The AI Layoff Trap(arxiv.org)
arxiv.org
The AI Layoff Trap
https://arxiv.org/abs/2603.20617
3 comments
A lot of this commentary lacks nuance.
So a firm lays off more people and becomes more profitable. It then has two choices: pay out the profits or reinvest.
Reinvest into what? Hopefully value creating projects. Do these projects fall out of thin air? Lmao nope. Economists tend to model a whole bunch and get rid of important details like this. Value creating projects are not easy to conjure up.
And then you get people claiming “the llm will figure out the next project” lmao what? That’s science fiction. If that were to exist the entire economy should be nationalised.
So a firm lays off more people and becomes more profitable. It then has two choices: pay out the profits or reinvest.
Reinvest into what? Hopefully value creating projects. Do these projects fall out of thin air? Lmao nope. Economists tend to model a whole bunch and get rid of important details like this. Value creating projects are not easy to conjure up.
And then you get people claiming “the llm will figure out the next project” lmao what? That’s science fiction. If that were to exist the entire economy should be nationalised.
the other mistake taking A.I companies at their word - that these models even as they supposedly get more capable - have structural deficiencies.
the other Is ignoring the velocity of money