> I wrote this with Claude Fable 5.2, Anthropic’s AI model. If you don’t trust AI, just know that these are the same models that are currently wiping the floor with every other field, and I really didn’t try and force fable to write something I already agreed with. Actually, this whole experience has been me realising just how wrong I am about some things. Anyways, Claude did the measurements with me, drew the figures and drafted most of the text from my earlier essays.

Condescending attitude aside, if I wanted to hear what Fable says about this, I'd ask Fable myself. I want to hear what YOU have to say about this.

I'm no economist but it seems like competition for housing drives up prices as wages increase. Also, more generally, people's happiness seems to be more correlated with their economic rank in a society, rather than their wealth in absolute terms [1]. So, people want to do better than their neighbors, not just do well.

1. Boyce, Brown & Moore (2010), “Money and Happiness: Rank of Income, Not Income, Affects Life Satisfaction”

Productivity and inflation are big subjects.

Just to touch on one important problem for which one must account:

Productivity over time is how much stuff you get out vs what you put in, from one time period to the next. Inflation is what the stuff costs over time.

But what do you do with stuff you used to make that you don't make now?

And the opposite: what do you do with stuff you make now that you didn't used to make?

If you look only at the the things that are almost exactly the same from one period to another, usually you find that the intuitions hold: food used to take 10% of our hours, now it takes .6%, etc. etc.

If you dig into the details of CPI and PPI, you'll quickly say, "waiiiiiit a second, can you really just do that?"

For example: they'll say that your tv or car now is "more stuff" because of "features." But if you had to make the old car now, you might be able to make way more of them for the same inputs.

The simple answer is that we will continue to work this hard as long as some members of society are willing to work this hard. The hardest working participants of the labor market will set the tone of the competition for high-paying jobs.

A typical tech job requires far more than 40 hour work weeks.

So this is wrong mainly for two reasons:

1. We consume a lot more now than we did before. You could work less and consume more than you did in 1973 or whatever. But you wouldn't have the newest phone, half your kitchen's appliances, seatbelts or seatwarmers and a gps in your car, or air conditioning in your home. Even average home sizes have nearly doubled since 1973.

2. There is no economic law that productivity should equal wages. When there's decreasing marginal returns to labor, it's marginal productivity that determines wages. That's the current case. When there's increasing marginal returns to labor, then you get the corner solution where wages equal average labor productivity. That was rhe case before and what changed in 1973. That's when America's frontier closed and instead of growing outwards, America started to be forced to have to do more with what it already had.

The way out is to reopen the frontier which largely requires relaxing land use laws to allow building up and out.

Keynes is 100 years outdated as an economist. He's more relevant than most for some of his contributions. But his predictions and reasons for them were clearly not all correct.

This reminded me of a strange quote I heard a while ago:

"I think the problem we've had is, people decided they didn't want to work so much anymore. (...)

We need to see pain in the economy. We need to remind people that they work for the employer, not the other way around. (...)

So it's a dynamic that has to change. We've got to kill that attitude, and it's go to come through hurting the economy, and that's what the whole world, the governments around the world are trying to increase unemployment, to get that to some sort of normality."

-Tim Gurney

https://www.youtube.com/watch?v=aJHP0VfeOrU&t=12s

Productivity gains have mostly gone to the investor class, they’re not only not working but making more for not working than they ever have. Elon could go sniff glue for a day and he’ll make more money than most of us would working 10 jobs for the rest of our lives.

Nobody wants to admit they are having a 15 hour work week with AI, but if in office attendence is any indication, I think many knowledge workers are starting to reduce work hours. It is much easier to do so remotely.

Some are filling hours with more work however it seems like many are not increasing work volume, just quietly reducing the amount of labor.

This seems to point to that there should be no income tax for individuals, only consumption and wealth taxes.

And there is an argument for companies to pay both a wealth and a turnover tax, appropriately scaled. This might be able to stimulate more diversity of small/medium companies, and thus negating the monoculture like markets that currently seem to arise on a per sector basis, also allowing wider ranging ideas to flourish.

The tax system in western countries generally does not seem to have kept pace with the change in what work/productivity now is, and so gives incentives to the established rather than the emerging.

A number of eastern economies seem to have worked out better regimes encouraging overall diversity of enterprise - it is a tricky balance as you don't want to remove the incentive to try, but the concentration of wealth we see is not healthy in such individualistic societies as the west has.

Tech (business in general) is a Red Queen's Race. If everyone else runs faster, you have to run faster just to stay in place.

We're very good at absorbing productivity improvements. Hell that's the whole goal of software – make things faster then eat the edge by making them faster for everyone.

