This is Brad DeLong's Grasping Reality—my attempt to make myself, and all of you out there in SubStackLand, smarter by writing where I have Value Above Replacement and shutting up where I do not… Bubbles, Productive & Unproductive; Builders; & Bots: Why the AI Boom Isn’t One Story, But Rather the Vector Driving the AI Economy Is at Least 12-DimensionalSix dimensions are entrepreneurial-technological-industrial aspects of bubble dynamics that are at least somewhat familiar from history; six dimensions are wild and new. The AI boom isn’t a single...Six dimensions are entrepreneurial-technological-industrial aspects of bubble dynamics that are at least somewhat familiar from history; six dimensions are wild and new. The AI boom isn’t a single narrative; it’s a tangle of grifters, overbuilders, positive externalities, and coordination plays colliding with platform power and techno‑millenarianism as natural‑language access to data becomes a general‑purpose upgrade like literacy, but with sustainable business models that look more like commoditized plumbing…The AI surge looks to me half like a familiar “productive bubble” and half like something much more complicated and new and strange. The “productive bubble
As an optimist, I see the likely equilibrium is user surplus rising fast—cheap, ubiquitous natural‑language access to data—while margins migrate to trusted data, integration, and uptime rather than model scarcity. I see policy choices around competition, energy, and data governance determining whether we get a broad productivity growth acceleration, or another round of attention enclosure. But the future is one I cannot see. The best cut at trying to set this out that I have seen this fall comes today, November 7, 2025, from Bill Janeway:
I think that this is very good as it goes. But I think that it is greatly oversimplified. I see at least twelve different balls being juggled in the air here, only six of which are found in typical “productive bubbles”. And thus the situation is so complex that I find myself largely at sea. In a “standard” “productive bubble”, there are, typically, five aspects to worry about: grifters, wasteful overbuilders, privately-unprofitable overbuilding made societally useful via positive externlities, coördinated implementation cycles à la Andrei Shleifer, and productivity increases driving the emergence of new rock-solid business models: Keep reading with a 7-day free trialSubscribe to DeLong's Grasping Reality: Economy in the 2000s & Before to keep reading this post and get 7 days of free access to the full post archives. A subscription gets you:
|
Bubbles, Productive & Unproductive; Builders; & Bots: Why the AI Boom Isn’t One Story, But Rather the Vector Drivi…
Friday, 7 November 2025
Subscribe to:
Post Comments (Atom)



No comments:
Post a Comment