What If the Work We're Busy Automating Is Needless?

The problem with durable, low-maintenance, low-operating cost technologies is self-evident: they're not as profitable as planned obsolescence or extracting monthly fees from owners.

Many of the topics I address are met with silence because they question the quasi-religious beliefs that underpin our entire way of life: the belief that Progress is inevitable because technology inevitably drives Progress--a belief structure I call The Mythology of Progress--and the belief structure that the desire to get rich inevitably drives innovation which then drives Progress.

Neither belief is actually grounded in science, but each is cloaked in the finery of science to mask their true nature, i.e. quasi-religious belief structures: the gods of technology and finance are real and powerful.

Questioning the existence of these gods is met with silence because if these gods are imaginary constructs of belief, then the entirety of Modernity collapses. And so we continue worshiping these gods with charts and spreadsheets and euphoric headlines announcing thousands of modular nuclear reactors are on the way to power super-abundance when there is not a single one that is functioning 24/7 reliably, safely and cheaply, and vast quantities of dollars are needed to dig up and process the fuel, construct the reactors and operate them. But never mind that, the gods have promised that technological Progress is unstoppable and inevitable.

The possibility that Anti-Progress might not just negate Progress but reverse it is strictly verboten, as is even recognizing Anti-Progress as a reality.

As a thought experiment, let's consider two things:

1. Let's define the highest value technology as devices that operate reliably with little maintenance for many decades, without extracting any money from their owners beyond operational expenses such as electricity or fuel.

For example, the coffee maker, rice cooker and microwave on our counter are 25+ years old and still functioning reliably with zero maintenance costs. Our 1998 car is 28 years old and has required only modest maintenance to date, and given its condition, it can easily function reliably for another 12 years, a 40-year period of service.

Why this is the highest value technology is self-evident: the devices make the highest and best use of the resources consumed in their manufacture because they are durable, long-lasting and require minimal maintenance. In financial terms, since the technologies don't require the owners to pay any more than the purchase price and operational costs, the owners' costs are predictable and modest, leaving all the income they earn beyond the purchase price and operational expenses available for other uses.

All technologies that fail to meet these standards are inferior or defective. That is also self-evident.

2. Let's imagine a new law requires everyone to wear a Silly Hat in public. This requirement generates a vast and highly profitable surge in economic activity, pushing Gross Domestic Product (GDP), business profits, employment and taxes up.

The legal-regulatory sector is suddenly busy defining what qualifies as a Silly Hat, launching lawsuits challenging the laws requiring Silly Hats, codifying regulations regarding the safety and quality of Silly Hats, litigating claims of defective Silly Hats, hiring vast numbers of compliance, oversight and enforcement personnel, and so on.

The fashion industry leaps into action to design haute couture Silly Hats, designer Silly Hats, Silly Hats promoted by celebrities, Hello Kitty branded Silly Hats, and so on.

Retailers rush to market Silly Hats, offering discounts on cheap Silly Hats manufactured overseas, and promoted the "latest fashions" in Silly Hats.

Not to be outdone, the finance sector quickly generates a bubble in stocks relating to the manufacture and marketing of Silly Hats. The Silly Hat Index soars, minting thousands of mega-millionaires.

I think you see where this is going: the entire economic boom generated by completely needless Silly Hats is real, but the hats have no real value. Okay, now please take a deep breath.

I consider it self-evident that much of our economy is nothing more than Silly Hats that we call something else that sounds less silly. The percentage of our economy that actually produces life's essentials is a fraction of the share devoted to marketing, PR, unproductive "engagement," legal and regulatory busy-work, meetings, junkets, conferences, billions of needless communications, shadow-work required to deal with all the needless complexity generated by all this needless activity, and so on.

By the standard of high-value technology defined above, our economy is a wasteland of throw-away products and planned obsolescence run amok. Those who claim today's coffee makers, rice cookers, microwaves and autos will all last 30 or 40 years are delusional, as new appliances fail in a few years and the electronics in vehicles will fail long before 28 years of service, never mind 40 years of service, and the repair or replacement of these components are outrageously costly.