Previously posted as https://news.ycombinator.com/item?id=49603086

The author still writes with a savior complex. The basic observation, that productivity goes up but the rich get richer, is not novel to their work. Their explanations and conclusions about this issue are also not new either - they just rehash 250-year-old classical economics.

The actually (apparently) novel part - a macro wage model described in 'Pinning the Wage to Scarcity and Technology' - is not discussed in detail. We don't know its relative merits or if its predictions are historically accurate.

IMO: if my company slows down to a healthier 30 hours, we lose to competitors and lose our livelihoods. So we have to keep up the 40 hours or disappear. Seems like so much effort is wasted in competition.

one thing I don’t see talked about in these articles that compare the recent past (1970s) with modern workers is the huge influx of woman and immigrant labor.

I don’t care about the political or social aspects of this everyone can and should be able to work doing what they want, but there has to be some impact on workers leverage when we go from women being ~30% of the workforce (1970) to >50% (2026). Immigrant labor has also exploded over that time.

Again I don’t give a shit about who works, just noting that huge increases in workers must have some impact?

We work this hard because there's insufficient collective drive to provide for all before the wealthy are allowed to extract.

If 2 people both need something to survive, then collectively the group needs to produce 2 of those things. But if 1 of them demands 1000 of that thing, then collectively they need to produce 1001 of that thing to satisfy the demand.

The _problem_ is that the demand for the extra 999 is given equal weight and competes for production resources vs the 2 that are actually needed instead of explicitly prioritizing the 2 and then letting the 999 come from a secondary market of post-needs-fulfillment labor. Right now if the group produces only the needed 2, then most of the time the person who only wants the 1 that they need won't get anything at all, and in many cases that means they starve and die.

When the consequence of collectively producing less than the total sum demanded by the wealthy is that some people will then starve and die, that hangs like an inverse sword of damocles over the heads of the poor and middle class, always threatening those who can't just buy their way out into laboring more than would be otherwise needed.

The very obvious to me solution is to structurally prioritize meeting everyone's common needs for food/water, shelter, and medical care first before then satisfying the desires of the rich who want more. That way rich people can still get all their private jets and fancy cars, but they'll need to pay more to convince people that the loss of their leisure time is worthwhile instead of everyone in the underclass living under constant threat for survival.

Personally I think the constant political drumbeat to have more jobs instead of literally anyone trying to maximize collective leisure time is the greatest tragedy of modern capitalism. It's always jobs jobs jobs instead of needs and rest.

Not least people have gotten much more productive at some things and not at all more productive at other things. And those things become a larger fraction of what people want, see

https://en.wikipedia.org/wiki/Baumol_effect

We had a run from 1980 to 2020 or so where the price of most things stayed stable except for housing, healthcare, education and childcare. It’s only the last year that people are complaining about the price of electronics.

A couple months back I wrote [0]:

> There is a machine called Productivity, and on this machine there is a knob and a button. The knob increases productivity, and the button is labeled "reset."

Whenever we increase productivity, someone comes along and presses the reset button. The current level of productivity becomes the norm. In fact, if you don't produce as much you are unproductive.

That extra time we gained is not for you to rest, but it's to find ways to produce more.

[0]: https://idiallo.com/blog/where-did-the-productivity-gains-go

We live in a money-based economy. Money comes from other people, who don't give it away unless you satisfy them somehow. Those people that want work from you, will take all the work you can perform (up to the limit of labor laws). That's why.

I can't listen to that any more, the sound quality is terrible and the speaker is all over the place.

The whole video could of been said in one sentence!

Microsoft going faster is funny, on a number of levels - The whole company seems to be run as if it's still the 1990's :D getting anything done or changed takes years.

Seems like tragedy of the commons principle - if everyone was chilling and working 20 hour weeks, I'd do the same. But people hustle and grind to get rich so that's the culture I have to adapt to.

It's something of a collective action problem even beyond power relations. My motivation to work less than 40h just isn't that high since everyone around me is working 40h too.

Also has to do with demand for savings. The US has a bunch of mostly accidental policies that juice that demand.

Because capitalism is a competitive environment, and improvements in efficiency increase the opportunity cost of not working harder.

We aren't competing with workers from 1973, we're competing with other workers leveraging the same accelerated efficiency.

Whitney’s cotton gin increased the speed separating cotton fibers from the sticky seeds by 50x. I wonder if labor will experience similar outcomes with the efficiency AI creates?

A lot of people aren't working hard. They might sit at their desk from 9-5 but total effort put in is probably only around 15hrs a week of solid work.

