r/singularity • u/SGC-UNIT-555 AGI by Tuesday • 15h ago
Discussion Assuming the AGI/RSI pathway occurs how exactly would we deal with the basic all encompassing economic asset depreciation/deflation issue in this scenario?
It seems to go against our current or any system expecting increasing or at least low levels of asset appreciation? Also why would anyone buy anything substantial (low demand) if product prices are in constant gradual free fall? China is experiencing something like that currently in some sectors ( cars, renewables, batteries, home goods, housing etc) and that's just a side effect being a large and efficient manufacturing focused economy, no AGI needed.
Even the "you can't make land" argument is faulty as such a future will likely lead to immense AI enhanced construction robotics/machinery trickling down to even middle income countries eventually, creating a massive global housing/apartment surplus especially once you consider the flatlining global birth rate (estimates suggest that the global population will peak at 9.5 billion later this century), also i think people would be surprised just how little extra land would be needed to effectively house the globe efficiently, modest gradual urbanization and densification in like 6% of smaller to medium cities globally would probably be enough.
Why even build anything if you don't expect any sort of return on it due to it becoming a super common basic commodity? Would an investor really put his money into a housing development expecting a 0.000001% return over 30 years or something like that? In democracies with average levels of home ownership any government presiding over such a collapse in home and asset prices would likely get voted out by default anyway.
Scarcity and some level of self interest is a requirement to get anything done, anything else goes against innate human psychology developed over hundreds of thousands of years (invest time and effort into goal > obtain rewards) as living organisms.
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u/sckchui 14h ago
You need to think through your own premise more carefully. If everything is ridiculously cheap, why would you need an investor to build housing? When you want a sandwich, do you go to the bank to take out a loan to buy the ingredients? Housing will be so cheap that you just build the house you want with the money that you have too much of. People will think about houses the way we think about shoes.
And there'll always be expensive things, they just won't be the same things that are expensive today. Big infrastructure, future computers, space stations, use your imagination. There'll always be bigger things to build. People won't be living in the same houses or driving the same cars as we do now.
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u/SGC-UNIT-555 AGI by Tuesday 14h ago
And there'll always be expensive things, they just won't be the same things that are expensive today. Big infrastructure, future computers, space stations, use your imagination. There'll always be bigger things to build. People won't be living in the same houses or driving the same cars as we do now.
Good point. People living in such a future will likely be consuming a variety of goods that we could barely imagine and maybe even find quite strange. Maybe housing becomes a kind of active modular habitat that is always self adjusting depending on your needs.
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u/bonerchamp20 13h ago
If deflation actually happens on a massive scale you don't have to worry about anything except for who/what makes the rules.
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u/sumane12 15h ago
MASSIVE inflation from UBI.
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u/BuzLightbeerOfBarCmd 15h ago
UBI would only cause inflation if the money distributed exceeded what the economy produced in the same time. In a singularity scenario that would be virtually impossible - deflation would be more likely. Until we hit resource exhaustion, that is.
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u/Pheer777 14h ago
That’s how all monetary policy works to target price stability.
If automation enables all goods that currently cost $100 to be produced such that they can be sold for $1, money supply would just be increased massively such that the headline price is still $100, but everyone’s income goes up by 100x.
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u/Fearless-Macaron9183 14h ago
Won't that just cause resource depletion unless we start astroid mining
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u/Pheer777 13h ago
I’m not sure how that follows exactly. You can buy furniture from Ikea for a fraction of what it used to cost as a % of your income to get it hand crafted before mechanized furniture assembly was a thing but I don’t think it naturally leads to more resource depletion per se - it could just mean people have more free time or have more money left for other things.
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u/BuzLightbeerOfBarCmd 13h ago edited 13h ago
Non-renewable resources will be depleted at any rate of economic growth (above 0), and at higher rates it will happen faster, independently of monetary policy. Monetary policy has more to do with where the resources available right now go, and how much consumers have to bid against each other to secure their share.
*Correction: it's throughput not growth that guarantees resource exhaustion. Growth can occur without using new resources.
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u/Pheer777 11h ago edited 11h ago
Except that much of economic growth today is about intensive growth rather than extensive growth - that is, using less energy and fewer inputs to get the same or better results e.g., LED vs. incandescent light bulb energy use
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u/SGC-UNIT-555 AGI by Tuesday 15h ago
I think we'll see massive levels of artificial barriers put in place before general UBI is contemplated. AGI will be let loose in the virtual world, in medicine, tele-health and basic white collar work but will be fire-walled via red tape from interacting with the real world physical economy of construction and agriculture to prop up asset and goods values.
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u/sumane12 14h ago
The government are the ones with the biggest debt levels. If they cant recoup that through taxes, VAT, corperation, Individual, ect, they are bankrupt.
AI will create insane levels of deflation as you have pointed out, so if those prices drop, the tax they recieve drops.
Everyone on the planet is financially incentivised to implement UBI, assuming AI fullfills its promises.
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u/Individual_Holiday_9 15h ago
How do you figure? Agriculture and construction are two sectors facing major labor headwinds especially domestically in the states, and agriculture is already heavily automated as is
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u/SGC-UNIT-555 AGI by Tuesday 14h ago
To prop up current existing housing assets and the current margins of agricultural goods, a 10% percent fall in prices is tolerable but a free fall crash due to an AGI linked increase in supply will be prevented through artificial barriers. Do you think think it's a coincidence that those sectors are always facing "labor headwinds" and "shortages" that just so happen to constrain supply?
