whatever you want to call it, that should be controlled, that should be monetized. We should organize ourselves as consumers. I don’t think we’ll get rich from it, but I think it gives us bargaining power and leverage relative to the big models and the big companies and what we want them to invent. That’s number one.
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2024-12-04 00:08 But then something happens. My friend and sadly missed former colleague, Michael Musset. I used to say that research papers don’t change the world, but research papers and books do create the ideas that then interact with an event, something you see. It could be a scandal, it could be a shock, it could be Covid, all of these things. It could be a financial crisis.
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2024-12-04 00:08 All of these things interact with ideas. And my other very good long term friend, Fred Bergson, who founded and created and ran The Peterson Institute for International Economics for a long time always said to us, when you come into office, it is too late to have new ideas. If you don’t know what you’re doing before you’re elected or appointed, you can’t figure it out. You’re too busy. There’s too many distractions.