AI and the Delusions of Increasing Productivity

Most of AI isn't productive, it's just another form of consumption.

Like GDP (Gross Domestic Product), economic Productivity is an unquenchable spring of delusions, delusions being pushed to new heights of delirium by promises of endless leaps of productivity as AI is deployed in every nook and cranny of the global economy.

Let's start with what Productivity measures. Like GDP, Productivity distills everything in the world down to money: the cost of all inputs (labor, capital, resources) and the monetary value of the output (goods and services). If the output goes up while the input costs remain the same or decline, Productivity is going up: we're producing more with the same basket of inputs (work, capital, etc.).

On the surface, this appears commonsensical, but as with GDP, AI and many other sources of confusion and delusion, what matters is what's not being measured or even recognized. Exhibit #1 in the cavalcade of delusion is Corporate America's sleight of hand way of boosting Productivity by offloading work onto consumers and households.

It's not that Corporate America actually generated more goods and services with the same inputs: what they did was transfer work they should have done to consumers and households. Consumers and households are now burdened with unending shadow work dealing with Corporate America's rubbish products and services, doing unpaid work to fix or maintain products and services that break down or don't work reliably and are "black boxes," i.e. unrepairable without "customer service," which has degraded to the point of parody.

We all perform this unpaid shadow work every day: pump our own gasoline, scan our own groceries, and waste hours dealing with kludgy services and maddeningly dysfunctional AI "customer service" chatbots and 3-item menu choices that don't have an option for the problem we have-- a problem that should be the company's responsibility, but it's been dumped on us.

If we measured the billions of dollars in unpaid shadow work forced on consumers and households by state agencies and Corporate America, Productivity would be falling off a cliff. But that doesn't support the self-serving claims that the casino-economy is doing great because corporate profits are rising.

What's left out of the glowing claims is the corporate profits come not from producing quality goods and services but from dumping all the consequences of shoddy products and services on consumers and households.

Exhibit #2 is the collapse of product durability and the quality of services. Durability isn't measured in the the calculations of Productivity, so the fact that appliances that routinely lasted 30-40 years now fail in 3-4 years is not even recognized, much less measured.

The same is true of the decline in the quality and utility of services, and the soaring costs of repair. Recall that "output" is a dollar amount. So when we take our out-of-the-paltry-one-year-warranty vehicle in for a $3,400 repair that used to cost $1,400, since the parts and labor didn't change in any material way, the higher price boosts both GDP and Productivity: woohoo, 4 hours of labor and a handful of parts now generated "more output" and "higher GDP."

You see the insanity here: the reason why we're paying higher prices is the quality of the products and services has cratered, but this is measured as "wonderful" because GDP goes up and Productivity is higher, too, since the input costs went up less than the value of the output.

Monopolies and cartels thus boost the wondrously wonderful trifecta: corporate profits, GDP and Productivity all go up as quality goes down and costs and risks are transferred to hapless consumers and households, who have no other choice in a fake "marketplace" of state and corporate monopolies.

Exhibit #3 is the self-serving hype about AI automating limitless gains in Productivity, which is shorthand for limitless gains in corporate profits. This too is delusional for a number of reasons:

1. Most of AI isn't productive, it's just another form of consumption. Conversing with a chatbot, having AI compose another worthless term paper or conjure another worthless song or graphic image--these are all consumption, not productive applications of capital. They're superfluous forms of consumption that are the direct result of AI's true costs being subsidized. If everyone had to pay the actual costs of running these stupendously costly operations, these superfluous forms of consumption would plummet accordingly.

2. There is precious little evidence that AI is actually improving real productivity. As with all casino-economy hype, outliers are touted as examples of AI's transformational magic: AI found a math proof, AI conjured a new virus, etc. That these are A) atypical and B) examples of how AI can be used for malicious purposes just as easily as it can for good is ignored.

How will Productivity be affected when a rogue player uses AI to conjure a super-virus? Nobody dares ask this because it might tarnish the casino-economy hype that AI will make us all wealthy beyond measure.

