Tyler Cowen - The #1 Bottleneck to AI progress Are Humans
Episode publishedPodcast: Dwarkesh PodcastDwarkesh Podcast
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Tyler, welcome. Dwarkesh,
great to be chatting with you.
Why won't we have explosive economic growth 20% plus because of AI?
It's very hard to get explosive economic growth for any reason, AI or not. One problem is that some parts of your economy grow very rapidly, and then you get a cost disease in the other parts of your economy that, for instance, can't use AI very well. Look at the US economy. These numbers are guesses, but government consumption is, what, 18%. Healthcare is almost 20%. I'm guessing education is 6 to 7%. The nonprofit sector, I'm not sure of the number, but you add it all up. That's half of the economy right there. How well are they gonna use AI? Is failure to use AI gonna cause them to just imm
The mechanism behind cost disease is that there's limited amount of laborers, and if there's one high productivity sector, then wages everywhere have to go up, so your barber also has to earn twice the wages or something. With AI, you can just have every barbershop with 1,000 times the workers, every restaurant 1,000 times the workers, not just Google. So why would the cost disease mechanism still work here?
Cost disease is more general than that. Let's say you have a bunch of factors of production, say 5 of them. Now all of a sudden, we get a lot more intelligence, which has already been happening, to be clear. Right? Well, that just means the other constraints in your system become a lot more binding, that the marginal importance of those goes up, and the marginal value of more and more IQ or intelligence goes down. So that also is self limiting on growth, and the cost disease is just one particular instantiation of that more general problem that we illustrate with talk about barbers and string
If you're talking to a farmer in 2000 BC and you told them that growth rates were 10 x, 100 x, you would have 2% economic growth, after the industrial revolution, and then he started talking about bottlenecks, what what do you what do you say to him in retrospect?
He and I would agree. I hope. I think he I would tell him, hey. It's gonna take a long time. And he'd say, I don't see it happening yet. I think it's gonna take a long time. And we'd shake hands and walk off into the sunset. And then I'd eat some of his rice or weed or whatever, and that would be awesome.
But the idea that you can have a rapid acceleration in growth rates and that bottlenecks don't just eat it away, I mean, you you could agree with that. Right? Could
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