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.