The problem with AI will boost productivity everywhere claim is a consequential share of all "work" is needless bureaucratic churn created not by actual need but by the apparently permanent abundance of huge surpluses that can be squandered on make-work, churn and profiteering.

So AI will automate worthless churn, marketing and make-work. Is this actually boosting the quality, durability and real value of the economy's output, or is it all just an illusion of "value" created by endless surpluses of cash to squander?



The problem is the surpluses are declining and being replaced by borrowed money. Debt is another input that is glossed over in calculations of GDP and Productivity.

Last but not least, there is evidence that AI's initial illusion of increasing productivity and lowering costs transmogrifies into lower productivity and higher costs as maintenance of complex systems kicks in. The kludgy nature of AI's "almost good enough" magic only becomes visible as all the "not quite good enough" starts piling up and breaking down complex systems.

Economics is akin to an ancient cult glorifying a temple of fabricated gods. The priesthood (naturally) claims extraordinary powers that can only be wielded by those with temple-granted credentials. That the cult is nothing more than a collection of beliefs claiming to be "science" is cloaked by measures that leave out everything of true value and consequence to serve the illusion that these beliefs are "how the world works."

GDP and Productivity are the functional equivalents of waving dead chickens while dancing the humba-humba around the campfire at midnight, delusional claims of "how the world works" that set up a world-shattering encounter when the real world doesn't obey the claims.

Economics measures what's easy to measure, not what matters, and eventually that will matter more than the temple's believers can possibly imagine.

When economists start measuring durability, the quality of services, unpaid shadow-work performed by consumers and households that should be done by the companies providing the services, the perverse profiteering of monopolies, state and private, and the true costs over time of fixing AI's "almost good enough" magic, then their cultish claims to being "science" might have a shred of credibility.

Until then, prepare for impact:



The eventual consequence of AI's "almost good enough" magic:




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I'm Asking You to Support My Work This Month

Of Two Minds serves this purpose: taking control of and improving our own quality of life and security.

Once a year I ask you to support my work. In the past, I've struck a humorous note--rattling the begging bowl. This year feels different. The veneer of normalcy is peeling off faster than it can be glued back on, and this decoherence is accelerating, which is why I'm writing a series for subscribers entitled The Revolution No One Sees Coming.

Of Two Minds content ranges over so many fields that it doesn't fit into any one conventional category. But beneath the surface jumble it's always about solutions, macro and personal/household, solutions derived from understanding the dynamics at work beneath the conventional surface explanations, all of which ultimately serve this purpose: taking control of and improving our own quality of life and security.

I am especially interested in social evolution and change, as this process is neither transparent nor predictable. Our era is one of vast wealth-power inequality, resource depletion and technological changes (AI, social media, etc.), dynamics that are changing the global order at every scale, which is why I focus on navigating instability via self-reliance, avoiding burnout / Ultra-Processed Life, and investing in ourselves and the revolution that no one sees coming.

The Revolution No One Sees Coming will not just be a series of external events, it will be personal, as each of us will face situations we didn't choose whose novelty and scale may exceed our previous experience. History is full of changes no one thought possible a few years earlier. No one else is writing about it like I am, so a subscription--which costs the same as a few sushi--is a unique value. Thank you for supporting my work.

I have always felt that if even one single idea presented here changes your life in a positive way, then the subscription will pay for itself many times over in the advance of your security, self-reliance and quality of life. Thank you for your readership, and I greatly appreciate your financial support via any of these methods:

The subscription is $7/month or an annual payment of $70/year. At readers' request, there is also an "extra-generous subscription" option of $10/month.

1. Subscribe to my Substack at the $7/month / $70 annual subscription or the $200 option.

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The Joyless Pantomime of Optimizing Ennui

The joyless pantomime of optimizing our alienation is not a substitute for authentic fulfillment.

We all know that geopolitics, the stock market, AI, the unemployment rate and all the rest of what's presented as "explaining" everything is "important," but all these analytic abstractions ignore what we actually experience. This divide between what we're told we should be experiencing and what we are actually experiencing is what I call the politics of experience, a term coined by R.D. Laing in the 1960s.

