In a piece I published a few months back titled “Abundance, Scarcity, and the Future of Work in an AI World,” I made the argument that there’s unlikely to ever be a world of unlimited abundance.
The reason? As something becomes abundant, things adjacent to it will seem relatively scarce given humans’ insatiable appetite for making progress in struggling circumstances. Much of my argument rested on the application of three theories that have been rigorously tested: modularity, commoditization and de-commoditization, and the law of conservation of attractive profits.
One implication of my argument is that we’re not heading to a jobless future in the age of AI.
I’m not the only person making similar arguments.
In his Substack post, “Plentiful, high-paying jobs in the age of AI,” Noah Smith (with a hat tip to David Deming for the reference) wrote:
“How can this be true? Well, maybe it’s because we invent new tasks for humans to do over time. In fact, so far, economic history has seen a continuous diversification in the number of tasks humans do.”
In response to Johannes Hoefler asking, “AI being a compute and energy dependent resource, will become exponentially lower cost just as microchips and solar panels have done when demand went up? What is left of your argument in reality, if the comparative advantage is not relevant anymore because of an abundance of AI?”, Smith continued:
“No. In fact, there is no amount of physical abundance that will make comparative advantage irrelevant here. The reason is that the more abundant AI gets, the more value society produces. The more value society produces, the more demand for AI goes up. The more demand goes up, the greater the opportunity cost of using AI for anything other than its most productive use.”
The natural question then is what will become relatively scarce?
As Alex Imas (with another hat tip to David Deming) posited in a post titled “What will be scarce?”:
“A lot of analysis takes the economy as given: there is a set of jobs and a set of goods/services produced by the economy. If the same set of goods/services can be produced by cheaper machines, then these machines replace humans and the jobs disappear. But the economics of structural change, combined with deep-seated features of human preferences, suggests something different: as people get richer, they don’t just want more commodities. They want things that aren’t commodities in the standard sense of the word. The social aspects of products such as the relationships, the status, and exclusivity—what Rene Girard called the mimetic properties of desire—become much more relevant once people’s basic needs are satisfied. And the demand for these properties will bring the human element back into the production process, and with it, the jobs.
If this is right, then AI won’t just automate the commodity economy. It will trigger the emergence of something new: a post-commodity economy, where a growing share of expenditure goes toward goods and services whose value is inseparable from the human who provided them.
The same economic forces that moved 40% of the American workforce off farms and into factories and offices will move workers out of automatable commodity production and into what I’ll call the relational sector. By this I mean the human-intensive, provenance-rich, sometimes artisanal part of the economy where the human aspect is part of the value of the good or service itself. The economics of scarcity won’t disappear, it’ll just relocate.”
I agree with Imas’s analysis that parts of the economy where the human touch is inextricably tied to the value of the service are likely to increase in relative scarcity—particularly those tied to origin, presence, and participation: knowing who did something, being there when they did it, and experiencing it alongside others. It’s why within Imas’s broader human-intensive sector, one category strikes me as particularly likely to gain value: synchronous, in-person human experiences. And one of the most obvious examples is live performance.
I’m not the only one who believes this. The enduring value of “iconic [sports] franchises and cultural institutions rooted in tradition, identity, and shared experience” is a reason why, for example, Josh Kushner’s Thrive Eternal bought the Los Angeles Lakers and took a stake in the San Francisco Giants.
But the premium attached to live events, as AI reduces friction in other parts of our lives, suggests to me that we won’t just want to be watching the best of the best in any given pursuit—which has long been a winner economically.
My growing belief is that there will be opportunities to build premium offerings and rich communities around local gatherings of athletics, the arts, and the like, perhaps even at the amateur level where there is rich talent.
As a result, we might see a renaissance with dollars accruing to a variety of performance types—and thus start to unravel the winner-take-all economies of music, athletics, etc.
The reason is that presence creates a different basis of competition. The best musician in the world can be streamed everywhere at once, but that musician can’t perform everywhere at once. A local performer doesn’t have to be better than the global superstar if what people increasingly value is being there—and with others.
One could argue that Disruptive Innovation is already leading to this unraveling. As economist Tyler Cowen quoted from The Economist:
“It might seem surprising, in a world of global stars, that the 6m Danes, many of whom are fluent in English, listen mainly to homegrown music. And until fairly recently they did not. In 2019 only five songs in Denmark’s top 20 were in Danish. By last year the figure was 18.
A similar trend is under way in other countries—and in other forms of entertainment. From Asia to the Americas, music charts are increasingly dominated by local sounds. Hollywood television-streaming companies are commissioning more local productions in foreign markets, causing consumption of American shows to fall. Social networks are connecting the whole world, but so far people are mainly using them to consume local content. And as video gaming expands, it too is becoming increasingly tailored to local cultures.”
This localization of culture isn’t itself evidence that live performance will gain in value. But it does suggest that digital abundance need not push us inexorably toward a world in which a handful of global superstars capture all the value in a sector. There are at least a couple of reasons to think live performance could push even further in the other direction.
For one, Columbia University professor John McWhorter worried in an opinion piece in The New York Times about whether artificial intelligence would have a similar effect as DEI or affirmative action—that is, “when a student submits a wonderful essay, I will never again be sure that it was purely a work of the student’s initiative, intelligence and talent.”
But one answer to questions around whether a good composition is the work of people as opposed to AI is to witness it live. In a world in which origin becomes harder to establish, live performance offers something increasingly scarce: I saw you do it.
Similarly, being in person with others transcends the obvious and amazing talents of AI and reaches that part of the human experience which has not heretofore been codified in artificial intelligence: namely the social and emotional realms that transcend language; context; the subconscious; and the senses beyond language and sight.
As the Christensen Institute’s Julia Freeland Fisher wrote in a piece titled “On lonely promises,” there are many things that can’t be replicated by AI that stem from direct human connection—things like coregulation that flows from deep connection with other humans.
Another, in my mind, is the collective effervescence (read more about it from Pamela Cantor, M.D.) that comes from being in a crowd taking in a sporting event or other performance (drama, music, improv, you name it) together and watching athletes or musicians or other performers meld their minds and bodies in a way one can experience but not necessarily describe.
In our Jobs to Be Done work, we often see that the reason why people hire different products, services, or experiences has less to do with their functional utility and more to do with the social and emotional energy they provide.
It’s like when we tell a friend, “You just had to be there.”
In an age when AI can create more and more experiences for us, perhaps the relatively scarce—and therefore increasingly valuable—experiences will be those for which we have to be there. And so, perhaps, we will, as we seek out—and pay for—in-person experiences and communities that feel relatively scarce.
