Ray Dalio WARNS About The Dangers Of UBI

So welcome back to Post AGI Economics. Today I'm going to be taking a look at some of the key stories that will determine how the economy is shaped and basically guiding you guys a little bit on some of the future decisions you might want to make. Because some of the stories here are going to shape, inform you about what's to come in terms of how the economy is going to be in the future and how certain things are developing on the economy side of AI, relating to jobs and people's livelihoods. So one of the things that Larry Summers has recently said, and if you aren't familiar with Larry Summers, he is someone that sits on the board of OpenAI and he has a very good insight within to what is coming. And recently he said that studying coding is a bad idea and instead young people should learn to work creatively in a group and define purpose because AI is coming for IQ before it comes for eq. Now I'm going to show you guys this clip and then I'm going to give you guys my thoughts because it's a rather interesting statement to make. But I do think it is one that is still up for debate. But there is a lot to be said.

I would be telling my grandchild not to go study coding. I mean, we used to say it was only 15 years ago that you were, everybody was supposed to learn how to learn how to code. You know, when, when I got my driver's license, my father told me I had to learn to fix a car. I had to learn to change a tire and jump the car and change the battery and whatever the hell. You never knew you might have an accident and you'd have to fix your car because like, what were you going to do? Well, you know, like I certainly never told my kids that. And I certainly can't do any of those things because the world kind of figured out how to do it. So you didn't have to learn to do that yourself anymore. Just like you don't have to learn to use a slide rule anymore. You don't have to learn to calculate a square root on a piece of paper. Coding is going to be like that. Super high level genius new artificial system is going to be, not going to be like that. But you know, coding the data system for coding the data system to keep track of when reservations are going in and out of this hotel. That is not, that's going to be a task that a machine is going to do and the person's not going to have to. So studying coding, bad idea. Studying how to Work in a group on an act of creation and defining purpose. I think that's going to be hugely important. I think the one sentence line would be AI is going to come for IQ before it comes for E. Now.

