I'm looking at the second and third order effects of technologies. LLMs massively increase the surplus capacity of human civilization, and it is this surplus capacity enables resources (including human capital) to be expended on developing frontier technologies like rockets that can accelerate the development of space-faring capabilities.
There are certainly ecological costs, but in the long run, Earth's life will only survive if an advanced species like ours is able to transport it off the planet before the sun expands and boils away the ocean and atmosphere, in approximately 800 million years.
What I'm saying is not spurious speculation is the idea that the healthcare industry across the developed world has gotten more expensive because it has become less market-based and more top-down controlled. That's an extrapolation from the observed patterns across dozens upon dozens of industries.
As for the difference between the U.S. healthcare system and healthcare systems in other developed countries, if they had the same output of health care services, I would agree, but the US has far more diagnostic equipment per capita and more advanced treatments. It has the best neonatal facilities in the world. These are extremely costly and some of this expenditure doesn't actually produce that big of a difference in outcomes because it's really just dealing with end of life care, or a relatively small number of patients (e.g. premature infants). But when people are free to spend their money as they wish, this is what they prioritize. I'm also not ruling out that the U.S. healthcare system has less efficient government intervention than the healthcare systems of other developed countries. This is not mutually exclusive with the idea that, more broadly speaking, the structural change towards more government intervention has raised costs across developed world healthcare systems.
The more important question in my opinion is why health care spending across the entire developed world has skyrocketed over the last 40 years. It can be fairly inferred that the cost increase is directly related to increased administration and a lack of the kind of cost-cutting innovation seen in every industry that is substantially more market-based / consumer-driven, i.e. less top-down regimented, than healthcare.
Even cosmetic and laser eye surgery has seen costs come down over the last 40 years. That's what we should be seeing in the rest of the healthcare industry. And the reason we're not is because they operate under very different economic forces than cosmetic and laser eye surgeries, on account of government encouraging people to be covered by either public insurance or private insurance.
Assuming agent costs keep declining exponentially as they have over the last three years, why would everyone not own some agents? It's not like the number of agents is capped and the billionaires hoard all of them. I imagine it would be more like smartphones, where there were only 50 million smartphones after the iPhone was first released in 2007 and now there are something like three billion. They become more accessible and plentiful over time. Same thing should apply to agents.
And in this world of abundant agents, what advantage does the billionaire have exactly over the non-billionaire? Their employees are less motivated than owner-operators, and they no longer have the scale advantage that large corporations used to have. Each individual can effectively operate like a large corporation, because each individual can have their own large synthetic workforce at very low cost. The scarce resource here then becomes uniquely human insights and real motivation, which entrepreneurs are always going to have more of than employees.
Housing is exceptionally vulnerable to capture because it is immobile. AI on the otherhand should see its cost continue to plummet due to competition. Per token costs have already fallen exponentially over the last three years.
I'm not sure if this addresses the point you're trying to make though. If not, please clarify your argument for me.
Health care costs across the developed world have skyrocketed for exactly the same structural reasons. Yes, implementations have been different in their details, but the larger structure is the same no matter where you look in the developed world. Government intervention has increased. That means more top-down management and less bottom-up self-organization based on private property and individual incentives.
This is not some spurious speculation. That market-based systems drive down costs enormously is replicated across dozens upon dozens of industries. It's one of the most replicable results in economics to the extent that economics can be replicable. As for why the costs in other countries are not quite as high as the U.S., it's because health care costs also increase as per capita GDP increases and the U.S. has higher per capita GDP. Moreover, because the U.S. has some aspects of its health care system still living more in the private sector, there is less top-down rationing. Other countries see very clear examples of rationing, so people spend less on end-of-life care.
I strongly agree that socializing the healthcare industry will not help in any way. To the extent that healthcare costs have skyrocketed, it's precisely because of government intervention in the U.S. Healthcare industry has massively increased over the last 50 years, especially in the form of tax incentives for employers to compensate employees by way of health insurance. Anyway, with respect to the labor share of income, that is not correct. Employer contributions to employee health insurance premiums are included in the labor share.
I wonder if labor itself will become an anachronism in the age of AI. Perhaps the future economic landscape will be dominated by capital because everyone will own capital. You will command a small army of agents to do whatever you want. You will no longer need to work for someone. You own small businesses far more than you could possibly operate in the pre-AI era and they will mostly operate autonomously with minimal direction and some guidance from you.
That's a reasonable concern. Any industrial site is going to be a concern for nearby residences. But even proposed sites far away from any residential settlements are being opposed. The proposed National Data Center moratorium, for instance, is completely sweeping and would be devastating for U.S. strategic interests.
As for tax revenue, data centers contribute significantly to local communities.
"Loudoun County, Virginia, often dubbed the "Data Center Capital of the World," provides a compelling example of how data centers can reshape a community's fiscal landscape. In 2018, the county hosted about 13 million square feet of permitted data centers. By 2024, that figure skyrocketed to 43 million square feet—a 231% increase in just six years.
This remarkable growth has substantially boosted Loudoun's tax base. The county's data center industry now contributes an estimated $890 million annually in tax revenue, nearly matching its entire operating budget of $940 million.
What makes data centers particularly advantageous is their cost-to-revenue ratio. For every dollar of tax revenue received from data centers, the county spends just $0.04 to support them, compared to $0.25 for traditional businesses. This financial efficiency has allowed Loudoun County to maintain the lowest real property tax rate in Northern Virginia—approximately 25% lower than neighboring counties."
According to late Intel founder Andy Grove, having domestic manufacturing, including chip fabrication, is very important for a country's ability to innovate.
What's incredible is how much resistance there is in the U.S. to do what for other countries is the obvious strategy forward. The U.S. — after decades of seeing manufacturing being outsourced — suddenly has an incredible advantage in data centers that is producing onshore facilities that are adding hundreds of billions of dollars in annual export revenue, and instead of there being a united front to maximize that advantage, there are huge obstacles being thrown in the way of the companies, administration and the state governments leading the data center expansion campaign, with Sanders and AOC calling for a national data center moratorium.
I think one of the highest-leverage U.S. economic strategies right now is to maximize the upside from the AI data-center boom.
That means reducing any bottlenecks around not just data-center construction, but also adjacent industries like power generation and transmission.
If the U.S. can scale the infrastructure around AI faster than other countries, it can gain a decisive economies of scale advantage in numerous industries that could lead to export boom.
Censoring the internet is about as anti-democratic a policy that can be implemented.
I remember reading someone argue that anytime you see a claim that we need to do something to protect democracy just replace the word democracy with bureaucracy and then the statement makes sense.
The KYC/permissioning of the web will be abused by governments to censor dissent and cutoff dissidents from the internet.
You're free to put child-safe software on your personal computer at home. Your desire to keep your kids safe doesn't justify stripping everyone else's right to permissionlessly access the internet. Having to get the permission of a gatekeeper (who, at first, will only verify you're an adult, but tomorrow, will verify your speech is not subversive) to access the internet subordinates the populace to the state in a dramatic fashion.
The most important question here is not whether social media access should be banned to children. The question is whether everyone's rights should be stripped in an effort to enforce such a ban. I find this whole globally coordinated endeavor to be outrageous in its illiberality, and manipulative in its appeal to protecting children to justify these encroachments on people's rights.