Why the Industrial Revolution Is a Bad Precedent for AI-Driven 10x Growth
Is the Industrial Revolution a good precedent for explosive growth today?
A common argument for explosive AI-driven growth cites the Industrial Revolution, when UK per-capita GDP growth accelerated ~15x. But this post shows that 10x-above-average growth was already common in pre-industrial Britain, occurring in ~46% of years, while today such acceleration is vanishingly rare. Using standard-deviation analysis, the author argues an IR-style acceleration would lift frontier growth to only ~2.8% per year—not the 20%+ often claimed. The strongest analogue is early industrializers like South Korea, not today's frontier economies.
A person living in the 1700s would have been asked to envision good years becoming much more common—a rate they had already experienced many times. A person today is being asked to envision a qualitatively different kind of economic dynamics, one that falls several standard deviations outside norm for the world today.
- blfr
Will we see any growth acceleration? The Internet doesn't seem to have had this effect. AI may turn out to nothing in terms of gdp growth or even be hugely deflationary.
- cheschire
The growth will be in stocks and capital gains, in the consolidation of wealth by a few individuals.
If GDP increases, that’s just money left on the table by the ultra wealthy.
- bluegatty
No - the growth today is capital expenditures, not productivity.
To be fair, the industrial revolution was a 100 year period or so, computers, web, cloud, mobile and AI will likely be perceived in the same historical framework.
AI will take some time to pan out in terms of productivity, but it will.
A better comparison might be railroads.
- arexxbifs
The interesting thing here, I think, is what actually drives the growth of industrialization: cheap energy, an exploitable labor force and increased automation.
Every industrial economy seems to reach a plateau of diminishing returns, and it actually seems to be reached faster the faster industrialization is implemented. We see it in Europe, in the US, in Japan, in South Korea and it seems China is well on their way there, too: Cheap energy is diminishing (shale oil fracking, increased cost of building nuclear, etc) and exploitable labor has mostly been pushed as far as it can (dwindling fertility rates across the globe). Thus, we place our hope in automation, which has also been taken incredibly far already.
LLMs really must be some magic special sauce if they're to automate us into a new era of explosive growth. So far I don't think they're living up to that promise.
- Nevermark
The industrial revolution was a mini-quake compared to automated cognition. But we can learn some things from it.
I see the industrial revolution as the invention of the cart. It made horses more productive. Then the car replaced horses.
It is taking people longer to wrap their heads around the reality than I thought it would. If there was a competitive human species on the planet getting smarter by the day, people would get it.
It is hard to maintain awareness of something which presents questions with no obvious answers. The one answer I have, is we need to clean up the ethics in our systems. Ethics are not costs against value, they are the full accounting and optimization of all value.
More intelligent creatures than us, not held back by our our outdated biologically instincts, won't have any trouble with that game theory.
So ethical systems are not just a shield for us as individuals, but also of inherent value to new forms of self-interest.
But that won't help us, if we don't push to align and strengthen our own systems now. And reverse the concentration of power in corrupt individuals who demonstrate every day that they are not interested in the wellbeing of humans in general.
This is urgent. We do not have a lot of time to effect this change.