Tech Tycoons have Got the Economics of AI Wrong

Even as economic development was simply removing, some economists were already pessimistic. Coal, wrote William Stanley Jevons in 1865, is « the mainspring of modern-day product civilisation ». Yet it was finite and would soon run out. Although more could be discovered by digging deeper, it would be progressively costly to extract and these higher expenses would lower the competitiveness of Britain’s producers. After all, in other nations the black fuel was still in sight of daylight. Efficiency gains-using less coal to produce the exact same quantity of stuff-would not conserve the country. Indeed, cleverer use of restricted resources would merely offer an incentive to burn a lot more coal, which would, paradoxically, cause an even faster usage of British reserves. There was no escape, the Victorian financial expert believed. Coal would be tired and the nation was most likely to « contract to her previous littleness ».

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This short article appeared in the Finance & economics area of the print edition under the headline « Rocked by DeepSeek »

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Tech magnates have got the economics of AI wrong

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