The basic idea is that there's a widening gulf between what we actually experience and what we're told we should be experiencing, and this disconnect is inescapably deranging. Since the entire realm we inhabit is telling us everything's great and the sky's the limit, we pantomime this same claim as if we're actually experiencing authentic joy because everyone else seems to believe it.

If we confess that we don't feel everything's great and what we actually feel is a complete disconnect from everything we're supposed to be feeling, then we risk an internal and social divide that threatens our entire status quo: if we recognize it's all a joyless pantomime, then what?

But everyone else doesn't actually believe it, either; they're just going through the motions in the hope that the joyless pantomime will keep everything they're afraid of losing glued together. But if we've substituted an optimized-for-optimization pantomime for authentic experience, then we've already lost ourselves and our ability to discern the hollowness of the civilizational psychosis that claims a life of ennui and alienation is "living our best lives."

The gulf between what we're told is joyful and wondrously promising and our lived experience is now so wide that the cracks are showing. Consider these excerpts from recent articles:

The Strange Feeling So Many Adults Can't Explain: The quiet epidemic not enough people are talking about. (medium.com)

Now I hear the same sentence from people all the time. "Nothing is wrong, I just don't really get excited about anything anymore."

They're not saying they're depressed. They're still working. Paying bills. Taking care of their kids. Walking the dog. Going to the gym. Life keeps moving. But the excitement isn't the same. That spark that used to make ordinary things feel meaningful doesn't seem to show up anymore.

What's strange is how many people seem to be feeling it at the exact same time. Spend a few minutes on TikTok, Reddit, or Instagram, and you'll find thousands of comments from people describing the exact same experience. Different ages. Different careers. Different backgrounds. But they're all asking a similar question. "When did I stop looking forward to life?"

Why does everything feel so joyless? Welcome to the age of decadence without pleasure: Decadence in our era comes in technologically mediated forms, emptied of desire and obsessed with self-optimization. (theguardian.com)

AI marks a triumph of artifice more sweeping than the old decadents could have imagined. Yet far from bolstering our capacity for perceptual intensity, AI presents new threats to both. Its productions are eerily hollow, with no felt experience, embodiment or sensation behind them. AI is the pleasureless decadence machine.

"There is no pleasure or pain for an AI, no skin in the game," the philosopher Carissa Veliz writes in her recent book Prophecy. As a result, an AI "cannot care, and therefore cannot value." Without some felt relation to pleasure and pain, judgments of value and taste become abstract and bloodless.

Art, sex, nature: why is everything sold to us as a means to an end, rather than an end in itself? How a reductive worldview is stripping meaning from our most valued activities. (theguardian.com)

I have seen countless other examples of all the things that are good in life being promoted not for their own sake but for the material benefits they bring. This instrumentalization has become normalized so insidiously that we don't even notice that it is odd, let alone wrong. Nor do we seem to be aware of quite how pervasive it is. Yet its effects are profound, leading us to lose sight again and again of what is truly of value in life.

Our autonomous agency has increasingly been expressed through our status as consumers. Freedom is above all the choice of how to spend our money, with the promise that everything we need can be obtained in exchange for cash. The consumer mindset has affected how we relate to everything, not just the things we buy.

The result is that the world has become essentially transactional, meaning that everything is an instrument for getting something else. It is no coincidence that dating apps give the impression that we are shopping for partners because we approach even relationships with the consumer framing.

Combine an inflated belief in personal autonomy, a transactional consumer mentality and a reductionist attitude to how things work, and it is inevitable that we treat the world as a collection of resources we can plunder to promote our own well-being. The tragedy is that when we do so, we neglect rather than serve our deepest needs.

The cornucopian fantasy of AI generating super-abundance is the joyless pantomime taken to the highest level of civilizational psychosis. The more we strive to optimize ourselves and everything around us, the more we rely on metrics as guides to "living our best lives," the more we strive to work harder and work smarter in the hopes that more stuff and more transactions will finally become fulfilling, the farther we drift from ourselves and our own experience.