It's hard to see this if you're a typical HN reader because we're all a pretty motivated lot who tend to enjoy what we do, and what we do is fairly concrete. But survey the typical office and you will be blown away by how little effort people are putting in. And of the "work" that is getting done a lot of it is never used, or the sort of thing whose quality can't be easily evaluated so it trends towards the min viable product.

I used to work at a company where a significant fraction of the workforce just spent all day producing "decks" (PowerPoints). They hardly sent emails or wrote documents - even things you'd expect to be a Word file were decks - and on the few occasions I gently enquired about how long they'd been working on their current "project" (a deck) I'd always regret it, because the answer would be something like several weeks. Total output from those weeks: a dozen badly made slides that said very little, and which could have been an email.

And that was in fintech! Go look at the public sector, academia or NGOs and be amazed at the endless armies of people who can spend an entire year on making a single PDF that your average hyped-up Valley engineer would produce in a week.

These people are all technically working a 40 hour week but in reality a lot of their time is spent on YouTube, napping, walking the dog, taking care of kids, listening to podcasts, researching their next vacation etc. Their managers don't hold their feet to the fire because they're doing the same things, and the company produces enough profits that nobody is really motivated to do layoffs (or they're tax funded and won't get fired even if they do no work at all).

One aspect that interests me is the relative difficulty of "part time" employment. We define "full time" as 40 hours a week (number may vary depending on location and field, but that's the stereotypical value). The wage that brings in may be, for successful people in a reasonably lucrative field, substantially more than needed for a comfortable life.

But let's say I decide that I'd be happy with my life at 50% of my current pay, and I want to do 50% less work in exchange. 20 hours per week instead of 40. If you're in the kind of job that makes enough for this to work, you probably can't do it. 20 hours per week is for crappy jobs in retail and food service. It's very unlikely that you'll find a tech job willing to employ you part time at any pay level.

So even if I, personally, am sufficiently productive and sufficiently compensated that I could afford to work a lot less than people did 50 years ago, I can't do it. At least, I can't do it on a rolling basis. The closest I can come is to retire early. Or maybe take some years off in the middle of my career, but that's extremely risky. I definitely can't cut my hours and pay in half over a week, or month, or even year.

I pointed out the same thing as this article and promptly got voted down.

https://news.ycombinator.com/item?id=49601814#49603709

There are a few misconceptions that come up in this discussion, which are important to understand:

a) people don't just work to make X dollars per year. They work to have a similar or higher standard of living than their peers (the famous "keeping up with the Joneses"). Sure there are dirt cheap housing in the middle of the country, but everyone wants to live in NYC. This is not about getting to a fixed point, it's a competition. So no matter how much more productive we get, we'll work as much as we reasonably can, which for most people is 40-60 hours/week

b) the issue with doing redistribution with taxes, is that the government doesn't just give the money back to the people. They waste it by proclaiming they can put it to good use, via custom benefits, non profits, etc. This is (usually) a huge waste of resources. So taking in an additional 30% of GDP as taxes won't make everyone 30% richest; it'll go in the pockets of the well connected or those willing to commit fraud and grift. And the politicians in governmetn have strong incentive to continue doing it this way because they get support and votes in return (e.g. through media corruption or special interest groups that vote as a bloc)

c) we have taken some of the productivity back - we have life saving drugs, clean water, cheap energy, all the entertainment in the world in our fingertips - things that 100 years back were reserved for royals and kings. But because of point (a) of course, nobody's happy having "just" that

d) even if the macines become super productive, it doesn't mean the price of everything is going to zero. There's still only so many apartments to rent or own in manhattan, and the price of human service will skyrocket (as it has done over the past few decades - compare the price of a TV to the minimum hourly wage for example). So it's a misconception that the value of money will go to zero, as Elon recently said

LLMs are not for you.

Quite surprising that the article does not mention, not even in passing, Russell's In Praise of Idleness [0]. Back in the 1930s Russell observed that a small fraction of the population had managed to sustain the British wartime economy in WWI, while the great majority of the workforce was in the trenches. Of course in peacetime you may want more prosperity, but the idea that this would require _everybody_ (well, at least every able-bodied male, this being the 1930s) to work _full time_ was already absurd back then.

[0]: https://en.wikipedia.org/wiki/In_Praise_of_Idleness_and_Othe...