This statement isn't something that we've heard the first time in the sense that AI is going to come for cognitive labor before it does come for any other kind of labor. Because the way how AI has been developed is that it is currently working on its cognitive capabilities and that is advancing at a rate which is far. I personally do actually agree with the statement that if you are really young, that, you know, when Larry Summers says do not say study coding, that you know it's right. I don't believe that. You know, if you're extremely young, like maybe if you're in high school or maybe if you're, you know, let's say you're around 10 years old, 15 years old. Around that age studying coding might not be the best career choice. Now I know that might seem like a very controversial opinion and I do know that things do change. Previously there was a statement, for example, in 2016 the famed researcher Geoffrey Hinton, who used to work at Google, actually said something pretty crazy. So he said that if you work as a radiologist you are like Wale E. Coyote in the cartoon. You're already over the edge of the cliff, but you haven't yet looked down. There's no ground underneath. People should stop training radiologists. Now it's completely obvious that in five years deep learning is going to do better than radiologists. And you can see that eight years later we still employ a large number of radiologists and this is the field that isn't really affected by AI. So the is the point here is that whilst yes, it is pretty hard to make predictions, I do think that this time it is a little bit different. And of course there is nuance into that because there could be this AI hype bubble which I'm going to cover in another video. But I do think the blanket statement is that maybe starting a career in coding right now might not yield the best results. Now of course with coding and stuff like that, there is a lot more than just pure code. For example, software developers do a lot more than that. So those are those other skills that you can focus on and you're and can become a more well rounded individual. But we do know that the main purpose of many of these different software companies like Factory and the Droid, if you don't know what I'm talking about, these companies are essentially working on building autonomous software AI agents. And so far they've made rapid progress. We've seen since the rise of Devon almost every two weeks. I would say the benchmark has gone up around 2%. New methods keep going on. I mean, if we look 10 years from now, will there still be human coders? Possibly. But it is a thing where you're looking at people who are just starting out and I'm talking about people that, you know, aren't even ready to train yet. If you're already in that field, there are many different things you can do with that skill set. But I do think that one thing that you should take away with this, whether or not you start coding, whether or not you stop coding. I'm going to leave some resources for you guys down in the comment section below. And this is something that I did talk about with my post AGI economics community. But I think that EQ is going to become vastly more important because whilst yes, AI systems can detect human emotions and superhuman systems are going to be able to, you know, talk to you, the one thing that you have over these AI systems is that they fundamentally aren't human. So they don't have any human experiences. They just can't empathize with you the way another human can. So unless AI robots suddenly gain the ability to have memory and walk around and you know, experience emotions like we do, they then it's just not something that is, you know, favorable for the AI system. So I know there's going to be a lot of different comments on that. But I would say that even if you don't want to stop studying coding or you think this is complete hogwash, I would say definitely look at eq and if you ask someone that's maybe a little bit more introverted, your EQ skills do help you a lot in the corporate world anyways. So I do find that, you know, this is something that you should be paying attention to Anyways. There was also the Future of Life Institute. They are basically raising, you know, not raising, they're offering up to $4 million to support projects that work to mitigate the dangers of AI driven power concentration and move towards a better world of meaningful human agency. So essentially here what they're focusing on is they're basically stating that, look, we know that AI is going to have a lot of impact. These are the people that did also do that pause AI training where they wanted to pause the level of AI abilities because they just essentially thought that the rate of pace was pretty much unsafe. Essentially what they are stating here is that the ungoverned acceleration of AI development is on cause to concentrate the further bulk of power amongst a vast small number of organizations, corporations and individuals. And he's stating that this would be disastrous for everyone. It also states here that power here could mean several things. It could mean the ownership of a decisive proportion of the world's financial labor or material resources, or at least the ability to exploit them. It could control the public attention, the media narratives, or the algorithms that decide what we receive. It could simply be a firm grip on political authority. And power has entailed some combination of the all three. And this isn't good at all. In any kind of scenario when there is extreme power concentration, it just corrupts people because humans are inherently flawed. And this is not something that you want to see. But the problem with AI is that AI allows for a completely new reality in which the person in power can stay in power forever. Because if you have some kind of super intelligent AI that's allowing you to make ridiculous level decisions and decisions that your enemies just simply can't keep up with, then you pretty much win every single time. And even if that isn't the case, we have to talk about the fact that, you know, the labor or even material resources over a long period of time is going to exacerbate the already wide wealth gap. And basically what that means is that if you think about a company like OpenAI and all of the top tech companies, I mean, all of those companies are going to own the foundational models. And to some extent, when they rent these models to other companies or other smaller companies at some time, these models are going to be so good that OpenAI recently even stated that they're going to be having a system that could potentially be its own organization. So what happens when OpenAI, Anthropic and Google have their own AIs that are AI agents that are able to spin up 10,000 agents and go and create a digital company that's able to completely decimate a market and just rack up in the profits. Because conversely, if you're a human operating in that market and remember guys, you might think, oh well, the humans could just use the AI. The thing is that OpenAI doesn't have to release any of these products. OpenAI could just stick with their products and, you know, use those technologies to gain even more power. That's something that, you know, you're not really thinking about, and it's something that it's on the tail end of the technology. We're talking about here, but it is a real possibility. So this is the thing where, you know, you have a select few that could potentially be in such power that this is going to be drastically different for the future. And we've all seen what dystopian futures look like where we have a super elite rich class and then we just have people who are in uttermost poverty and they have no social mobility. One thing I've spoken about that is quite bad in a future that is completely dystopian is the lack of social mobility. A quick example I'm going to give you guys, and I'm not trying to be too dumaresque, but I'm just stating that this is a possibility if there aren't regulations around certain things. Let's say, for example, you're someone who's 10 years old, you were born into a super dystopian society where OpenAI, Microsoft and Google just own all the AI models. Those companies could literally create companies that are very effective at doing everything in large parts of the economy. Now you might be thinking, okay, I can get a good job and I can work hard and I can do better for myself. The problem is, is that in a world where AI does absolutely everything, human labor just has no value because AIs are going to be better than humans at essentially everything. Now of course you could say, well, go become a carpenter or whatnot. Some people have physical disabilities. There are many different other issues that are at stake there that most people aren't thinking about. So this is something that I think is really important. And you could see here that, you know, there is even, you know, Orwellian levels of surveillance where you have a godlike AI system that's able to see everything that's going on in a society. Of course you could have AI level systems that are able to persuade humans in certain political campaigns, you really wouldn't know what's going on. Imagine you've got mid journey level video where the truth isn't the truth. You're not able to realize what's going on because the governments are able to really police things in a way that we haven't truly seen before. So this is going to be a really big problem in the future. And I'm wondering how, you know, regulators are going to break up the big tech monopolies because it's not like every company can go out and start their own, you know, foundation model. Unless in the future there's some new easy way for everyone to start training their huge models. This just isn't easy at all. So it's only like a few companies with the billions of dollars and infrastructure can do that anyway. So I kind of wonder how this goes on, but I do think it is really important to read through because it kind of highlights some of the issues that most people aren't aware of. And I think it's a good read with regards to how the future is going to go. Now. Billionaire Ray Dalio thinks universal basic income is no magic wand and apparently may even do more harm than good. So Ray Dalio cast doubt on the idea of universal basic income on the Lex Friedman podcast in 2019. He warned that cash handouts could fuel bad habits and defund superior social programs and programs with proven outcome that boost productivity are a better bet. So he's basically stating that he doesn't really believe in it. But I'm going to show you guys a short interview from the clip because this is not a popular opinion that most people do hold in the UBI space. But I think it's important to share his opinion because he is someone that is truly wise. If you've ever read his book, it gives an insight onto how societies grow and fall. So I think his insights are pretty valuable.

