Tech Tycoons have actually Got the Economics of AI Wrong

Even as financial development was just taking off, some economic experts were already cynical. Coal, Stanley Jevons in 1865, is „the mainspring of modern-day product civilisation”. Yet it was finite and would quickly go out. Although more might be discovered by digging deeper, it would be progressively expensive to extract and these greater expenses would lower the competitiveness of Britain’s manufacturers. After all, in other nations the black fuel was still in sight of daytime. Efficiency gains-using less coal to produce the very same quantity of stuff-would not save the nation. Indeed, cleverer use of minimal resources would merely provide a reward to burn a lot more coal, which would, paradoxically, result in an even quicker use of British reserves. There was no escape, the Victorian economist thought. Coal would be exhausted and the country was likely to „agreement to her previous littleness”.

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This article appeared in the Finance & economics area of the print edition under the heading „Rocked by DeepSeek”

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Tech tycoons have got the economics of AI incorrect

From the February 1st 2025 edition

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