Tech Tycoons have Got the Economics of AI Wrong

Even as financial growth was simply taking off, some economic experts were already pessimistic. Coal, wrote William Stanley Jevons in 1865, is “the mainspring of modern-day product civilisation”. Yet it was limited and would quickly go out. Although more might be found by digging deeper, it would be significantly costly to extract and these greater expenses would decrease the competitiveness of Britain’s manufacturers. After all, in other nations the black fuel was still in sight of daylight. Efficiency gains-using less coal to produce the same quantity of stuff-would not save the nation. Indeed, cleverer usage of restricted would just supply an incentive to burn much more coal, which would, paradoxically, result in an even faster usage of British reserves. There was no escape, the Victorian economist thought. Coal would be tired and the country was most likely to “agreement to her previous littleness”.

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This post appeared in the Finance & economics section of the print edition under the headline “Rocked by DeepSeek”

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Tech tycoons have actually got the economics of AI wrong

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