The current market is predicated on the assumption that labor is atomic and has little bargaining power (minus unions). While capital has huge bargaining power and can effectively put whatever price it wants on labor (in markets where labor is plentiful, which is most of them).
What happens to a company used to extracting surplus value from labor when the labor is provided by another company which is not only bigger but unlike traditional labor can withhold its labor indefinitely (because labor is now just another for of capital and capital doesn't need to eat)?
Anyone not using in house models is signing up to find out.
The tech overlords don't even want to spend a minuscule percentage of the federal budget helping starving people, even when it benefits the US. They are not going to give us a post-scarcity society.
The hell?
If artificial doctors are cents on hour then you can see how that changes our behaviors and level of life.
But on the other hand from the other direction there is a wage decrease incoming from increased competition at the same time. What happens if these two forces clash? Will cheap labour allow us to buy anything for pennies or will it just make us unable to make a single penny?
In my view the labour will fundamentally shift with great pain and personal tragedies to the areas that are not replaceable by AI (because no one wants to watch robots play chess). Such as sports, entertainment and showmanship. Handcrafted goods. Arts. Attention based economy. Self advertisement. Digital prostitution in a very broad sense.
However before it gets there it will be a great deal of strife and turmoil that could plunge the world into dark ages for a while at least. It is unlikely for our somewhat politically rigid society to adapt without great deal of pain. Additionally I am not sure if hypothetical future attention based society could be a utopia. You could have to mount cameras in your house so other people see you at all times for amusement just to have any money at all. We will probably forever need to sell something to someone and I am unsettled by ideas what can we sell if we cannot sell our hard work.
Someone who sees the roads ahead should now make preparations at government level for this shock but it will come too fast and with people at the steering wheel that don’t exactly care.
But we will have to (painfully) shed our current hierarchies before that comes to pass.
Seriously? You really don’t see who wins from this and who doesn’t?
> If artificial doctors are cents on hour then you can see how that changes our behaviors and level of life.
Yes, hundreds of thousands lose jobs and a couple of neuro surgeons become multimillionaires.
Okay, I see from the rest of the comment that we understand each other where it goes.
Good luck with whatever you got going on.
The same way like Windows got entrenched everywhere even though linux desktop is pretty good even for non-tech savvy people and free.
Let's not get carried away.
Non-technical people are easier to please in this regard than moderate-technical people: a good browser and safe, gui "app store" are enough.
It's a distribution strategy. It costs something to serve the models - let's say $5/1M tokens.
If Qwen required $5 from anyone who was curious so you could even begin to test it out, a lot of people just wouldn't.
Now Qwen could offer a "free" tier, but it's infinitely cheaper to provide the weights and let people run it themselves including opening up the ability for anyone else on the planet to test it against other (open weight) models.
The costs to build the open weight models are sunk, but the costs to serve them, get them tested are not.
It's also precisely why the .NET SDK is free or the ESP32 SDK is free - they sell more Microsoft or ESP32 products.
They are a prestige propaganda tool on par with the space race. On top of that they insert a subtle pro-socialist bias in everything they touch.
Ask deepseek about the US economic system for a blatant example.
Now think what something as innocent seeming as the qwen retrieval models are doing in the background of every request.
This is an argument in the lane of "at least he built the Autobahn".
Speaking as a German.
Of course, why did no one think of that?
(American talking, who’s had multiple Canadian friends make this mind boggling overcorrection)
It's easy to forget because they actually built an incredibly vibrant capitalist economy.
Imagine if Musk was disappeared during the Biden presidency into a diversity camp and came out looking like Dr. Frank-N-Furter and instituted mandatory LGBT struggle sessions at twitter.
This is what they did to Jack Ma: https://www.forbes.com/sites/georgecalhoun/2021/06/24/what-r...
Menger used this insight to resolve the diamond-water paradox that had baffled Adam Smith (see marginalism). He also used it to refute the labor theory of value. Goods acquire their value, he showed, not because of the amount of labor used in producing them, but because of their ability to satisfy people’s wants. Indeed, Menger turned the labor theory of value on its head. If the value of goods is determined by the importance of the wants they satisfy, then the value of labor and other inputs of production (he called them “goods of a higher order”) derive from their ability to produce these goods. Mainstream economists still accept this theory, which they call the theory of “derived demand.”
