Tech Tycoons have Got the Economics of AI Wrong

Even as financial growth was simply taking off, some economic experts were already downhearted. Coal, composed William Stanley Jevons in 1865, is “the mainspring of modern material civilisation”. Yet it was finite and would soon go out. Although more might be found by digging deeper, it would be progressively expensive to extract and these higher expenses would lower the competitiveness of Britain’s manufacturers. After all, in other countries the black fuel was still in sight of daytime. Efficiency gains-using less coal to produce the same amount of stuff-would not conserve the nation. Indeed, cleverer usage of minimal resources would simply supply a reward to burn much more coal, which would, paradoxically, result in an even quicker usage of British reserves. There was no escape, the Victorian financial expert thought. Coal would be tired and the country was likely to “agreement to her previous littleness”.

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

Finance & economics February 1st 2025

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Tech magnates have got the economics of AI incorrect

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