00:01:56.420And Bruce wrote a book about the founding of EFF called The Hacker Crackdown.
00:02:02.460Basically, the year EFF got started. And I read that book and spent the next 10 years following EFF's work and being really excited about it. And 10 years later, found myself working for them.
00:02:11.880Yeah, no, Bruce Sterling, he co-wrote that book with William Gibson, The Difference Engine, didn't he?
00:02:16.660Yeah, The Difference Engine. That's right. Bruce is my daughter's godfather.
00:06:10.080You put seven figures into warehouse automation, you want to work those machines as hard as you can, which means that the people have got to be worked at the edge of their endurance and capability, which means that eventually they're going to miss a stitch and they're going to get squashed by a machine.
00:06:26.980and how, I mean, you're actually, you're reminding me of something that a previous
00:06:31.420guest, Susanna Glickman, said about AI. She said, you know, you hear people saying things like,
00:06:37.320oh, AI is making me, you know, do my job faster. And like, no, that's not true. My boss is making
00:06:44.480me do my job faster. The AI is a tool and you could use it in different ways. So how do we
00:06:51.000push back against this larger trend of reverse centaurs and how is ai playing into it i don't
00:06:58.660think ai is an extraordinary technology i think ai is a normal technology which is to say there's
00:07:03.940good ways of using it and bad ways of using it and if your boss tells you to use it they're probably
00:07:08.540making you miserable and if you get to decide how to use it you'll probably make yourself happy
00:07:12.280though not always because people sometimes make bad decisions that's like that's just every normal
00:07:16.600technology works like that. But there is something extraordinary about AI, which is the size of the
00:07:22.800financial bubble that it's harnessed to. And that is the most destructive thing about AI. It is the
00:07:28.320thing that is upstream from all the destructive stuff that happens with AI, which is like the
00:07:32.720suppression of wages, the immiseration of workers, the climate damage, the use of AI to automate
00:07:39.340harm to people, whether that's targeting in Gaza and a genocide or Doge deciding who to fire or
00:07:47.760the problems we have with customer service being outsourced to AI. All of those are downstream of
00:07:55.060the fact that there's this massive financial bubble. And the size of the bubble can't be
00:08:00.280overstated. When I wrote the book, the global expenditure on AI was about $700 billion. A year
00:08:06.760later, it's 1.4 trillion and it's on track to double again. And that's a much bigger bubble
00:08:12.080than, you know, South Seas. It's a bigger bubble than tulip bulbs, certainly a bigger bubble than
00:08:16.660like Web3 or crypto or metaverse. You know, Mark Zuckerberg wasted $61 billion of his investors'
00:08:23.440money on metaverse. He's already spent $150 billion in three years on AI, and it's another
00:08:27.980$150 billion this year. And he says it's going to be more next year. And so where does this
00:08:33.560extraordinary bubble come from and how do we stop it? That's the question I think we need to ask
00:08:37.820because bubbles are very bad, partly because of the harms we've just articulated, climate, labor,
00:08:43.820and so on and so on. But partly because the nature of a bubble is to have insiders tell lies about an
00:08:52.320economic opportunity in order to steal money from ordinary investors. And in our world, the ordinary
00:08:58.140investor is a worker who no longer has a defined benefits pension and has a market pension.
00:09:03.560Which is to say that if you don't want to starve to death when you're old, you need to find something to invest your money in.
00:09:09.040And these guys are tricking you into investing your money into something that they're just going to take and you're the bag holder for them.
00:09:15.380So bubbles are really bad and how do we get rid of them?
00:09:17.660Well, to understand that and to understand how to get rid of it, you have to understand the material and ideological basis of this bubble, which I'm happy to unpack.
00:09:26.980I know I've just said a lot of things, so I want to get a chance to get a word in edgewise there if you'd like.
00:09:31.320You and I were on a panel in L.A., what, I guess that was maybe two months ago, and you said some of this stuff there, and that was, I think I asked you to be on this podcast right after that because I thought, you know, I knew I wanted you on here, but I wanted you to say a bunch of that stuff on here.
00:09:48.260Look, so the material basis for all of the tech bubbles of this century is that firms that have saturated their markets need to find a way to convince investors that they can still grow.
00:10:01.980Yeah. And that is not because, per the old leftist saw, eternal growth is the ideology of a cancer cell. Wanting to continue to grow forever is, in fact, like a material thing that people want, not an ideological thing that people want, because firms that are growing have higher share prices relative to their earnings.
00:10:20.940It's called the price-to-earnings ratio, and that's because a share in a company is a claim on its future earnings, and if your company is growing, its future earnings will be larger next year and larger the year after that, whereas if your company is mature and has steady state, then its earnings are going to be the same year on year or maybe move around a little in a noisy way but not see these big spikes or continuous growth.
00:10:42.780So, of course, that share is worth less. And the reason that is materially important is, first of all, because the executives in the company who decide what the company is going to do are compensated in shares, which means that if the share price experiences a sudden decline because the market has revalued the company as a mature firm instead of a growing firm, they stand to lose a giant amount of money personally.