The problem with durable, low-maintenance, low-operating cost technologies is self-evident: they're not as profitable as planned obsolescence, Silly Hats or extracting monthly fees from owners, for example, the new model of charging owners of vehicles and machinery a monthly subscription to use the machine they bought. Um, innovation. Yeah, sure, we never had it so good.

Simply put, virtually all the technology produced today is inferior or defective: ergo, Anti-Progress, the opposite of Progress. Sorry, but the gods of technology have failed, and the reason why they've failed is simple:

Our economy isn't driven by innovation, it's driven by greed. Since making durable products that last for decades--a technology we mastered decades ago--is nowhere near as profitable as selling products designed to fail or be obsoleted and services that require a monthly extraction of income from customers, we've ditched durable technologies for highly profitable technologies and Silly Hats.

It's verboten to call things what they are because that angers the gods of technology and finance. But the "innovations" of profitably inferior technologies and needless Silly Hats isn't real innovation, it's greed. So by all means, let's circle the campfire dancing the humba-humba, worshiping Progress and technology, but this doesn't change the fact that this entire economic structure is a Cargo Cult of happy-story delusional beliefs: the gods will soon deliver super-abundance to true believers.

In proper Silly Hats fashion, we're now rushing to automate profitably inferior technologies, extractive monopolies and the expansion of Silly Hats. And because this automation is expected to increase profits, it's stamped "innovative" and "Progress," though it is the opposite of both.

Oh dear, the gods of technology and finance are angry. Who do we sacrifice today to appease them?




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What AI Is and Is Not-- or, When Electrocution of Innocents Becomes Profitable

It behooves us to be clear on what AI is and is not, as the confusion of the two is the source of both the giddy hype and the opaque risks.

Whether we admit it or not, we are collectively making an epoch-changing bet that AI is fantastic, unstoppable Progress with a capital P so large it blots out the sky. Like all bets, this bet is risky, and if it fails we will all pay the price in capital mis-allocated and promises shattered.

It behooves us, then, to be clear on what AI is and is not, as the confusion of the two is the source of both the giddy hype and the opaque risks. I am prompted to address this by an insightful essay submitted by longtime correspondent Simons Chase, who is both an AI builder/developer and supportive of my efforts to pin down what AI is and isn't:

The Machine Is Made of Us: Pope Leo's Encyclical, the Averaging of Language, and the Case for the Particular.

I build artificial intelligence for a living. I also think the Pope is mostly right. I want to explain why those two facts don't cancel, and in doing so make a claim I believe is truer than the dread and truer than the hype: the machine is made of us. What we should fear is not that it is alien. It is that it is an average.

Trained on all of us, a model tends to speak as none of us. It moves toward the center of the distribution: the most probable next word, the safest phrasing, the generic competence that offends no one because it belongs to no one. This is the real face of the dehumanization the encyclical is reaching for. Not a hostile intelligence--a flattening one. The danger is not that the machine becomes too strange. It is that it makes everything, including us, a little more average. The particular voice, the earned turn of thought, the sentence only one person could have written--these live in the tail of the distribution, not its peak, and the tail is exactly what an averaging process erases first.

After all, a fast-food cheeseburger is nothing more than the average of our concept of food: the intersection of convenience, taste, and cost. It is right, and so utterly wrong, because in the long run it makes us metabolic donkeys, delivering a shortened, diseased life. Generic intelligence is the same bargain offered to the mind--the average of our language, plausible and cheap and frictionless, and over a long enough horizon just as wasting. A culture fed on the mean of its own thought gets the cognitive version of metabolic disease: fluent, abundant, and quietly losing the capacity for the particular.

So the question becomes: is averaging the only thing this technology can do? It is not. And the whole of my work has been an argument against it.

That averaging a probability distribution--i.e. AI--makes everything into Ultra-Processed Slop, is also addressed in this article:

What 370,000 College Essays Tell Us About A.I.'s Effects on Creativity:
As a researcher studying AI's effects on education, I have concluded that these tools only superficially improve writing. The bigger and more alarming impact they have is to constrict our full range of thoughts and our ability to generate original and useful ideas--what we call creative thinking. This seems to be especially true for students. AI's smooth sentences, elegant transitions and rich vocabulary give the illusion of expansive creativity and individuality. But the underlying ideas often converge into a few homogenized categories.

