Tech Tycoons have actually Got the Economics of AI Wrong

Even as financial growth was just removing, some economic experts were currently downhearted. Coal, wrote William Stanley Jevons in 1865, is “the mainspring of modern-day product civilisation”. Yet it was limited and would quickly run out. Although more could be discovered by digging deeper, it would be increasingly costly to extract and these greater expenses would minimize the competitiveness of Britain’s manufacturers. After all, in other countries the black fuel was still in sight of daylight. Efficiency gains-using less coal to produce the exact same quantity of stuff-would not save the country. Indeed, cleverer usage of limited resources would merely provide an incentive to burn even more coal, which would, paradoxically, cause an even quicker use of British reserves. There was no escape, the Victorian financial expert believed. Coal would be tired and the country was likely to “agreement to her former littleness”.

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This post appeared in the Finance & economics section of the print edition under the heading “Rocked by DeepSeek”

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Tech magnates have got the economics of AI wrong

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