AI and the Economy
What if Freddie deBoer wins his bet?
Freddie deBoer is staking out a position as an AI skeptic.
I’m offering a wager to Scott that the economy will remain basically “normal” through February 2029. Why focus on the economy? Because economic terms are more-or-less objective and measurable. This bet uses concrete, widely-accepted economic indicators (unemployment rates, GDP, wage levels, inequality metrics) rather than debating fuzzy terms like AGI or “the Singularity,” which aren't scientifically defined and let people move the goalposts endlessly. (Which of course is why AI companies and evangelists love them.) If AI is truly about to revolutionize everything the way proponents claim, we should see massive economic disruption: widespread job losses, productivity explosions, collapsing wages in knowledge work, extreme wealth concentration, extreme changes in fundamental economic indicators in either direction, something like that, some truly significant changes in large-scale economic data
He only wins if all of his conditions hold, which works against him. I also think he might have been rash to write
No single BLS occupational category will have lost 50% or more of jobs between now and February 14th 2029
How broadly is “occupational category” to be defined here? There might be some tiny little sub-category that goes from 200K jobs to 100K jobs, and you don’t want to lose the bet based on that.
Otherwise, for a three-year time horizon, I would give Freddie about a 60 percent chance of winning. But that does not mean that I agree with him in his AI skepticism. I think if you go out six or eight years, many or all of his benchmarks will fall. And if it plays out that way, then skepticism is the wrong place to stand.
As I read it, his AI skepticism is more long-term than the three year betting window he proposes. He is one of the people who just hates the technology.
I am not at all persuaded by skepticism. If I were younger and had more energy, I would be like some of the students at UATX, who already are using OpenClaw, which did not exist a few weeks ago. When they get out into the world, they are going to be running laps around today’s work force. That is going to have an impact.
On Friday, I took a bike ride for a round trip of close to 50 miles. After 20 miles, I took this picture.
It was not much of a destination. Just thought I’d try something different.
There's an interesting econometric side angle here when it comes to trying to set the tolerances in the bet that will represent truly revolutionary economic transformation while still making people be willing to take the bet. For example, a lot of people have objected that my 18% unemployment figure is so high that there's no chance I'll lose on that one. But a) I thought the whole point was that AI was imminently going to dramatically undercut the labor market and put a ton of people out of work and b) just 5 years ago we had a 15% unemployment rate due to an entirely non-AI reason. I found a genuinely difficult to set thresholds that would not make me lose the bet due to non-ai catastrophes!
Ha, I know exactly where that spot is on Pearce Lane. Didn't even need AI. Interesting things going on in Bastrop, for example, that's where the Boring Company is headquartered. If you can't go across it, go under it.