Click here: to donate by Credit Card
Or here: to donate by PayPal
Or by mail to: Free Republic, LLC - PO Box 9771 - Fresno, CA 93794
Thank you very much and God bless you.
Posted on 04/14/2026 9:24:19 AM PDT by ProtectOurFreedom
Here is a transcript of the intriguing and insightful Mo Gawdat video...
Your life and mine will witness times where there will be 20, 30, 50 percent unemployment in certain sectors, maybe even more. Most of us are going to witness something we've never seen before. The interesting thing is that this is not unlike humanity's origin.Jobs are an invention that serve a capitalist system that has served humanity for a while and pained humanity for a while. And the question is, is the capitalist system going to survive artificial intelligence? Funny enough, the capitalists that are celebrating the productivity gains are not realizing that, without consumption, there is no economy. So even if you can have all of the productivity gains in the world, by firing people consistently, nobody's able to buy what you're making.
So we're going to have to find an economic model that works with that. Wealth is going to have very little meaning for most of us in a few years' time. The very base of capitalism, which is labor arbitrage to hire you for a dollar and then sell what you make for two, is going to disappear.
So there is no arbitrage anymore because basically machines are building everything for no cost at all. At the macro level, think of the advantage that China had economically, where they had cheaper labor. If that shifts into a world where labor is literally one capex, where you buy a robot or a lease on that robot, which now is down to $9,000 a pop, it's now just a question of how clever that robot is, which is going to advance with time, like the law of accelerating returns of every technology.
And then you're in a place where making things costs close to zero. Anyone with an understanding of supply and demand basically means that the price of things accordingly is going to drop to zero as well. So the entire capitalist model has to be rethought.
Mo Gawdat spent years inside the machine at Google X. Now he is saying out loud what the economists will not. “The very base of capitalism, which is labor arbitrage, to hire you for a dollar and then sell what you make for two, is going to disappear.”That is not a prediction. That is a coroner’s report on a system that has not stopped breathing yet. Capitalism was never about innovation. It was about one equation: Buy human time cheap. Sell the output high. Pocket the spread.
Every empire. Every fortune. Every supply chain on Earth was built on that margin. AI just closed it to zero.
A humanoid robot now costs $9,000. It does not sleep. It does not negotiate. It does not quit. It runs every hour of every day at a quality ceiling no biological worker will ever touch.
When production costs fall to nearly nothing, the entire pricing structure of the global economy falls with it.
But here is what every CEO celebrating margin expansion has not thought through for five minutes. Gawdat: “Even if you can have all of the productivity gains in the world, by firing people consistently, nobody’s able to buy what you’re making.”
That single sentence should end every strategy meeting on the planet. Capitalism is a closed loop. You pay workers. Workers become consumers. Consumers buy products. Revenue funds the next payroll. Cut the worker and you do not just eliminate a cost. You eliminate the customer.
Every company racing to automate headcount out of existence is quietly engineering the death of its own demand. They are building the most efficient production systems in human history to sell to a population that no longer has income. 50% unemployment is not a recession. It is the demand side of the economy going permanently dark. You cannot push infinite supply into zero purchasing power. The math does not care about your earnings call.
Gawdat: “Wealth is going to have very little meaning for most of us in a few years’ time.”
This is where it turns on the people who think they are winning. If production approaches zero cost, scarcity begins to dissolve. And scarcity is the only reason money holds value in the first place.
The billionaire class is stockpiling a currency that is quietly losing its reason to exist.
Gawdat: “So the entire capitalist model has to be rethought.”
He is right. And nobody in power is doing the rethinking.
Every board meeting about efficiency is a conversation about dismantling the very economic engine that made the board meeting possible.
The question was never whether AI could produce enough. It was whether capitalism could survive its own success. The machine does not just replace the worker. It erases the consumer. And a system that can produce everything but sell nothing is not an economy. It is a machine that perfected itself into extinction.
|
|
Click here: to donate by Credit Card Or here: to donate by PayPal Or by mail to: Free Republic, LLC - PO Box 9771 - Fresno, CA 93794 Thank you very much and God bless you. |
To me, it is more like "War Games" (1983) where Dr. Falken and David direct the computer to play tic-tac-toe against itself. This results in a long string of draws, forcing the computer to learn about futility and no-win scenarios. WOPR obtains the launch codes, then cycles through all the nuclear war scenarios it has devised, finding that they all result in draws as well. Having discovered the concept of mutual assured destruction ("WINNER: NONE"), the computer tells Falken it has concluded that nuclear war is "a strange game" in which "the only winning move is not to play."
AI is a "strange game," too. But for a company to decide to not play cedes the victory to its competitors, so every company HAS to play the AI game...even though it can very well destroy the economy and their companies.
This has historical but imperfect precedents:
What’s different this time: AI hits cognitive labor, not just manual labor.
That means:
If the cost to produce falls to zero, then the selling price must also fall to zero. If everything is free, then way does one need wealth?
