alt Hacker News> Won't super power AI tools allow companies to do more with the same number of people? Don't you think a smarter way to run a business is to capture more of the market if you have the resources to do so?
It is possible to have excess productivity. AI allows an existing labour pool to rapidly surpass necessary productivity levels for the existing demand.
IE, let's say I live in a small town and I open a machine shop. Should I hire every mechanic that walks in the door, forever? No, absolutely not; there is an optimal number of mechanics to hire for the demand for services.
If somehow a tool comes to exist that doubles the productivity of mechanics then laying off half the mechanics is next.
Replies
That's not what productivity means. You're thinking about output capacity
You can aim to expand your addressable markets. A small town is a small market. Open a second location in a nearby town. Lower profit margins to undercut competition.
The small town constraint is a bit artificial to this problem isn't it?
If you operate a machine shop in a large urban area, have competitors, and access to much improved low cost tooling, would you:
a) lay off a bunch of workers, or b) lower your prices and capture more orders?
Same thing with accounting firms or marketers or business consultants.
>It is possible to have excess productivity? Isn't this what happened with the tech hiring during Covid? And also many of the big tech companies were hiring people just to make sure their competitors didn't have them?
Machinists work at a machine shop.
> It is possible to have excess productivity.
The most productive places in the world are also those with the highest incomes and wealth generation. "Excess productivity" is either temporary or a sector-specific phenomenon, it doesn't apply to society as a whole.