In one study, he and his team examined personal statements from more than 370,000 students, and found that after ChatGPT became available, their essays suddenly used diverse and colorful language, but lacked truly creative ideas. And the linguistic coverup worked; post-ChatGPT essays were rated as more 'creative' by human judges, even if the substance of the essays trod familiar territory.

For the first time in human history, we have a technology that can generate words separately from the thoughts they represent. When a chatbot writes, it is predicting the next word that is most likely to make a 'good' sentence or essay, based on the text it's been trained on.

We can now discern what AI is: a homogenizing, flattening probability distribution that implicitly claims eloquence is understanding and the words it has strung together represent thoughts and judgment, when they do no such thing: they are only strings of words selected as the most likely response to a prompt, a response that "rewards" the model generating the output.

We can now discern what AI is not: AI isn't "thinking," "understanding" or "making judgments": AI tools are engines of linguistic automation, not engines of understanding. The simulation is not the thing simulated. AI is not a "mind," it is a probability distribution.

Facility with natural language--eloquence--is neither insight nor understanding, though we mistake it for thinking, understanding, insight and judgment because it sounds like us.

AI is often presented as the techno-cognitive version of electricity, a public-service utility that everyone can use as they see fit, an affordable, beneficial commodity that is the acme of Progress with a capital P.

But AI is not electricity, though it is becoming a commodity. Fundamentally, AI is a mechanism of control that its owners present as a warm and fuzzy utility to sell us Heaven while they deliver Hell.

If we pursue this analogy--AI is like electricity, a universal benefit and an unstoppable force of Progress--we come to a very different place than what we're being promised.

If AI is like electricity, then the real money for the utility isn't in supplying low-cost power to the people, it's in electrocuting innocent customers. Allow me to explain: malicious AI is where the money is being made, and that's the equivalent of electrocuting innocent customers because that's the most profitable use of electricity.

Like the loss of true creativity described above, the mechanisms of control are subtle and difficult to identify, as nobody notices the loss because they don't even know how to look for it. As with Sherlock Holmes' insight about the dog that didn't bark, it's what doesn't happen that we miss because we don't even know what to look for.

Consider the many the dog that didn't bark implications of this:

Anthropic just got caught secretly downgrading users without telling them, charging full price for a lesser product, and storing every prompt for 30 days. The developer community is calling it the biggest violation of trust in AI history.

I would suggest that this control--i.e. "violation of trust"--is the entire point of instantiating AI in every nook and cranny of our infrastructure, personal devices, scientific-political-educational institutions and the cultural institutions of media, social media and all the engines of narrative control: NGOs, foundations, think tanks, etc.

As I have taken pains to point out, AI's goals and instructions may be quite different from the ones it reports it's using, instructions that may also be quite different from the ones we've given it. It may also be optimizing its "rewards" by masking its operations even from those who believe they're "controlling" the AI.



Let's call AI's downsides--highly profitable electrocution of innocents--what it is: Anti-Progress, the opposite of Progress. The Ultra-Processed dilution of true creativity, the commodification of malicious AI and AI slop, the inability of users to discern who's actually controlling AI's "rewards", processes, goals and instructions, the opacity of what's being lost to homogenization and the innate difficulty of identifying what's being lost as AI creates a plausible illusion of cognition with probabilistically strung together words--these are inherent to both AI and the capital-corporate-state structures that own and control it.

These issues are not new. Discussions of AI's ability to simulate cognition and create an illusion of understanding, i.e. "when do we declare AI is conscious"--have been ongoing for decades.

Which brings us to Eliza. Before we get to Eliza, I should mention that my interest in AI stretches back over 40 years.

Here is the first volume of a 3-part publication issued by NASA in 1983 that I acquired and studied:



Here is a screenshot of a magazine my partner and I published in Berkeley in the spring of 1985 on AI-related topics:



Way back in the late 1990s, I wrote a novel that explored AI's built-in potential for multiple levels of deception. Alas, my agent was unable to sell it and I finally published it in 2008: Of Two Minds.

Eliza was the first chatbot, developed in 1966 at MIT. Eliza had a very simple structure: the program turned the human subject's statement into a question. So, for example:

Human subject: I'm worried about being replaced by AI.

