Tech Tycoons have actually Got the Economics of AI Wrong

Even as financial growth was simply taking off, some financial experts were already cynical. Coal, composed William Stanley Jevons in 1865, is “the mainspring of modern-day material civilisation”. Yet it was limited and would quickly go out. Although more might be found by digging deeper, it would be increasingly expensive to extract and these higher costs would decrease the competitiveness of Britain’s producers. After all, in other countries the black fuel was still in sight of daytime. Efficiency gains-using less coal to produce the very same amount of stuff-would not save the nation. Indeed, cleverer use of restricted resources would simply supply a reward to burn a lot more coal, which would, paradoxically, lead to an even much faster use of British reserves. There was no escape, the Victorian economic expert thought. Coal would be tired and the country was most likely to “contract to her previous 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 tycoons have actually got the economics of AI wrong

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