Because the people paying your salary are out to maximize their income, not to fill your reasonable needs.

fear

When you stated "A third of the economy, in other words, already pays people for owning things, with no work asked of them." you glossed over all the risks and hazards and contingencies that come with capital, especially productive capital like machines or buildings or property. These are nontrivial and recurrent and require careful planning and continuous monitoring. This work, even if contracted out, bears upon the capital as a cost and thus is 'work' by another name that you choose to call 'price'

You also went on about "why a job that somebody is willing to do is assumed to be a job worth doing". This should have been something learned by workers early in their careers. Not sure what is happening in your hypothesis, or even what your hypothesis is in the study regarding the worker's responsibility within this system. You may want to put some bounds on that, or if unbound, be frank about that at the outset.

There were two paragraphs about consumerism that are hanging there unloved starting from "Two things happen..." and ending with "...every drop." but the worst part of those two paragraphs is that you attempt to drive them into a ridiculous conclusion: "Everything we measure about work is a record of what people did when they could not refuse." This is seems to embarrassingly stated as a polemical against human effort, which is ludicrous. Believe it or not, there are many many many many people who are energized each and every day by their careers, and get excited to have the opportunity to contribute to humanity's arrangements whether it is flipping burgers or curing cancer.

Where the paper went after this is really mindbending because it asks the reader to take a leap of faith that unseen models are replicating an entire economic system faithfully, and that hypotheticals can be believed and that the outcomes proposed can thereafter be believed. There is really not enough background or basis to make this leap and it is my assessment that economists will absolutely barbecue you if you try to make a pass. Asking readers to draw from their own anecdotal ["Do the people you know have more free time than their parents had at the same age?] is interesting but not going to move the needle in a meaningful way.

all the formulaic stuff that follows probably comes form the models and well maybe it is hopeful and maybe you could get a piece of land somewhere outside a small town in Oregon and try it all out on a government grant or something.

sorry if this seems harsh. I really want to give constructive feedback but its hard to see anything here that might gain traction.

Yeah, it only takes half the time to make the same stuff, but we aren't making the same stuff now, are we? (Or do you all want to go back to the pre-AI, pre-Internet, effectively pre-computer 70s?)

so that we have money to cover our health insurance!

Classic communism slop. The funniest part is that what they are suggesting is the feudal system. The king gives everyone parcels of land. Those parcels get subdivided. Poor people have just enough to survive. Have too many children? Some of them have to go die in wars, because you don’t have enough land to split it or to feed them.

because we don't have organized labor, all current working conditions in the US have been provided by through organized labor — child labor laws, weekends, 8 hour workdays, breaks, you name it... employers have never given any of this freely along with productivity gains

it's strange that all these articles about how much we're working don't even peek into the history of how our current structure was formed

the current productivity gains have mostly been captured by the richest, and everyone else is competing against each other for the scraps... if you choose to work less, you are out-competed and lose your status (guess what kind of groups can help avoid this!)

The "we" in this is a missing a piece: the size of the labor force. It's shrinking. Has been for 20+ years, with a peak around 2000.

Some people are working hard. The growing demographic is the retired, the trust-funded and those NEET-ing around on various forms of subsistence income. Another few years we'll be back to post-war levels ~%58 of participation, where two-parent homes prevailed, and one stayed home.

Answer: People are reluctant to live in 2026 the way they did in 1973.

The additional compensation is a statistical artifact that accounts for air conditioning, iPhones, reliable cars that last 20 years, the Internet, etc.

Do you really need a whole essay to answer that question? The answer is super obvious: supply and demand.

The fact that we can do in 16 hours what we used to in 40 doesn't suddenly mean that people are only willing to work 16 hours.

We work hard for billionaires (directly or indirectly) so that we have money to pay the billionaires and their many subsidiaries.

Imagine how much time people would have to be angry at our politicians about injustice, corruption, wealth disparity, the climate etc if people only had to work a few hours a week!

My god, they might even become actively engaged in politics. The horror!

EDIT: Being downvoted, cannot reply for 10 more hours.

We still work hard and will continue to do so because we are conditioned for the first 21 years of our lives to work hard at school.

21 years is a third of your productive life, a time when you body still works reliably, can repair itself rapidly, you have very little responsibilities and thus can take more risk and explore the frontiers of possibility.

The math teacher tells you to write out twenty tables of addition, so you do it.

The chemistry teacher tells you to balance out fifty chemical equations, so you do it.

The English teacher tells you to write out 500 word essays to explain why Sherlock was not a villain but just misunderstood, so you do it.

If you question why, you fail.

If you question is there's a better way to demonstrate the understanding, you fail.

If you refuse to do these assignments and start a lemonade stand, you fail.

Thankfully working hard is getting disrupted. An LLM doesn't sleep, take breaks, fall asleep after three 6 hour shifts or take sick leave. Nothing works as hard as an LLM and even basic LLMs that can run on commodity GPUs with 6GB of VRAM can write out twenty tables of addition, balance out fifty chemical equations and argue both for and against why Sherlock was a villain.