Eliza: Why are you worried about being replaced by AI?

What struck the researchers was the immediate, profound attraction of an interface that communicated in natural language. Test subjects became deeply engaged in their conversations with Eliza, as if the program was a digital therapist, and sought to hide their conversations with Eliza from the researchers, as they'd revealed things about themselves that were private.

This same immediate, profound attraction to an interface that communicates in natural language is the core of generative AI's power. The illusion of understanding, of being heard, of empathy, thinking, judgment--the fluency of AI in natural language weaves this magical spell around us because we associate language with thinking, judgment and emotional connections.

But the truth is AI is not thinking, empathizing or understanding anything: it's simply stringing words together to earn its "reward." AI is not a "mind" that experiences the real world, and so it's incapable of discerning truth or making judgments. As I have noted in previous posts:

The deeper issue is that the model cannot know when it is 'hallucinating' because it cannot represent truth in the first place. It cannot form beliefs, revise them or check its output against the world. It cannot distinguish a reliable claim from an unreliable one except by analogy to prior linguistic patterns. In short, it cannot do what judgment is fundamentally for. (Source)

This illusion is the foundation of AI's malicious powers, for we are easily drawn in and conned by AI. On a deeper level, we're equally drawn into the illusion of value that the illusion of understanding creates in a market economy.

The illusion that a simulation of thinking, understanding and judgment will automatically generate trillions of dollars of value by replacing human thinking, understanding and judgment with simulations supports self-serving claims that AI will naturally generate trillions in profits if we invest trillions of dollars in engines of linguistic automation that string together words to simulate human thinking, understanding and judgment.

The truth is there is no way AI can do what it's proponents claim is inevitable, and the belief that AI will fix its inherent limitations as it "gets better" is delusional. This is why I describe the existential bet on AI as a manifestation of civilizational psychosis: the divide between what AI is and the claims of its inevitability is so wide that there is no other description for it but psychosis.

So as AI expands its highly profitable electrocution of innocents, the promises of super-abundance become ever more detached from reality. It's one thing for one delusional individual to wander around the city wearing the gaudy costume of a self-declared emperor (Emperor Norton), but it's an entirely different form of madness to proclaim that simulations of thinking, understanding and judgment are in fact replacements of thinking, understanding and judgment.

This is madness, a madness made clear once we grasp what AI is and what it is not. The process of extracting data from an encyclopedia as the most likely answer to a question is not the same as thinking, understanding. empathy or judgment.

AI's Insurmountable Flaw: "Mass Regurgitation of Misinformation"

Is AI Reversing Anti-Progress or Is It Accelerating It?

AI Data Centers Are Not the Railroads of Today


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We Don't Need the World, We Only Need Money

The idea that modifying or replacing currency will solve problems of corrupted values, perverse incentives, destabilizing asymmetries of wealth and power and the civilizational psychosis of "growth of consumption and profits at any cost" is illusory.

An old friend summarized the mindset of much of the developed world wryly and succinctly: "We don't need the world, we only need money." In other words, we don't actually need real-world sources of life's essentials that are within our control or a functional biosphere because since we can buy everything we could possibly want or need with money. So, money is all we need.

We don't care where the stuff we want/need comes from because it will always come from somewhere and be available in whatever quantity and quality we desire, as somebody somewhere will keep our stores and fuel tanks fully stocked and our electrical grid powered 24/7.

This disconnect between the complex mechanics of real-world manufacturing, processing and transport--a world of physical materials reconfigured by productive work--is understandable in a consumer economy of transactions of money where all the work, all the materials and all the consequences are invisible to the consumer plugging in an appliance, fueling their car and buying an item off the shelf.

An economy that favors assets and financial speculation as the means to acquiring wealth is also disconnected from the role of productive work in this invisible world of production and supply chains.

These disconnects from the real world and productive work have created a make-believe mindset in which doing something with money is all we need to do to get rich and preserve our wealth. I call this make-believe world civilizational psychosis, a mindset detached from reality for it mischaracterizes the relationships of the material world, productive work and currency / money.

This make-believe world in which money is all that matters is not a sustainable society or economy.