Another excellent article. Thanks.
I think it’s gonna be awesome. I’ll bet this guy thought the same before AI came around.
What if AI can do everything for us and we don’t HAVE TO work? Just enjoy it’s fruits? Every day at the golf course or beach? It would get boring so everyone spends 4 hours a day doing military training preparing for the next war. Free time will free up moms to be better moms. Teach the kids more.
“If everything is free, then way does one need wealth?”
That had occurred to me a while back, too. Could we reach a point where everybody on earth has the same standard of living as those of us in the USA and it is all “free”? Turns out the answer is “no” because there are not enough materials in the earth’s crust nor enough energy to achieve that. But it’s an interesting thought experiment to ask if, say, 10% or 20% of the world’s population does not have to work and has all their needs met at no cost through AI and robots. What is wealth? What is money? What are prices?
It makes the mind boggle.
Pelosi famously said (when Obamacare was passed) that it was going to free all of us to be poets! That worked out real well.
DIRTYSECRET wrote: “I think it’s gonna be awesome. I’ll bet this guy thought the same before AI came around.”
The critics of AI are today’s ‘luddites’. Today, the term “Luddite” is most commonly used to describe anyone who shuns or opposes new technology.
ProtectOurFreedom wrote: “That had occurred to me a while back, too. Could we reach a point where everybody on earth has the same standard of living as those of us in the USA and it is all “free”? Turns out the answer is “no” because there are not enough materials in the earth’s crust nor enough energy to achieve that. But it’s an interesting thought experiment to ask if, say, 10% or 20% of the world’s population does not have to work and has all their needs met at no cost through AI and robots. What is wealth? What is money? What are prices? It makes the mind boggle.”
My mind is boggled by the idea that wisdom is found on X or in youtube videos.
BTW, the rest of the world can have a uniform standard of living if everyone is reduced to the same level which is the objective of the communists and greenies.
There will be a rationaing system for the free stuff. That is where politics comes in.
Go Amish.
What we call work has sure changed
Actual work now is rarely done by citizens
“The critics of AI are today’s ‘luddites’”
Or maybe they can read the writing on the wall. Eliminate jobs eliminate the consumers. Not everybody is a trust fund baby or welfare soaking bum.
“BTW, the rest of the world can have a uniform standard of living if everyone is reduced to the same level which is the objective of the communists and greenies.”
Everybody except them and the chosen class. They just want the majority to be their slaves.
And this premise is why the article is idiotic.
AI is VERY, VERY, VERY expensive to run.
The current crop of AI companies are operating at huge losses in a war VC of funding attrition.
Just wait until AI is priced to break even, you will be paying $200 a token since you fired all of your employees ....
Resolute Conservative wrote: “Or maybe they can read the writing on the wall. Eliminate jobs eliminate the consumers. Not everybody is a trust fund baby or welfare soaking bum.”
Since this would be the first time those opposing technology were right, what make you think that this time they’re right?
Just consider Blockbuster, think of the jobs lost there to internet streaming and netflex.
Or, those who stoked the furnaces of the steamships when oil fired boilers were introduced.
Or, those who lost their farm jobs when tractors replaced horsedrawn plows.
Buggy whip makers.
Numerous other examples of technology improving lives and livlihoods.
Our hero one Charles Murray(LIBERTARIAN)wrote a book advocating a minimum income. That was weird considering McGovern did the same thing in ‘72. Perhaps societal evolution goes in that direction as society advances.
It seems everyone has to work to keep them busy, tired, and then too lazy to cause trouble. Welfare doesn’t seem to help it’s recipients that much but it gives them the free time to contemplate why others are doing better. The better off people then get to that too tired point to pay attention to voting patterns.
SecondAmendment wrote: “And this premise is why the article is idiotic.”
Exactly so, but unfortunately, we have a small, but vocal, group of freepers who see AI as an existential threat. They are no different than the ‘luddites’ of old England who destroyed textile machinery to protect their jobs and wages.
“The very base of capitalism, which is labor arbitrage to hire you for a dollar and then sell what you make for two, is going to disappear.”
Truly stupid comment.
If that was the basis for capitalism, it would have never existed because you would not be able to sell anything. Why would anyone work for such a deal?
It is just the opposite. Capitalism leverages your work so that you can produce much more than if you were to do it on your own.
Go to any grocery store and think what you would have to do on your own to have a pound of meat, a loaf of bread, a pound of apples.
Whereas, one hour of your work at a capitalist (entrepreneur) enterprise paying you 30 dollars will buy all that.
All of those examples took many years and decades for the change to be absorbed into the economy. And none of them replaced labor to the extent that AI is going to replace labor, especially cognitive labor. Most earlier innovations reduced manual labor, not cognitive labor. Big difference between those historical precedents and what we are facing today.
Humans will gradually loose IQ as thinking processes atrophy. Machines will allow us to live as “carbon units” for their amusement.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.