00:11:05.720Yep. Right. So that in that case, what we're saying is that without growth, there's massive contraction. And also the way that firms love to grow in this century where we don't enforce antitrust laws is by buying other companies. And the cool thing about having a growth stock is your shares become highly liquid and you can buy other companies by giving them shares.
00:11:25.640And the great thing about shares is they're a substance that is endogenous to the firm and can be produced on the premises by typing zeros into spreadsheets, unlike money, which is exogenous and can only be acquired by convincing a creditor or a customer or an investor to give you some money.
00:11:44.500And if you try and make the money on the premises, the treasury department takes you away in handcuffs.
00:11:48.620And so always better to be a company that has got a growth stock because then you can grow by buying other companies with your growth stock, which makes your stock keep growing.
00:11:59.920So it's a self-licking ice cream cone.
00:12:02.420And so firms really, really want to have a growth story.
00:12:06.800And through this century, the growth stories started as fairly reasonable, but low probability.
00:12:14.700So Facebook was about to become Google by doing the pivot to video and taking YouTube over.
00:12:20.540Google was about to become Facebook by doing Google+.
00:12:36.980At a certain point, they got tired of having arguments about whether Facebook will become Google or Google become Facebook.
00:12:41.960And they're like, no, we're going to become a thing that doesn't exist.
00:12:44.220And, of course, that's less reasonable, but at least no one can credibly argue any more credibly than you can argue that that's a small opportunity versus a large opportunity because you've just made it up.
00:15:12.800And I think the exuberance is grounded in the ideological proposition that on the one hand, these major capital allocators, billionaires, Gulf states, and so on, are gripped by the fantasy of a world without people because they are gripped by the terror of what other people mean to them in the world.
00:15:29.840If you are like a boss, you think you're driving, right?
00:15:33.140You think you're in the driver's seat, but you know if you don't show up for work, everything happens just fine, whereas if the workers don't show up, the factory shuts down.
00:15:40.120And so you suspect you might be in the backseat with a Fisher-Price steering wheel, and what AI dangles is the possibility of wiring that toy steering wheel into the drivetrain of the car.0.99
00:15:49.780So you have an amazing idea, and you prompt the AI, and it shits it out, and you don't have to have these ego-shattering confrontations with screenwriters who tell you that your screenplay is stupid,0.53
00:15:59.380with programmers who tell you your idea won't scale0.97
00:16:01.480or can't be secured or will run into problems
00:16:03.760once it interfaces with the rest of the technological world
00:20:38.300then you get to something that resolves this paradox.
00:20:42.780And then what falls out of that is, well, if the thing that AI is good for is making skilled workers work better, but without necessarily a reduction in cost, right?
00:20:54.660But instead an improvement in quality, well, that's nice for us, but it's not going to produce the return on the investment you want.
00:21:21.000And, you know, I was at the Kaiser Center this morning on sunset at the nuclear medicine clinic getting a PET scan, which is now on a radiologist's desk.
00:21:30.560Uh, and, um, if I thought that there was someone working for Sam Altman down at the hospital administrator's office saying to him, look, right now you've got a million dollars worth of radiologists on the payroll.
00:22:56.400But that's not how you make back the cost of developing the radiology bot, right? You don't make back the cost of developing the radiology bot by giving more power to workers and having them do fewer outputs for more money, right? That might be how a public healthcare system that was well-funded would use this technology.
00:23:15.420It's certainly not how the private sector is going to use it. And it's absolutely not how austerity crazed, you know, NHS or OHIP in Ontario are going to make use of it. They're only looking for cost savings.
00:23:26.520You're reminding me sort of obliquely of something that Douglas Rushkoff said a few years ago before the current AI boom kicked off.
00:23:38.260This story that he told of being brought to a room full of a few, you know, very wealthy tech moguls who asked him, how do we deal with societal collapse?
00:23:53.280How do we use our money to insulate ourselves from societal collapse and guarantee the loyalty of security forces after the end of civilization?
00:24:02.500What kind of bomb collar do I need to put on my mercenaries so they don't kill me and take my food after I move into the bunker?
00:25:08.900Right. And, but the reason hell is other people is because other people are quite nice and yet they stubbornly refuse to acknowledge that you're right and they're wrong. And so when you want to do something that requires someone else, you have to either apply suasion or, or coercion to get them to do it. And that is very tedious.
00:25:29.500And so, you know, I think the boom of AI boyfriends and AI girlfriends is the same impulse in different guys. It has different consequences. We're not firing all the girlfriends. So, you know, although I have to say that I think the fact that it's mostly AI boyfriends says something about who is harder to live with.
00:26:51.880And if I like dangle remarkably small sums of money in front of theater kids, they will spend every hour that God sends trying to figure out how to maximize your engagement with the platform.
00:27:00.740The problem is that an algorithmic feed of theater kids doing skits is fully fungible with any other algorithmic feed of theater kids doing skits.
00:27:10.380And so you can go to TikTok or whatever.