The joyless pantomime of optimizing our alienation is not a substitute for authentic fulfillment. The pantomime--going through the motions of finding fake fulfillment in ultra-processed products, experiences and optimizations--is not just joyless, it drains our life force, leaving us in a depleted state of ennui, burned out and wondering why we don't feel the fulfillment we're supposed to be feeling in our hyper-optimized existence.

We don't need therapy and supplements, we need out.




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The Joys and Tragedies of Naivete

Our naivete is being exploited so ruthlessly and with such abandon that the golden age of the Big Con is consuming itself.

Naivete is interesting because it's so easily confused with confidence, native optimism, youthful enthusiasm, and a host of delusions, including mistaking idealized fantasies and fairy tales as templates for the real world. In a culture that prides itself on not being a chump, to be called naive is an accusation: don't be naive means don't be an easily conned chump.

In contrast, being confident, optimistic and filled with youthful enthusiasm are praised as the core of American Practicality, Idealism and Vigor, i.e. the can-do spirit. That naivete lends itself to youthful enthusiasm, sunny optimism and can-do confidence is rarely remarked upon.

So what is naivete other than credulity? It's a willingness to trust leaders, institutions and mythologies without running them through common-sensically skeptical filters, and a belief that everything will work out just fine regardless of what happens if we just keep working hard and working smart.

The difference between a willingness to trust leaders, institutions and mythologies, sunny optimism and youthful enthusiasm and naively mistaking self-serving fantasies and fairy tales for the real world is, well, there isn't any. Believing that an unending stream of patently transparent self-serving fairy tales accurately reflect "the real world" is the pinnacle of naivete, and that describes the entire American society, culture and economy: this is the golden age of the Big Con.

Which brings us to Herman Melville's under-appreciated classic, The Confidence-Man. Why read a book from 1857 which flopped so badly as commercial literature that Melville stopped writing and ended his career as a customs official? Because this book masterfully explores the entire nature of trust, confidence and cons. Though the setting is a riverboat on the Mississippi River just before the U.S. exploded into Civil War, its insights cross cultural boundaries.

This is not an easy book to read for several reasons. First, it is undoubtedly one of the first "post-modern" novels which breaks from traditional narrative storytelling. ( Another example: Dostoevsky's Notes From the Underground.) The Confidence-Man is a collection of 45 conversations between various people on the riverboat--beggars, absurdly dressed frontiersmen, sickly misers, shysters, patent medicine hucksters, veterans (of the Mexican-American War) and the "hero" in the latter part of the book, the Cosmopolitan.

In typical Melville fashion, you also get asides--directly to the reader, in several cases, as if Melville felt the need to address issues of fiction outside the actual form of his novel. The lack of structure, action and conclusion make this a post-modern type book, but if you read each conversation as a separate story, then it starts to make more sense.

For what ties the book together is not a story but a theme: the nature of trust and confidence. In a very sly way, Melville shows how a variety of cons are worked, as the absolutely distrustful are slowly but surely convinced to do exactly what they vowed not to do: buy the "herbal" patent medicine, buy shares in a bogus stock venture, or donate cash to a suspect "charity."

In other chapters, it seems like the con artist is either stopped in his tracks or is conned himself. Since the book is mostly conversations, we are left to our own conclusions; there is no authorial voice wrapping up each chapter with a neatly stated ending. This elliptical structure conveys the ambiguous nature of trust; we don't want to be taken, but confidence is also necessary for any business to be transacted. To trust no one is to be entirely isolated.

Melville also raises the question: is it always a bad thing to be conned? The sickly man seems to be improved by his purchase of the worthless herbal remedy, and the donor conned out of his cash for the bogus charity also seems to feel better about himself and life. The ornery frontiersman who's been conned by lazy helpers softens up enough to trust the smooth-talking employment agency owner. Is that a terrible thing, to trust despite a history of being burned?

The ambiguous nature of the bonds of trust is also explored. We think the Cosmopolitan is a con-man, but when he convinces a fellow passenger to part with a heavy sum, he returns it, just to prove a point. Is that a continuance of the con, or is he actually trustworthy?

