Apr 2, 2023Liked by Benn Stancil

Historically economists have also been very bad at actually predicting the trends in technology. And if we really look at history of technology, it has done mainly two things:

- made high skill people more effective

- made low skill people, at times, indistinguishable from high skilled

This has basically one major implication:

- the supply of labour is about to expand dramatically for every section of the job pyramid. There will be more low skill lawyers (offering wider range of services) and there will be more high skilled lawyers offering their services without the backbone of a large brand

As someone who has more than 100 McKinsey consultants in his professional network, the word is that there is no "high quality" knowledge. Instead, there is a network of high ambitious achievers who hire their own, but mainly recycle the same frameworks - something that a boutique firm with much less resources can do as well.

The real question LLMs pose is what does any of this have to do with prices. Prices of labor. Prices of technology, prices of start-ups, prices of capital

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The marginal cost of LLM inference is many many orders of magnitude lower than human labor, and unlike human labor is nonrivalrous -- i.e., if I use an LLM it doesn't mean someone else can't also use it at the same time. You could argue that datacenter capacity is a real constraint, but it's much easier to grow the supply of datacenter capacity than to grow the supply of human labor. Because of those fundamental differences, I'm not so sure how useful the discipline of labor economics will be when applied to this new generation of software.

I think LLMs will revolutionize the software industry, and agree with the wider sentiment that this is the equivalent of the industrial revolution for knowledge work. Building software today is insanely expensive. There's SO MUCH terrible software out there because building high quality software is such a labor intensive endeavor and the supply of humans who can do it well is minuscule relative to demand. The economic implications of "good software is relatively cheap to build" are enormous.

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"if Bard doesn’t harvest us to be batteries for Google’s data centers."

Hysterical 🤣.. but with a name like Bard, I doubt it is a threat. 😬😬

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Mar 31, 2023Liked by Benn Stancil

It seems like every major technology advancement has all us humans fretting about being replaced by machines. Thinking this way grossly underestimates millions of years of evolution and the masterpiece that is the human mind. Rather than "replace" us, technology allows us to do what we need to do faster so we can work on other, usually higher valued things. This may mean that some low skilled jobs may be eventually automated away, but is ordering a burger from a kiosk versus a human so bad after all?

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"ChatGPT might already be a halfway decent lawyer"

Talking to an AI lawyer would be crazy. But I do wonder if people are going to use AI as their lawyer.

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the real non-theoretical question here is how does everyone feel about IRS hiring 87,000 new agents...

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