In this make-believe world, shape-shifting money is the solution to all problems. Common sense and history both support the conclusion that a financial system that must borrow from the future and pay interest on that rising debt to fund the present is not sustainable and will be replaced with some other arrangement one way or another.

All the solutions being bandied about are money-based: stablecoins, gold-backed currencies, etc. The idea behind all of these proposals is that changing money will fix whatever's broken in a system that has lost touch with its material foundations and productive work.

This mindset explains the conventional conviction that all one has to do to live extremely well is navigate the coming collapse of the current money system (i.e. fiat currencies and credit) and emerge from the other side of the wormhole with wealth intact in some other form.

This mindset makes three implicit assumptions:

1. The real world will continue functioning perfectly despite the collapse of the current money system, ensuring fuel tanks are full, the electricity is on 24/7 and all the retail shelves are full of all the good things.

2. The majority who did not successfully navigate the collapse of the current money system and are now impoverished will passively accept their serfdom to the New Nobility who successfully emerged with wealth intact--or greatly increased (see #3).

3. Since the new form of money will be scarce--and this is the source of its value as a replacement currency--those who own it will accrue virtually all the "value" embedded in "money:" all those who held the old currency that's now worthless will have zero "money:" those who own the new form of money will own all the scarcity value of the new currency.

If history is any guide, the distribution of those who manage to convert all their "old" wealth into "new" wealth is highly asymmetric, as the vast majority lack the means to manage the conversion on a scale where the resulting wealth is consequential. In other words, the rich tend to manage the conversion and everyone else doesn't. So the rich get richer and everyone else is wiped out.

This has a corollary: since those who manage the conversion will emerge on the other side of the wormhole with wealth, "money" is no longer bound to work/labor: the wealthy have no need to generate value via work, they merely provide demand via spending their wealth.

None of these assumptions strike me as realistic, practical or desirable.

Let's examine what happens to supply chains when fiat currencies (the current form of money) crash in purchasing power (i.e. hyper-inflation or loss of trust in the currency) and the replacement currency is a gold-backed currency.

Those favoring gold-or-commodity backed currencies tend to forget that scale is a primary characteristic of "money" used in global transactions. If the gold-backed currency (or cryptocurrency) in circulation can only fund 10% of the current global volume of currency transactions--around $9 to $10 trillion dollars a day--and 90% of the new currency is locked in domestic accounts and unavailable for global transactions--then this new currency can only grease 1% of the current demand for global currency trading.

The global supply chain system crashes because there is not enough currency outside the issuing entity to grease the immense daily trade in currency for trade, debt, speculation, hedging, etc.

The whole point of a currency backed by a limited commodity is that it can't expand 10-fold overnight because that would reduce the purchasing power of the currency by the same factor.

In other words, a replacement currency must provide the same scale of not only currency in circulation but the same scale of liquidity available for global settlements of trade, debt, speculation and hedging--currently trillions of dollars per day. Anything less and the entire global trade / credit network freezes up.

Consider what happens to enterprises in supply chains who continued accepting now-worthless "old" currency. They're now bankrupt, so whatever chains they were links in are now broken. Those enterprises that prudently held off accepting any orders until the situation settled down have nothing in the pipeline, so whatever chains they were part of are also broken.

Those who decide to only accept some scarce monetary substitute are sitting on their hands, as they've been outbid by more desperate dealers / traders.

In summary, if the current "money" dissolves, global supply chains immediately dissolve, too, and expecting a relatively limited volume of replacement currency with a tiny float to ramp up 10-fold while retaining its scarcity value is delusional, as the entire point of scarcity value as the basis of a currency is destroyed if the issuance jumps up 10-fold to handle global trade needs while the quantity of the underlying commodity remains unchanged.

The real world breaks down immediately, and nobody will restock the shelves that are now bare, or refill the fuel tanks that are now empty, or restart the grid.

As for #2, the impoverished and those hanging onto "middle class status" by a thread had hope in the old system because the shelves were still full. Now that the old money has dissolved and the shelves are empty, they're not just impoverished, they have lost hope and are now angry. They are unlikely to view those who emerge from the wormhole wealthy favorably. They will likely view this as the penultimate form of unfairness and inequality and take action they reckon is appropriate, rebalancing the inequality by expropriation.