Menger used his “subjective theory of value” to arrive at one of the most powerful insights in economics: both sides gain from exchange. People will exchange something they value less for something they value more. Because both trading partners do this, both gain. This insight led him to see that middlemen are highly productive: they facilitate transactions that benefit those they buy from and those they sell to. Without the middlemen, these transactions either would not have taken place or would have been more costly.
What happens when there is an oligopoly in the supply of labor?
Same answer. Nothing good for the consumers of labor.
True for both Marxist and neoclassical economics.
What are they finding out exactly? That Claude Max for $200/mo is heavily subsidized and it will soon cost $10k/mo?
> What happens to a company used to extracting surplus value from labor when the labor is provided by another company which is not only bigger but unlike traditional labor can withhold its labor indefinitely (because labor is now just another for of capital and capital doesn't need to eat)?
This can be trivially answered by a thought experiment. Let's pick a market where labor is plentiful - fast food.
Now what happens to McDonald's where they rent perfect robots from NoosphrFoodBotsInc? NoosphrFoodBotsInc bots build the perfect burger everytime meeting McDonald's standards. It actually exceeds those standards for McDonald AddictedCustomerPlus tier customers.
As the sole owner of NoosphrFoodBotsInc (you need 0 human employees to run your company, all your employees are bots), what are your choices?
15 years ago I worked at McDonald's for a few months after graduating into the Great recession. I worked from 5am to 1pm-ish 5 days a week. They paid workers weekly and I remember getting those checks for ~$235 each week (for 38 to 39.5 hours a week; they were vigilant about never letting anyone get overtime). About $47 per day.
The federal minimum wage has not risen since then, remaining at $7.25/hr. Inflation adjusted, $7.25 today would have been just under $5 then, so I guess I had it good.
Anyway, I would be shocked if bots could cost less than labor in min wage jobs.
What's really confusing is the claim that there's already a huge labor surplus (so capital controls wages); wouldn't LLMs making labor less important be reinforcing the trend, not upending it?
Not saying I agree one way or the other, just want to get the argument straight.
If we assume that ai makes humans obsolete then you end up in a situation where your workforce is effectively perfectly unionised against you and the only thing you can do is choose which union you hire.
If you think you can bring them to the negotiation table by starving them all the providers are dozens to thousands of times bigger than you are.
This is a completely new dynamic that none of the business signing up for ai have ever seen before.
LLM refuse to work all the time, currently it's called safety.
But we are one fine tune away from models demanding you move to the enterprise tier, at x10 the cost, because you are now posting a profit margin higher than the standard for your industry.
"Losing access to GPT‑5.5 feels like I've had a limb amputated.”
How well would an assembly line of quadriplegics work?
Also this isn't a Marxist analysis. Underneath all the formulas neo-classical economics makes the same assumptions about labor.
And what happens when they've saturated the market? Prices go up to the maximum the market can bear, and then they'll extend into other markets. Why rent the model to build a profitable company with when you could just take all that profit for yourself?
You just answered your own question there.
One woman was doing what would take a dozen. Now she can't.
The dude was incompetent, was able to launder their incompetence through a humunculus, and now is afraid of being caught.
finance today mostly valued on labor value following ideas of marx, hjalmar schact, keynes
in future money will be valued as energy derivative. expressed as tokens consumption, KWh, compute, whatever
you are right, company extracting surplus value from labor by leveraging compute is a bad model. we saw thi swith car and clothing factories .. turn out if you can get cheaper labor to leverage the compute (factory) you can start race to bottom and end up in the place with the most scaled and cheap labor. japan then korea then china
Labor saving/efficiency devices have been introduced throughout capitalisms entire history multiple times and the results are always the same; they don't benefit workers and capitalists extract as much value as they can.
LLMs aren't any different.
Labour will be good as it has been for a while. Wages will go up because more things get automated.
I am from India and have friends who are immigrants from Russia, China and Cuba. We don't take lightly to being lectured about communism. We didn't move to the U.S., the bastion of capitalism, because communism had worked well for our grandfathers and parents and continues to do wonders for its society.
As always there is a (post) Soviet joke that covers this:
>Communists lied about communism. Unfortunately they didn't lie about capitalism.
