Cowen's final remarks about cost of living and GDP are quite interesting, starting at about 20:35:
You look at a household budget, this is not controversial, but people basically spend on rent, food, maybe education, maybe health care, right? So let's talk through those.
Rent. There's nothing in AI, no matter how good it is in the tests, that's going to lower your rent. In fact, it could be that AI makes living together with other smart people more valuable. Rents in the Bay Area, London, a few places could go up. But there's no simple path toward AI somehow making it easier to build homes. The binding constraint is often the law. It's not really the price of construction. So rents are not going down anytime soon. Huge part of people's budget. So the effect of AI on rent for the foreseeable future does not improve living standards, I would say.
How will AI affect the supply and price of food? Again, food, everyone has to eat. One striking feature about the literature on economics of agriculture is that you can have very simple agricultural improvements and they do not spread geographically very quickly. So you look at the US and Mexico, for the most part, US agriculture is much more productive. There's kind of a free trade zone across US and Mexico, more or less. US and Mexico are close, plenty of people in the US speak Spanish, enough people in Mexico speak English. There's a lot of reasons why you might expect a lot of spread. There's been a fair amount of spread, but also really not that much.
So you can have great new ideas that can be way simpler than what AI will give you. And the amount of time it takes for them to spread to other parts of the world can be decades or even centuries. It's not that there's no spread. But as AI gives us innovations, say something genomic that makes food production better, cheaper, more nutritious, fortified rice, whatever you think it's going to be, I think all that will happen. But the time horizon you need for it to make food truly cheaper for just a typical family in London, US, or for that matter, Mexico, I'm not sure food will really be any cheaper in the next 10 years. [...] It just takes a long time to get ideas put into practice in agriculture. So two biggies, rent and food, we're kind of stuck.
Education, very different. This to me is super complicated. I would say we already have millions of people who are much smarter and better educated because of AI. There's nothing speculative about that. It's just self-evident. We have a lot of other people who use it to cheat, possibly they're stupider. I'm not sure. I think some of that cheating you learn from, but it's complicated in any case. And how far are we from a point where the existence of AI, say, makes 2/3 of high school students smarter and better educated? There, I genuinely don't know. I would say like there's some 5 to 10% who right now are just massively smarter and better educated. But to get to the 2/3 point, how long will it take us? I don't know, highly speculative. But it's not obvious to me that it's coming in the next few years. [...]
It won't, I don't think anytime soon, lower how much we have to spend on education. Like the price of tuition at Harvard or a state school, it's actually fallen a bit over the last dozen years in real inflation adjusted terms. I don't know that it will fall more because of AI. So that one is a question mark. I would say extremely asymmetric distribution, but possibly longish lags before it hits most people and even then they're smarter, but they still have to pay all this tuition. [...]
As I said before, on most things humans care about, the AI is already smarter than we are, and the AI being smarter on math Olympiad problems for the high schooler, it's irrelevant. You know, if I even compare like o3 and o3 Pro, I'm a PhD economist. If it got better than o3 Pro, like I'm not sure I would always notice. So we're at some frontier already, where making it better does not educate humans more. Although for all kinds of technical problems and bio, finance, trading, whatever, it'll be much, much better, more or less indefinitely. But for the humans, education, I would just say, is a big question mark.
And then there's healthcare, which I also think is quite different from rent and food. The way I would analyze that is I think AI, over some time period, I don't know, 30 years, 40 years, will basically cure everything. So I'm very optimistic about this. The work you're all doing, it's fantastic. I hope I live long enough to benefit from it. Just incredible. The Arc Institute, you know, in California. There's a lot of regulatory barriers. So for me, very little of that is a five-year thing, but definitely a lot in 20 years. [...] But in terms of your living standard now, I think it basically means there'll be more treatments and more medicine. So the percentage of GDP spent on healthcare, maybe goes up to 30%, which in my view is a good thing.
The end gain is you get to live to 97 and along the way you feel much better. It's what you should be spending your money on. But for your life, you know, up to age 80, say now you can expect to live to 82, you feel somewhat better, but there's actually higher health care costs because there's more treatments. So up until age 80 or something, like your living standard is not higher. Only when you start to get really sick is your living standard higher. So for the first at least 70 years of life for most people, you don't have higher living standards from better healthcare, your rent isn't lower, food is cheaper over some horizon, but maybe not that much. And then education is this complicated thing, but obviously anyone in this room will be much smarter and better educated because of AI.
Religion:
At about 38:40 TC observes:
But I think the AIs will be oracles of a sort and will blend religions more and not worry about that. So people will be like part Christian, part Buddhist, part something else, and that will just be natural, and the AIs will somewhat somehow intermediate these different ideas, and it will actually work well enough. So they'll all go up in status. But probably nominal monotheism, in fact, practiced as a kind of semi-polytheism with the AIs as oracles is what will really become more significant.
I believe Japan is a bit like that now. Individuals will draw on Shinto, Buddhism and Christianity for various aspects of their lives. I vaguely recall a NYTimes piece from some time about about elaborate weddings where all three traditions would be drawn on for the day.
Extra credit: Tantic and Christian readings of Shakespeare's Sonnet 129.
Out of touch.
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