The book is also an exploration of a peculiarly American task: sorting out who to trust in a multicultural non-traditional society of highly diverse and highly mobile citizens. In a traditional society, things operate in rote ways; young people follow in their parents' traditional roles, money is made and lent according to unchanging standards, and faith/tradition guides transactions such as marriage and business along well-worn pathways.

But in America, none of this structure is available. Even in Melville's day, America was a polyglot culture on the move; you had to decide who to trust based on their dress, manner and speech/pitch. The con, of course, works on precisely this necessity to rely on one's senses and rationality rather than a traditional network of trusted people and methods. So the con man dresses well and has a good story, and an answer for every doubt.



Our naivete is being exploited so ruthlessly and with such abandon that the golden age of the Big Con is consuming itself. Delusions are now the norm, as if our unhinged optimism that everything will turn out just fine as long as we believe in Technology and Finance, for that will be enough to stem the tsunami of consequences building up beneath the surface euphoria of stocks and AI making us all wealthy beyond measure.

These are the joys of naivete. The tragedies are still over the horizon, a gathering storm we are unprepared for.


NEW PODCAST: We Don't Have Capitalism Anymore--We Have Privatized Totalitarianism (60 minutes)(host Daniel H.)


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Get the Flock Out of Here

The government gets the privately collected data and in return dismantles or disables the guardrails that once protected the public from state and private-sector encroachments on privacy.

One of the core traits of a 1984-type totalitarian dystopia is 24/7 surveillance of every prisoner, oops, I mean citizen. Surveillance collects the data that leverages the tools of control: without surveillance, the structures of control do not have the data needed to monitor, track and control the populace in a profitably fine-grained manner.

As I have endeavored to explain, surveillance is no longer the unique purview of the central state; it has been fully privatized for profit by Big Tech and Corporate America, creating a vast, sprawling structure of control I call Privatized Totalitarianism as the mechanisms of data collection and profiting from this data collection are privately owned but the data is for sale to anyone, including government agencies of every stripe.

We thus have a hybrid mix of public and private control structures. The government (with a monopoly on force and declaring what's legal) has its systems and tools to collect data on the citizenry, and corporations (platforms, monopolies, quasi-monopolies, cartels) have their privately owned and operated "black box" systems and tools to collect data on the citizenry.

Both profit when the privately harvested data is shared with the government. The government gets the privately collected data and in return dismantles or disables the guardrails that once protected the public from state and private-sector encroachments on privacy.

In a centralized system in which power and wealth are concentrated in the hands of the few, everyone in power benefits from this cozy marriage of corporate and state exploitation of data collected by surveillance and whatever is conducted or transacted online, which together increasingly includes every aspect of daily life.

Whatever is digitized can be collected and sold, whatever is surveilled "for our own good" can be harvested and sold, and whatever is sold becomes a means of control.

When it comes to data collection, the more data collected, the greater the profits and the means of control. It's important to note here that the control structures of Privatized Totalitarianism differ from the rigid enforcement of tradition state-totalitarianism, where no dissent is allowed.

In the marriage of self-serving State and Privatized Totalitarianism, a narrow band of ultra-processed, i.e. carefully curated and controlled "debate" and "dissent" is not just allowed, it's constantly lauded as "proof" of our "free markets" and "liberty", in the same way a starchy, grease-soaked, heavily sweetened goo dyed orange is lauded as a "healthy veggie snack."

Ultra-Processed Life (book)

In both cases, the fake facsimile is highly profitable but destructive over the long term. The individual who falls prey to the ultra-processed snack become ill, and the society that falls prey to the fake facsimile of a "marketplace of ideas freely debated" also weakens to the point of collapse.

In other words, as long as the public dialog remains corralled within the sterile, dead-end "debates" of obsolete, divisive and distracting cliches--left vs. right, socialist vs capitalist, blah-blah-blah--then the centralized concentrations of power and wealth can enjoy watching the peasantry toil away from their castles on the hill, amused by how easy it is to maintain the one-sided status quo with a managed spectrum of phony "debate" and 24/7 data collection and surveillance--all sold as "for our own good."


