Weekly I/O #40

Weekly I/O is a project where I share my learning Input/Output. Every Sunday, I write an email newsletter with five things I discovered and learned that week.

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The below is extracted from the email sent on May 01, 2022

Here’s a list of what I’m exploring and pondering this week.

1. Moore’s Law for Everything: Everything will become half as expensive every two years due to exponential technological progress and AI lowering cost that requires labor.

Article: Moore’s Law for Everything

In this article, Sam Altman painted the future where the AI revolution will generate enough wealth for everyone to have what they need under responsible societal management. The revolution is still primitive, but the trends are clear. As the CEO of OpenAI, Sam Altman definitely should be optimistic about AI. But I think the trends are even more evident at this point. Seeing what DALL·E 2 and GPT-3 from OpenAI can achieve makes Sam Altman’s opinion not just too optimistic. Below is his point:

Technology progresses exponentially. We have no smartphone 15 years ago, no home electricity 150 years ago, no industrial machines 1,500 years ago, and no agriculture 15,000 years ago. Sam Altman argued that technological progress in the next 100 years would be more significant than all we’ve made since we first controlled fire.

There are two ways to afford a better life: earn more money or the price fall. The latter is better for increasing societal wealth since everyone is wealthier where wealth is purchasing power. Technology has already decreased the price in many categories. For instance, chips became twice as powerful for the same price almost every two years for decades. This is Moore’s Law.

Prices for TV, computer, and entertainment have dropped over the past decades, but other costs such as housing, healthcare, and education have risen significantly. Optimistically, AI will also lower the cost of most services because labor is the driving cost and AI should free up most labor. Therefore, Moore’s Law can be applied not only to semiconductors, but to everything. Purchasing power will be twice as powerful every two years.

2. Capitalism for Everyone: Let everyone benefit from capitalism as an equity owner by taxing companies in shares and distributing ownership and wealth to citizens to align incentives.

Article: Moore’s Law for Everything

Building upon the assumption that Moore’s Law will be able to apply to everything with AI advancement, Sam Altman proposed an intriguing economic system.

A stable economy requires two components: growth and inclusivity. Capitalism is an effective incentive system for driving economic growth and creating technological gains. However, the price of progress from capitalism is inequality.

The traditional way of progressively taxing income to address inequality hasn’t worked well. And Sam Altman argued that it would work much worse in the future.

“It will work much, much worse in the future since many of those jobs won’t be ones that create a lot of economic value in the way we think of value today. As AI produces most of the world’s basic goods and services, people will be freed up to spend more time with people they care about, care for people, appreciate art and nature, or work toward social good.”

Because the best way to improve capitalism is to let everyone benefit from it directly as an equity owner, he wants to use taxes as the opportunity to redistribute ownership and wealth to all citizens. The two main sources of wealth in the AI-dominant future will be companies (especially those leverage AI) and land (fixed supply).

Therefore, Sam Altman proposed a very interesting system: The American Equity Fund. The Fund would tax all companies above a certain valuation of 2.5% of their market value each year, payable in shares, and tax 2.5% of the value of all privately-held land, payable in dollars. All citizens over 18 would then get annual distribution into their accounts and use however they want in dollars and company shares.

Taxes on company shares rather than profit should align incentives between companies, investors, and citizens. Companies’ profits can be disguised and often disconnected from their share price. However, everyone who owns a share in a company wants the share price to rise.

As to privately-held, the value of land appreciates because of the work society does around it (network effect, public transportation, community), and it’s fair for that value to be shared with the larger society that did.

Ideally, if everyone owns a slice of American value creation, everyone will want America to do better. Therefore, the collective focus will be on making it “more good” instead of “less bad”. As Sam Altman said:

“Simply put, more good means optimizing for making the pie as large as possible, and less bad means dividing the pie up as fairly as possible. Both can increase people’s standard of living once, but continuous growth only happens when the pie grows.”

3. We shouldn’t follow the people we most admire. Instead, we should follow what they admire.

Podcast: Patrick Collison: Earning Your Stripes [The Knowledge Project Ep. #32]

I first learned this from the Japanese poet Matsuo Bashō’s quote: “Do Not Seek To Follow In The Footsteps Of The Wise, Seek What They Sought.” And in the podcast interview, Patrick Collison said that we shouldn’t follow the people we most admire but should follow what they admire. Sometimes finding out who influences the people we admire and what’s upstream can be more valuable. This also reminds me of Weekly I/O33.4 about Peter Thiel on Mimetic Theory:

Peter Thiel suggested that we should be careful who we copy. If we want to follow a role model, find somebody in a different stage of life that we won’t compete with. In David Perell’s words, “If you’re going to model a famous writer, pick a dead one such as Tolstoy or Hemingway”.

4. “Our bodies are apt to be our autobiographies.” — Gelett Burgess

Quote

This quote from Gelett Burgess reminds me of the very first Weekly I/O #1.3: “Your skin summarizes your life’s conditions.”

5. I will have to remember, ‘I am here today to cross the swamp, not to fight all the alligators.’

Book: The Art of Possibility

This is the quote from The Art of Possibility by Rosamund Stone Zander and Benjamin Zander.

That’s it. Thanks for reading and hope you enjoy it. If you would like to receive the content every Sunday, sign up below 😎

Voracious learner | Software developer | Cornell Tech student | Better Medium Stats: bit.ly/2RH8Jsf | Medium Articles List: chengweihu.com/blog

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Voracious learner | Software developer | Cornell Tech student | Better Medium Stats: bit.ly/2RH8Jsf | Medium Articles List: chengweihu.com/blog

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