I’m preparing for a course I am teaching, so am intending to start regularly writing on the blog as a way to livestream my thoughts. Hopefully, I will maintain momentum for a long while. My first thoughts, while reading Nordhaus’s singularity-themed discussion of AI, was about how it would always be useful for such discussions to repeatedly note that “the economy” means “the value of output using prices” and that when it comes to information technology where prices are often zero, it is easy for the text to carry on with analysis as the reader slowly remembers (lagging thought) that results may be happening because prices have gone to zero and so that sector is no longer in “the economy.” Consider, for example, the “service” of communicating with other humans. At one point in human evolution, the “cost per communication” may have been quite high. A proto-human had to have significant neural capability, perhaps driven by substantial consumption of proteins, or substantial attention from a caregiver who then was not gathering or hunting, for them to be able to send and receive signals to other proto-humans. Over millennia, productivity in this activity (both a production input and a consumption good) increased substantially. By how much did “the economy” grow? Suppose that at 1 million BC, hominids were gathering and hunting and had 100 signals in their vocabulary. Signal combinations were not interpretable, imagine (no syntax, no grammar). Over the following 990,000 years (until the Neolithic Revolution) we got to symbols (“cave drawings” and marks on stones and clay) with complex meaning, likely reflecting a similar complexity in ordinary human (rather than ruling class) capabilities for symbol mental manipulation. What was the growth rate in the productivity of communicating? Suppose hominids went from those 100 symbols to being able to retain or understand or interpret or extreme 1 million symbols or concepts (example: in English, all children understand that “a running angry black dog” is not quite the same as a “black angry running dog”)? This is a phenomenal increase, but at the time scale concerned (close to 1 million years) is a very small annual growth rate (.001% growth per year). An economist who measured “the economy” however, might, for enormous swathes of humans, see them engaged in the same production activities (gathering, hunting) and not measure this change.

To take another thought experiment, suppose that there were other intelligent entities in the galaxy, who understood quantum mechanics a million-fold better than we do currently, and through their understanding sent us a little button that we could press and be instantly teleported to a specially constructed view-zone on their planet or interstellar vehicle and we could “observe” something. We could spend hours or days doing this, with only the opportunity cost. From the GDP perspective, this amazing and completely new good might count for less than a new Lady Gaga album and concert tour. “The economy” may barely change. And if you’re thinking, “But surely the experience of quantum jumps through the universe to see alien life would revolutionize human society,” well, I also have a bridge for sale, cheap.