Who Will Solve Our Real Problem--The US is a Neofeudal Autocracy

So cameras on every lightpole--for our own good. Cameras above every doorway: for our own good. Drones monitoring traffic: for our own good. Data collected by platforms, Big Box store cameras in the parking lots, and so on: all for our own good.

All to serve you better. Indeed. To serve humans. This reminds us of the classic 1962 episode of The Twilight Zone TV series To Serve Man, in which an alien race visits Earth claiming to bring "peace and prosperity" via their program "to serve man", which turns out to be a plan to harvest humans as edibles.



We're being consumed, too, by Privatized Totalitarianism, along with our democracy and liberty. Consider the digitization-enabled surveillance of vehicles I touched upon in Driving Big Brother.

As a thought experiment, let's go through getting in your car to attend a community meeting. Our new car is a wonder of technology. Yowza! Unbeknownst to us, much of this digital technology is not visible. Neither are the cameras, drones, etc.

While fiddling with the "entertainment"/audio features, we miss our signal turn, and since there's no other traffic around, we brake hard, pull a quick U-turn and exceed the speed limit to make the meeting on time. The meeting is being held by the Stop Surveillance Now Coalition (SSNC), and it's being held at a public space rented for the evening. We're attending because we're concerned about the steady erosion of privacy and the increasing potential for abuses of power as all this data is sold / distributed without our knowledge or consent.

When one speaker mentions the recent spate of privately installed and operated security cameras being destroyed in "monkey-wrench" fashion, the audience cheers.

The following day, our auto insurance is canceled, the IRS notifies us we're being audited for the first time in our lives, and the FBI pays us a visit regarding sedition, destruction of private property and various other criminal activities. Hmm, why this sudden truckload of punishments, public and private, being heaped on us?

It's all legal, because remember, in a Neofeudal Autocracy, what's moral is what's legal, and what's legal is for sale (per analyst Simons Chase) So it's not just legal, it's also moral and therefore righteous, because, heh, it's for our own good. To serve humans. (Yum, you look like a tasty snack!)

Then there's the marketing onslaught that clutters our inbox as soon as the sun rises. Oh, the irony. Here's an advert for a device that jams Bluetooth, hmm, I wonder why a retailer suddenly sent this to me? Here's an advert from a tax service that specializes in dealing with IRS audits. Well, that's certainly timely, eh?

Experts warn 2.2 million cars could be at risk of hijacking via Bluetooth (via John D.)

Correspondent Christopher M. left a succinct public comment on Medium that describes a key dynamic in the seemingly hopeless task of limiting not just data harvesting and surveillance but the distribution of the data being harvested to the highest bidders in the auction of Privatized Totalitarianism:

"There's no organized, sustaining, citizen movement powerful enough to push back against the relentless "gravitational pull" of government apparatchiks and corporate interests to monitor and direct every aspect of our lives."

Well said, Christopher, thank you. The boiled-frog analogy comes to mind, along with the herd milling around in the corral, each believing they're free-range.

As I noted in AI Is the Apex of Ultra-Processed Life,

Privatized totalitarianism expands without limits: our data is harvested and sold (you "opted in" by using the platform), we're banned or shadow-banned by black-box-algorithmic private monopolies (you violated the shape-shifting "community standards" that have remarkable overlap with whatever the government is presenting as "the correct choice"), and all this is presented--cue the laugh track--as "free market capitalism" and "individual choice" when it's actually a Kafkaesque facade masking the reality that the entire system is the opposite of what's being sold: it's not authentic, it's fake. It's not progress, it's Anti-Progress. It's not beneficial to us, it's malefic, and it's not actual agency-liberty, it's a profitable simulation that we sense but can't quite identify because it's everywhere.

So here's the corral labeled "free and open debate." Just don't stray or you'll find yourself shadow-banned or worse. Not by the government--they have their own means (welcome to Digital Siberia)--but by the Privatized Totalitarianism of privately owned and operated corporate platforms whose extraction and exploitation is legal--and for sale to the highest bidder.



One wonders if we have the collective will to say Get the Flock Out of Here. Sadly, even living on a remote island isn't a solution:




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