Quote of the Day (John Webster, on the Treacherous Nature of Prosperity)

“Prosperity doth bewitch men, seeming clear;

  But seas do laugh, show white, when rocks are near.”—English Jacobean playwright John Webster (c. 1578 – c. 1632), The White Devil (1612)
 
Only a couple of years after William Shakespeare’s younger colleague in the London theater community, John Webster, passed away, Europe witnessed what is believed to be the world’s first speculative “bubble”: the Dutch Tulip Mania, in which investors bought flowers not for their beauty, but for the thought that their prices would continue their upward climb.
 
If only Webster, with his concern for intrigue, corruption, and revenge, could have lived to see that! But he might have had even more material for his macabre tragedies if only he could see how corporate CEOs are now gauging the possibilities associated with high tech, including robotics, artificial intelligence (AI), and cryptocurrency.
 
As the American journalist and podcaster Derek Thompson noted in early October, it’s estimated that tech companies will spend about $400 billion in 2025 on infrastructure to train and operate AI models. Investor and author Paul Kedrosky told Thompson that he expected that AI would represent “a diversion of capital away from manufacturing in the United States” similar to the impact of the telecom industry on manufacturing in the 1990s.

Yesterday, Alex Carchidi of The Motley Fool, observing that recent troubles faced by Bitcoin don’t yet qualify as a “crash,” still pointed to disquieting trends that have fueled bearish forecasts, including the Trump administration’s trade policies, naggingly high inflation, the government shutdown, and the uncertainty resulting from the government’s late release of critical economic data.

Even if all the productivity gains predicted in the wake of AI come to pass, who will buy the resulting goods and services if people are out of work? An August blog post from the Federal Reserve Bank of St. Louis suggests that “we may be witnessing the early stages of AI-driven job displacement. Unlike previous technological revolutions that primarily affected manufacturing or routine clerical work, generative AI can target cognitive tasks performed by knowledge workers—traditionally among the most secure employment categories.”

In Donald Trump, tech billionaires have a President ready to do whatever he can to loosen oversight that they believe unduly restrains them. They may come to regret deeply their unruly greed.