This is an interesting article. Rao proposes the idea that the current AI-is-gonna-take-all-our-jobs panic that is seen in some quarters is a form of zero-sum, mercantilist thinking.

Referencing Joyce Appleby’s The Relentless Revolution: A History of Capitalism, Rao gives a nice summary of how Appleby (and I suppose Rao, too) characterize the mercantilist view:

This as opposed to a more positive-sum view of trade that might define capitalism (defining capitalism seems to be a difficult enough task for even the best of us: #1416952)).

Rao suggests that we are making the same mistake as the mercantilists of yesteryear when we think about intelligence:

Now replace wealth with intelligence, and mercantilism with cognitive mercantilism.

The parallels are almost embarrassingly direct.

First, intelligence is imagined as a fixed resource embodied in human brains and the knowledge products mined from them. The objective of national and corporate strategy becomes attracting the best brains, controlling their output, accumulating intellectual property, and maintaining a favorable balance of knowledge trade. The cognitive mercantilist wants to hoard intelligence and its products like bullion. The global competition for talent becomes a treasure hunt for genius brains and the valuable knowledge species they can produce, which now includes AIs in addition to copyrightable culture and patentable inventions.

Second, supposedly stupid people cannot be trusted to think for themselves. They need to be governed by cognitive elites, who know better and must regulate the behavior of the less intelligent for their own good. Democratizing intelligence is dangerous because the masses will misuse it, fall for nonsense, or unleash chaos. The assumption is that intelligence is safe only in the hands of those already certified to possess it.

Third, the supply of intelligence is treated as the central economic fact. Controlling its production, preserving its scarcity, and maintaining high prices for brains and knowledge products (including AIs) are the primary concerns. The demand side barely registers. Less intelligent people are regarded as limited cognitive laborers and passive consumers of whatever knowledge products elites choose to provide. They are not imagined as significant sources of demand for intelligence in their own right, let alone as participants in its further production.

Fourth, the cognitive mercantilist assumes that most people are not good for much intellectually. If 80% of humanity is occupied in low-grade cognitive labor, or simply muddling along without producing much intelligence at all, that is unfortunate but natural. Automating their cognitive work merely threatens to create billions of useless minds to occupy.

There was a time when most of humanity was involved in producing food but technology has drastically reduced the number of people needed to feed us all:

The agricultural revolution that helped launch capitalism began overturning the apparent necessity of having most of humanity engaged in farming. Over the following centuries, improvements in agricultural productivity reduced the fraction of the population required to produce food from a large majority to a tiny minority in advanced economies.

The result was not a world full of useless mouths. It was a world in which vastly more people could do things other than farm, while enjoying access to vastly more food.

We seem, though, to have found uses for all the food we can produce...and then some. And so the same might be true for whatever the product of LLMs is:

"The crucial economic question then becomes not how much intelligence people can produce, but how much intelligence they can find uses for."

what if that demand is as elastic, inventive, and historically transformative as the demand for material goods turned out to be? What if the apparent surplus of human minds is an artifact of our inability to imagine what people might want to do in an intelligence-rich world?

Rao's argument begins to sound a little like the somewhat cliche: "it's gonna free us up from drudgery to do all sorts of wonderful things!"

Abundant AI changes that calculation. Someone who previously had little reason to think hard about a problem may suddenly discover that a modest investment of attention unlocks enormous possibilities. They can build something, investigate something, understand something, or pursue an ambition that was previously out of reach.

But if I have to choose between the vision of AI taking everyone's jobs and killing us all, and the vision of AI inducing a huge wave of demand for new things that humans might do, I think the latter is more likely.