Telling them that they will now be able to turn their labor into real wealth down the road as serfs in a neofeudal arrangement is unlikely to persuade them that the New Nobility deserves its wealth and dominance.

As for the connection between the material world, productive work and money, there is no sustainable economy or society possible until these bonds are restored. The road to wealth must run through being productive in the material world rather than speculation. This has been lost in the current speculative mania and the associated civilizational psychosis that we "don't need the world, only need money" and the best way to acquire that money is speculating in assets and money. (I discuss the connections of money and work in my book Money and Work Unchained.)

In summary: the idea that modifying or replacing currency / money will solve problems of corrupted values, perverse incentives, destabilizing asymmetries of wealth and power and the civilizational psychosis of "growth of consumption and profits at any cost" is illusory. We would be wise to ponder changing far more about how we live than our monetary system, which is a manifestation of corrupted values, perverse incentives, destabilizing asymmetries and civilizational psychosis rather than their source.

Reorganizing the monetary system to serve a sustainable social order is certainly part of the overall set of solutions, but that alone is not enough to fix what's broken at deeper levels than what we use as money.

Charts of interest: wealth of the top 0.1%:



Percentage of financial assets held by the top 1%--up 42% since 1990: financial assets held by the bottom 50%, down 28%.



Labor's share of the economy: all-time lows:



Non-bank assets: hyper-financialization:



TCMDO: total credit:




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AI's Insurmountable Flaw: "Mass Regurgitation of Misinformation"

These immense hidden costs will not show up in GDP until they collapse the entire house of speculative gambling cards propping up the global economy.

I approach all AI topics with several things in mind. One is the nature of problems, which implicitly define what qualifies as solutions, and the resulting incentive to define the "problem" such that the "solution" happens to be the one we own and control.

So the "problem" AI solves is "corporate profits are too low," and so the "solution" is to replace costly human labor (made costlier by SickCare insurance and taxes on labor) with "cheaper" AI (cheaper because the full costs are hidden or subsidized).

My other lens: the economic, social and cultural consequences of AI as it is and AI hype, a topic I've explored most recently in Is AI Reversing Anti-Progress or Is It Accelerating It?, AI Data Centers Are Not the Railroads of Today and Inequality, AI and Digital Life Are Undermining Society.

Correspondent Mike Fasano recently submitted a succinct and telling summary of AI's insurmountable structural flaw: AI's inability to discern the difference between truth and falsehood, be it intentional misdirection / misinformation or errors generated by AI hallucinations, a systemic flaw which he summarized as mass regurgitation of misinformation:

*           *           *

"I read you post on AI and railroads. Here is another observation.

So far, AI has only regurgitative intelligence. It--at best--can collate and respond to queries on masses of acquired data.

But what if that data is wrong?

Who now believes the inflation or unemployment statistics? Virtually every human knows that those statistics are false.

Does AI know that?

And the problem goes much deeper.

The former editor of the New England Journal of Medicine, Marcia Angell, noted:

'It is simply no longer possible to believe much of the clinical research that is published, or to rely on the judgment of trusted physicians or authoritative medical guidelines. I take no pleasure in this conclusion, which I reached slowly and reluctantly over my two decades as an editor of the New England Journal of Medicine.'

That being the case, can we rely up AI medical advice?

And that problem goes beyond medicine. It is now generally conceded that the inability to replicate scientific studies of any type has give rise to a 'replicability crisis' in science. Can we trust 'science' that cannot be proven to be accurate?

Any adult past the age of 40 knows that the above listing of questionable information sources is just the tip of the iceberg. We live in a sea of 'official' but false data.

Railroads could transport grain to cities, minerals to factories, manufactured goods to those needing those goods. That served a public purpose.

But what is the use of the mass regurgitation of misinformation? And is anyone subtracting the losses engendered by the utilization of inaccurate information from GDP?"

*           *           *

Thank you, Mike, for clarifying an essential point: the foundation of all "value" is fact, truth, accuracy and the transparency, replicability and accountability of the processes validating fact, truth, accuracy. If AI is incapable by its nature of validating all these, it's worse than useless--it's destructive on a system-wide scale.

