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Tech Tycoons have Got the Economics of AI Wrong

Even as economic development was simply removing, some economists were currently pessimistic. Coal, wrote William Stanley Jevons in 1865, is “the mainspring of modern-day material civilisation”. Yet it was limited and would quickly run out. Although more might be discovered by digging deeper, it would be significantly pricey to extract and these higher expenses would decrease 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 very same amount of stuff-would not conserve the nation. Indeed, cleverer use of restricted resources would simply supply an incentive to burn even more coal, which would, paradoxically, lead to an even faster use of British reserves. There was no escape, the Victorian economic expert believed. Coal would be exhausted and the nation was likely to “agreement to her former littleness”.

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This appeared in the Finance & economics area of the print edition under the heading “Rocked by DeepSeek”

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Tech tycoons have actually got the economics of AI wrong

From the February 1st 2025 edition

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