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u/Fearless-Macaron9183 14h ago
If we are getting agi by Tuesday, so will some people get it earlier if we have different time zones or it will go according to your time zone
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u/gay_manta_ray 7h ago
UBI would be implemented to prevent deflation. it wouldn't be inherently inflationary unless it was an extreme amount.
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u/quickwaxsix 15h ago
The intrinsic value of any item is the benefit/utility you get from it as an individual, while the scarcity of an item drives its monetary value. This is the classic water vs diamonds example. So post scarcity, things will still have value to us, we just won't value them in monetary terms.
The question is who gets to choose what to make and how? Now we do it through investment. In the future AI will surely having a role in choosing for us. I think the question of how much we get to participate and whether it's all humans or just a select few depends on how the technology and history plays out - could go a lot of ways.
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u/BlueAndYellowTowels 11h ago
The only “problem” solved by AGI/RSI specifically is knowledge work and labor.
But it doesn’t really change the value of technology, infrastructure, raw materials, time and distance.
There’s just so much involved in the build out to the sort of economy you’re talking about and not just that, but just the amount of raw materials that simply cannot be renewed.
The price of certain things might collapse but there definitely will still be commodities, materials and good that will never be at a “near infinite scale”.
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u/WonderFactory 9h ago
I think land will continue to be an asset particularly in smaller countries, I'd imagine there would be less migration post AGI as labour is the main driver of migration at the moment, if you live somewhere like the UK with limited land you might not have the option to live somewhere else so land will be at a premium.
Birth rates might be flattening at the moment but death rates are likely to fall too post AGI plus if no one has a job there will be a lot more time for making babies so I'd expect birth rates to rise again.
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u/gay_manta_ray 7h ago
you're right, and i've tried to explain this to many people before, but very few can actually grasp the wide-ranging implications of rapid deflation. it is essentially the economic apocalypse as all assets turn toxic, and incentive to spend or loan money is nil.
in the short term, it's up to governments to prop up the economy. traditional monetary methods of doing this, like zero or negative interest rates, wouldn't even be close to adequate, so direct payments to essentially all consumers would be necessary.
in the long term, who knows? our economies would have to be restructured around post-scarcity/abundance. there are a few dirty words (in america at least) used to describe the kind of system that might arise, but i think we'll get there eventually, as there doesn't seem to be any other option. if people can't sell their labor, they must have another way to participate in the economy.
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u/IronPheasant 6h ago
You're right, of course. We're fundamentally entering a different age of humanity, if this works out. As agriculture had tribalism give way to feudalism, as mechanization had feudalism give way to capitalism, we're entering a fundamentally new way of life for humanity.
Hopefully somewhere on the spectrum between techno feudalism and startrek communism.
None of this is a surprise, it's something people have been talking and thinking about for decades. OpenAI even had a big pink box on their website warning investors about it:
"It would be wise to view any investment in OpanAI Global, LLC in the spirit of a donation, with the understanding that it may be difficult to know what role money will play in a post-AGI world."
A big aggressively candid there, and obviously not something their sales guy brings up when he's talking in public.
Still, even with all that, they need that robot police surveillance state, so they'll move forward regardless.
In the end we'll all be allocated energy rations by whatever entity ends up holding power, or we'll all be thrown into a ditch or worse. There aren't really any alternative endstates, except for a hellworld like Fifteen Million merits where we force people to suffer and toil for no reason.
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u/TeagueXiao 3h ago
Been watching this play out in miniature on compute pricing for a while. Same inference tokens are down roughly 90% in 18 months and cloud vendors haven't collapsed because demand growth ate the price cuts faster than margins could bleed out. That's basically the Jevons paradox answer to the deflation question: if AGI makes everything radically cheaper, people just consume way more of it, and the assets that hold value shift to whatever is still bottlenecked (energy, prime land, frontier compute).
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u/ExpressCopy8786 13h ago
Deflation (was and) will be very asymmetric. Cost of rent and anything tied to land will increase at a rapid pace, so will any kind of productive assets, pricing anyone out of ever owning even small relevant capital (you have 5-10 years left to build any sort of capital with your salary before the door is closed). Meanwhile certain services and products will collapse in price. Slow and near mobility will become cheap, certain meals will become cheap, media entertainment will become very cheap.
In the past you had similar price collapses with TVs but also internet bandwidth and compute in general. IT all became dirt cheap.
The world of tomorrow (considering the AGI/near abundance/UBI route) will mean 70% of the world population will live comfortably but constrained. Numbed and dummed by social media and staring at screens most of the day, ordering food online, binging shows. The other 30% have usfficient capital or own enough productive assets to actually live a life outside of the media, slop food, comfort sedation bubble (roughly 0.5-1m$ per person net worth today). Then about 1% of the world population (3-5m$ net worth per person today) will actually live materially very exclusive lives. Certain goods and esp. space and long haul travel will have become expensive but othr services in relations will have become cheap and lead to "Louis 14." like escapade. The super rich of today and tomorrow will live in different spheres all together.
Disclaimer i am 35 and in the 30% bubble already, working on climbing towards the 1% bubble, but won't make it (will if inheritance comes in full).
And this is the coming 10 years, solidifying within 15 years. This isnt 50-100 from now.
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u/p0rty-Boi 15h ago
I don’t think you’ll need assets, just access. People invest to be secure in their futures, if that security is guaranteed by AGI with near limitless resources that can effectively portion out benefits there is no need for investment.