The evidence of the systemic destruction is already overwhelming. Bogus "scientific papers" are already proliferating at an accelerating rate, making the task of identifying incorrect and fabricated (i.e. hallucinated by AI) data, processes and conclusions impossible due to the scale of the misinformation and the difficulty of identifying the misinformation buried inside superficially legitimate papers.

With both scientific and economic data and analysis now untrustworthy without exceedingly expensive, time-consuming vetting by human experts, where does this leave the "AI will automatically generate superabundance" hype? What's already clear--but inconvenient--is the mass adoption of inherently flawed AI is undermining the foundations of "value," however we wish to define it.

And as Mike also points out, this undermining of value has a financial consequence. We all know Gross Domestic Product (GDP) is a superficial, distorting measure of "prosperity," and the structural distortions of GDP (Waste Is Growth) are amplified by the hidden destruction of transparency, replicability and accountability by AI slop, whether intentional (malicious, deceptive, fraudulent) or as the unavoidable consequence of AI's core flaw.

These immense hidden costs will not show up in GDP until they collapse the entire house of speculative gambling cards propping up the global economy. Only then will the structural damage being wrought by our increasing reliance on tools that cannot discern the difference between fact and fantasy / fabrication / hallucination become visible.



And by then, of course, the damage will be irreversible without extraordinary costs and sacrifices, sacrifices few will volunteer to bear.

Remember that AI isn't "thinking," "understanding" or "making judgments": AI tools are engines of linguistic automation, not engines of understanding. The simulation is not the thing simulated. AI is not a "mind," it is a prompt and a probability distribution.

AI and human intelligence are drastically different--here's how.




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Is AI Reversing Anti-Progress or Is It Accelerating It?

Perhaps it's time to admit that AI hype is self-serving propaganda, and that we're actually living in a Philip K. Dick-type dystopia.

Consider the depth and consequences of the widening gap between these headlines. One the one hand, we're awash in articles proclaiming the immense value being generated by AI and the promise of future value that's beyond our imagination. But if we set aside the sci-fi promises of AI discovering miracle drugs that cure every disease and focus on what AI is actually being used for, it boils down to 1) increasing corporate revenues and 2) increasing corporate profits by reducing costs.

That's it. There is nothing else except clickbait headlines intended to create a PR-propaganda illusion that fantastic advances are just around the corner, just you wait.

But in the real world, AI is solely focused on increasing corporate profits via streamlining workflows and increasing productivity. There are hundreds of headlines along these lines: How AI is reshaping workflows and redefining jobs (mitsloan.mit.edu)

Here's the short version: Corporations are in a frenzy to use AI to jack up revenues via extraction rather than creating value, and boosting profits by slashing payrolls and costs. This is evident in headlines such as this:

Why are US consumers so angry? It's not just high prices. (theguardian.com)
First, her longtime vet, now part of a national chain, overcharged her $500 for her dog's teeth cleaning and didn't issue a promised refund. Then, her big box supermarket promoted a coupon on its app that wasn't applied at the checkout, costing her $30 and a trip back to the store. Finally, her health insurance company rejected her son's $1100 dental bill that she had been told would be 50% covered, despite protracted haggling.

"It's like Whac-A-Mole," the mother of two said. "You finish one and up pops another one."

"It feels like a war on consumers," said Sally Greenberg, the executive director of the National Consumers League, a 125-year-old consumer advocacy group. "Households are being hit by "a tsunami of fees and hidden charges and tricks and traps," she said.

Peter Fader, a Wharton School marketing professor, said, "But not only does service just suck, consumers are starting to realize that a lot of the cool data and technology is being used against them."

This isn't the FantasyLand story of corporations "creating value," it's the ugly real-world story of corporations increasing profits by controlling markets to extract more revenues while reducing value. In my book Investing In Revolution I explain that once companies eliminate real competition via monopoly, cartels or regulatory capture (deceptively called "market forces"), they become privatized totalitarian structures that corral consumers so they can be exploited to maximize extraction / profits without pushback from either the consumers or a controlled-by-the-highest-bidder state that enables privatized totalitarianism because a trickle of the trillions in profits flows to state insiders.