You're at a point where the machines and the automation will probably do it better and that's accelerating and that's a force. And that's a force for the good. And at the same time, what it does is it displaces people in terms of employment and changes and it produces wealth gaps and all of that. So I think the real issue is that that has to be viewed as a national emergency. In other words, I think the wealth gap, the income gap, the opportunity gap, all of those things, that force is creating the problems, pursuits. Before I get right into my thoughts on universal basic income, I want to start with the notion that opportunity, education, development, creating equality so that you people say there's equal opportunity is the most important thing. And then to find out what is the amount, how are you going to provide that? How do you get the money into a public school system? How do you get the teaching? How do you. What do you the fleshing out that plan to create equal opportunity in all of its various forms. If you put it in the hands, let's say, of parents who know how to do the right things and make the right choices for their children because they're responsible, and you say I'm going to give them $1,000 wiggle room to use for the benefit of their children. Wow, that sounds great. If you put it in the hands of, let's say an alcoholic or drug addicted parent who is not making those choices well for their children. And what they do is they take that thousand dollars and they don't use it well then that's going to produce more harm than good.

Siri Dalio's opinions on ubi, I think they are the most insightful because he doesn't just give this, you know, lovey dovey thing like oh, UBI is going to solve everyone's problems. And I think that's the picture we're starting to get that the future that many envision, including those who are looking at the observation economy, some of those who are truly intelligent individuals that have just far more wisdom than you could imagine, they are all stating that ubi, whilst yes, it is a solution that can work in the current economy, the final solution is going to be a little bit different. Like the final solution may not be universal basic income, it may be universal basic standard of living, universal basic healthcare, universal basic, you know, it's very hard to speculate on what it may be, but we do know that universal basic income is something that potentially may not work in the future. Now it's for a variety of different factors that Ray Dalio has talked about, but essentially the point is that as the future gets more and more automated and whilst yes, right now we're not seeing large scale automations, I do think there are some second order consequences from the likes of these AI systems, such as the fact that individuals might not choose to hire people that they previously would have. Now that these systems are in place, I think the question is going to continue to grow as the capable systems get more and more capable. So I do think that this opinion is a bit different. And at first read, when you do read this article, it just seems like you have this billionaire who's basically saying that UBI won't work, people are going to spend it on drugs. But what he's actually saying is that if you're actually going to budget this and you take the budget out of social housing programs, welfare programs, it's like you have to make sure that it actually works and that you don't just give money to a drug addict. And he's not saying that that's what's going to happen, he's just basically saying that, look, we need a solution that not only takes care of those who are disproportionately affected, but also doesn't exacerbate existing issues with individuals that are already causing problems for their own life. And I do Think that one of the craziest things that he talks about, he says that, you know, the wealth and opportunity gap is the greatest threat. And like I said before, I do think this is one of the biggest gaps that most people are currently missing, because it is one of the things that makes the Western countries great, is that you can succeed if you do put your hard work in. But I do do wonder if in the future that will be true. So then we had this story here, and I think this is going to be one of the more interesting ones because this is a little bit futuristic, but we've seen that factories are starting to get highly efficient. And one trend I want you guys to focus on as you look at the economy and as you're in the AI space, because I like to pay attention to both sides of, you know, of course, not only the tech, but how it affects careers, people, their livelihoods, and those other kind of things so I can position myself best is that I do think companies are going to become smaller and smaller and do more with less human labor. And that's a trend that we're going to continue to see. And China's great at building factories. If you've ever seen them build companies, you'll know that they can build them a lot faster than the United States can. And we're not going to talk about regulation and those kind of issues in the United States. But the article here is that Xiaomi unveils a new autonomous smart factory that operates 24. 7 without human labor. So this is a factory that's going to pump out 10 million phones per year. And this, you know, as you can see right here, it's what a worrying sign of things to come. Chinese phone maker Xiaomi has built a new autonomous smart factory that can only make 10 million handsets per year, but can also identify and correct production issues while optimizing the Italian process. So this is an automated mass production facility. And I think right now this is something that is, you know, pretty amazing considering the current technology. And what's crazy, I mean, just look at this. It says the Factory can operate 24 hours a day without people on the floor. And it's a 24,7 factory. Now, of course, these factories aren't new, but can we wonder at what rate this is going to continue to happen once we start to get humanoid robots that are quite effective? And for those of you who are skeptical of how these humanoid robots are going to be even working in factories, you do already have companies like Amazon that are trialing humanoid robots to free up staff so this isn't something that is out of the question. Tesla are already trialing their humanoid robots figure have recently demoed their robot at BMW to be on the production line and to automate certain tasks. So this is the trend of where we're heading. I do think you know, maybe not autonomous factories but certainly not as much people as we do now, especially once humanoid robots takes off. But let me know what you guys think about this. I think you know all of these stories are pretty interesting as always. Now if you want to discuss these topics a lot more, I do have a school community here. This is where I discuss my post AGI framework how you can actually thrive in the AI era not get automated and protect your career. My personal strategies for generating an income with AI. And of course in the AGI investment section you get access to the 22 page guide that shows you how to invest in all of the emerging sectors related to AI, especially some of the ones that most people haven't realized.