00:27:12.900And if it becomes non-fungible, right, if actually which theater kid you're watching matters, well, then that theater kid can start demanding things from Mark Zuckerberg.
00:27:20.420So he's got a new plan. He's going to replace the theater kids with chatbots. And so we get rid of the theater kids, we replace them with chatbots, and we get social media without socializing, which is romance without romantic partners, which is a workplace without workers, which is screenplays without screenwriters, which is movies without actors.
00:27:39.360You see this all the way through. And back to your book, I think that this is in a lineage with long-termism that says don't care about real people. Put all of your energy into making as much money as possible at the expense of living people.
00:27:59.840and tell yourself that it's morally defensible
00:47:39.520And so, you know, and science, technology and science and everything else is just, you
00:47:45.280know, messy details that that don't ultimately matter for the grand scope of human history.
00:47:50.760And so this is like the idea behind these novels is he's doing, you know, Asimov was doing the
00:47:57.200decline and fall of the Roman Empire in space. And and so Selden's idea was to take this science
00:48:04.660of psychohistory and use it to take this interstellar dark age that was supposed to happen
00:48:10.760between the first and second galactic empires
00:48:13.740and shorten it by a factor of 15 or 20, something like that.
00:48:17.920Yeah, that's the point, is it's not purely deterministic
00:48:20.580because what he discovers is that there's a way to intervene in it.
00:48:24.700You can't head it off, but you can change the way that it pulls out.
00:48:29.740So, I mean, there's a sense in which that's a very humanistic message
00:48:32.800that kind of jives with, say, the work of Ada Palmer,
00:48:35.300who really has done amazing work to talk about how
00:48:40.760There's a there's a certain amount that comes to you through the great forces of history and that produces an envelope within which human agency can change outcomes.
00:48:51.240And the great forces of history are really just a word for the human agency of a previous era in history that set in motion certain forces.
00:48:59.160But, yeah, it's it's it's it's not quite fatalistic.
00:49:04.340Yeah. Right. He's not like like Kurt Vonnegut eventually gets into this place where he's just like, you know,
00:49:09.400the first billiard ball in the universe, knock the second billiard ball, and then everything
00:49:14.100has been determined since then. And nothing matters. We're all just like a cosmic Newtonian
00:49:20.900dance. And even the fact that you're offended by that was set in motion by the billiard
00:49:27.220balls, you know. Mark Twain, too. Mark Twain thought this.
00:49:31.320Well, the funny thing to me, though, is, you know, Selden's utopia is sort of a utopia
00:50:16.200You know, I think that what's interesting about those Asimov novels, psychoanalytically, in respect of the people we see today, is it supposes that the social sciences can be turned into a kind of physics.
00:50:30.340And that qualitative questions can be eliminated from the social sciences, that you can quantize qualitative aspects of humanity with no loss of fidelity, and then stick them in models and perform mathematical operations on them and create high fidelity predictions of what's going to happen.
00:50:47.220And of course, that's just not true. I mean, no, like, and Asimov was writing in the age of Claude Shannon, who's saying things like, you know, you're going to lose information when you, when you perform that quantizing step.
00:50:58.960And yet, you know, this is where the hand-waving is, right?
00:51:03.120And, you know, hand-waving is an art among science fiction writers.
00:51:08.740Heinlein, but lots of other writers, have written AI stories that you can see the hand-waving turning into an investor story today.
00:51:15.340Because the hand-waving is, we took computers and we did computer with them.
00:51:19.320But we added more computers and we did more computer with them.
00:51:56.600Let us all thank ourselves that they're confining themselves to early Heinlein and not the stories he wrote when he had the benign tumor that was restricting the flow of blood to his brain.0.99
00:52:06.400And he told his editor to fuck off and started writing 900-page novels about traveling back in time and having sex with his mother.0.96
00:52:14.900I think Charlie Strauss would be the person to bring on to talk about that.0.99
00:52:19.340He's definitely the guy to talk to about that.
00:54:44.120No, I mean, but that's exactly the thing, right?
00:54:46.760I mean, the social sciences have to be complex in other ways, in ways that physics is less complicated, because otherwise they're not going to be able to study social phenomena.
00:54:59.440But that makes them messy and brings us back to the fact that hell is other people.
00:55:05.560You know, the funny thing is, you're right when you said earlier that, like, the annoying thing about other people is that they don't understand that you're right and they're wrong.
00:55:16.000But I think that the tech billionaires, I think that they see it in an even more sort of nakedly sociopathic way.
00:55:25.600And that the thing that's awful about other people is that they need things.
00:57:08.560Right. I mean, I'll call it idealism. It's not idealism in the sense of hewing to any ideal that I like, but it hews to an ideal that says that, you know, you should all do what I tell you. And if you're not smart enough to do that.
00:57:22.320And maybe this is a good place to close things out because this is something that I, well, I guess I mentioned it toward the end of my book, but I think that in a way, these guys are too idealistic in the sense that they are married to an idea about how the world is regardless of all evidence to the contrary, right?
00:57:45.660Peter Thiel thinks that he's not going to die or that he doesn't have to die.