Tech Tycoons have actually Got the Economics of AI Wrong

Even as economic growth was just removing, some economic experts were currently pessimistic. Coal, composed William Stanley Jevons in 1865, is “the mainspring of contemporary material civilisation”. Yet it was limited and would soon go out. Although more could be discovered by digging deeper, it would be increasingly costly to extract and these higher costs would minimize the competitiveness of Britain’s producers. After all, in other nations the black fuel was still in sight of daylight. Efficiency gains-using less coal to produce the exact same quantity of stuff-would not save the country. Indeed, cleverer use of restricted resources would just offer a reward to burn even more coal, which would, paradoxically, lead to an even faster use of British reserves. There was no escape, the Victorian economist believed. Coal would be exhausted and the country was likely to “contract to her previous littleness”.

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This short article appeared in the Finance & economics area of the print edition under the heading “Rocked by DeepSeek”

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Tech tycoons have got the economics of AI wrong

From the February 1st 2025 edition

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