Jevons paradox predicts that AI, by making many tasks dramatically cheaper, will increase total demand for those tasks and create new industries around them—just as cheap imaging increased radiology demand and cheap cloud computing created DevOps.
Gary Tan is right that AI will spark massive expansion in many fields. But commenters to the video correctly warn that Jevons paradox only holds until we hit demand saturation or broader system bottlenecks, and AI is unique because it simultaneously automates every link in every knowledge-based value chain.
As AI lowers the cost of cognition itself, humans — not compute — may become the limiting reagent. That means efficiency gains may create new opportunities in the short run, but long-term labor compression, industry consolidation, and economic restructuring are likely unavoidable. AI will expand the economy—but it may not expand the need for human workers at the same rate.
stevenjgarner•2mo ago
Gary Tan is right that AI will spark massive expansion in many fields. But commenters to the video correctly warn that Jevons paradox only holds until we hit demand saturation or broader system bottlenecks, and AI is unique because it simultaneously automates every link in every knowledge-based value chain.
As AI lowers the cost of cognition itself, humans — not compute — may become the limiting reagent. That means efficiency gains may create new opportunities in the short run, but long-term labor compression, industry consolidation, and economic restructuring are likely unavoidable. AI will expand the economy—but it may not expand the need for human workers at the same rate.