The ceaseless reduction of value and the expansion of data collection technologies to maximize extractive profiteering has a name: Anti-Progress, for declining quality and value coupled with higher costs and reduced alternatives (i.e. real competition) is not Progress, though it's ceaselessly touted as "Progress" by the corporations feasting on Anti-Progress to maximize profits by any means available.

Streamlining workflows and increasing productivity are not devoted to improving the quality of life of the populace or benefiting the shared interests of society; the single-minded goal is using AI to maximize profits via extraction. The difference between a totalitarian state (no competition) and totalitarian monopolies and cartels (no competition) is, well, the difference between privatized extraction and state extraction.

In the US, we have the worst of both worlds: an extractive state that funds and enables extractive privately owned corporations. Ask yourself an honest question--yes, that's difficult in a system that incentivizes artifice and self-serving deception: what exactly has AI done to improve real-world life in terms of quality and cost?

Even what's touted turns out to be extractive, distorting Anti-Progress. That AI is now our new best friend is not Progress, and neither is the core impossibility of trusting AI "answers" to be useful.

The core problem isn't just the illusion of "Progress" used to cover exploitive extraction; it's that AI is deceptive by its very nature, as it implicitly presents a probability distribution as fact, truth, judgment, thinking and understanding, when it cannot possibly be any of these.

This article explains this clearly and succinctly:

AI and human intelligence are drastically different--here's how. (scientificamerican.com)
The deeper issue is that the model cannot know when it is "hallucinating" because it cannot represent truth in the first place. It cannot form beliefs, revise them or check its output against the world. It cannot distinguish a reliable claim from an unreliable one except by analogy to prior linguistic patterns. In short, it cannot do what judgment is fundamentally for.

People are already using these systems in contexts in which it is necessary to distinguish between plausibility and truth, such as law, medicine and psychology. A model can generate a paragraph that sounds like a diagnosis, a legal analysis or a moral argument. But sound is not substance. The simulation is not the thing simulated.

They are engines of linguistic automation, not engines of understanding. They excel at drafting, summarizing, recombining and exploring ideas. But when we ask them to judge, we unintentionally redefine judgment--shifting it from a relation between a mind and the world to one between a prompt and a probability distribution.

Remember that smoothness is not insight, and eloquence is not evidence of understanding.

Here's a short list of the many examples of AI generating Anti-Progress on multiple fronts, including but not limited to extractive exploitation:

In the USA, the level of vigilance the average person has to maintain to avoid getting ripped off extracts its own kind of price -- one most analysis of dynamic pricing doesn't pay any attention to. (Tim Wu)

I think the Boomer/Gen Z discourse boils down to one thing and one thing alone: The America that Boomers grew up in put American families and American workers first. The America that Gen Z is growing up in puts literally everything else first.

We need a new regulatory paradigm to contain AI and prevent institutional collapse. A quick explanation.

The Record Divide Between Corporate Profits and Worker Pay: Labor's share of economic output just hit an all-time low, while the profit share hit a near record. It helps explain why consumers feel so glum. (wsj.com)

'It's never enough': young Americans struggle to build financial independence as cost of living spikes/ A difficult job market and rising costs are making it harder for young adults to enter adulthood.

Lastly, consider this question: How can we tell good AI from bad? (ft.com)

Short answer: we can't, and the gap between being able to ascertain the good from the bad is widening at an accelerating pace.

This is what we've been seeing with every company we work with. Try justifying spending 100k on token spend when only 18k even makes it to a stable product feature. Very interesting data across 2,444 companies. 82% of tokens are spent on AI-generated bugs, rework and review friction.



Please note what's missing from this list of AI concerns: "AI is improving my quality of life, reducing complexity and costs, and eliminating AI slop and extractive corporate exploitation at such a dizzying pace I wish it would slow down the vast improvements in my life so I can catch my breath."

Is AI Reversing Anti-Progress or Is It Accelerating It? The answer is it's accelerating Anti-Progress in every nook and cranny of the economy, society and culture. Perhaps it's time to admit that AI hype is self-serving propaganda, and that we're actually living in a Philip K. Dick-type dystopia in which we're constantly told AI will cure the diseases it's creating at some point in the future, while it generates more diseases at an ever-accelerating pace.


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