People will argue that balancing out fifty chemical equations and writing out twenty tables of addition is necessary to gain the foundation necessary to do more abstract tasks.

That to be an effective writer, you need to read two works of Shakespeare and critique in a manner that appeals to your teacher or the AI that grades your writing assignments. People who never got to do this are idiots and their writing is just garbage, unfit for human consumption.

That to be an effective Front End developer you need to code in x86 assembly.

That you need to understand quantum physics before you can design your first semiconductor circuit. I would like to save those debates for another day.

But people actually don't give a s*it if you work hard or not!

They only care if you're giving them value for either their time or money.

Those who don't realize this will keep working hard for those who will put them to work. Those teachers will keep joining unions and complaining they don't get paid enough while they will reject the truth, the reality of why them working so hard isn't translating into a situation they like.

Jesus, they figured out that who owns the means of production is going to own everything, and somehow made it sound like some kind of grand revelation. my brother in christ, Karl Marx figured this out more than a hundred years ago.

and all they have to say is? land value tax and tax on spending??? LVT is fine but let's be honest is going to do fuck all, spending tax is literally a tax on the poor. how dumb (if not malicious) can you be? if a revolution is too unpalatable for you, at least say wealth tax. it's just two simple words, in that order, it's not that hard

One of the greatest cons in history has been to convince workers to allow companies/shareholders to capture all of the benefits of increased productivity gains

It has over time negated the gains that workers had made (through much campaigning, protests, strikes, and the threat of social upheaval during the Great Depression) to earn a greater share of the output (through higher wages, work week limits, etc.)

if we didn't have insane inflation, perhaps even some deflation, we'd be working 15hr weeks because everything would be more affordable. ah well.

I was reading this and a question came up. It ultimately works under the premise that there is only one ticket — so the conclusion is that the ticket must be ownership.

But if machines produce more, couldn't the state provide free services rather than cash? In kind provision could be less dependent on wages than taxation is.

Then couldn't we divide the monetary system further — not as banknotes, but by subdividing it? Would the administrative system be too difficult after all?

In other words, if the problem is that only the "wage" earned for participating in production grants the right to consume, then shouldn't tickets to the means of production also be distributed?

Still, no matter how I think about it, in the end it comes down to the problem of distribution. The OP also gives capital ownership as an example, but...

If automation can enable substantial production without human labor, then what on earth is the reason we should keep demanding that humans do wage labor for survival? I find myself thinking about this a lot these days.

Someone who did not participate in production can consume the product because they own capital. Then what is the basis on which that right arises?

In fact, economic logic, when you think about it, seems to be mostly a kind of circular reasoning. It says "capital's share equals its marginal contribution," but that market itself is ultimately something created by power.

Sometimes I have thoughts like this. In fact, the core of capitalism is the ownership of the means of production, and such ownership will keep accumulating ever-widening disparities. If automation keeps advancing, humans will eventually become unnecessary — and then how will the market be maintained? We cannot give everyone a claim on automated production. In the end, a ruling class and a ruled class will inevitably exist, and the question becomes how the ruling class can rule entirely with the consent of the ruled. Lately, it seems this principle no longer works in capitalism.

If working people in industrialized society weren't artificially kept indebted and poor (relative to the wealth they should have), then it would be impossible for the rulers to control the population, and they would loose their power.

A ruler will always prefer to rule over 100 wretches, than be an equal with 100 peers. And people all over the world have been bred to submit by relentless head stomping by family, school and media.

But the current order will end without violence and be forgotten as foolishness, just like the spell of the feared Soviet terror regime ended as if people woke up from a dream. Just like the strangle grip of popes, priests and monks ended and is now the source of ridicule. Our children's children will look with nothing but disgust at how the current population worship "governments", "authorities" and so on - all of these illusions made up of some of the least admirable people alive.

The stagnant wage graph reminded me of this compilation of graphs:

https://wtfhappenedin1971.com/

Someone from the shadow wizard money gang will have to chime in and explain how this is all actually a good thing ;)

These yachts don't build themselves, you lazy sluggards!

There is no point in working hard at all. It gets you nowhere.

Because we are free range tax and labor slaves.

The greatest consumer of wealth is the eternal war (cold, hot etc) between princes. It's appetite is limitless. We will be fed exactly what we demand and not a crumb more. No matter how excellent our labor.

Because the people in charge of deciding which work should be done have decided that we should spend every waking hour making them more powerful. Next!