When we first bought our house, back in the day, we took out an endowment mortgage. I don’t know if such a thing exists these days yet they promised the earth. Basically, if I recall correctly, you borrowed the money for the house, paid the interest only and took out an endowment policy which would grow over time. By the end of the mortgage period the endowment would have grown to such an extent that it would pay off the mortgage and have enough left over to buy a second property in Spain. Of course such promises never came true and in the end we had to remortgage to a repayment loan.
Then came the credit boom, where we were encouraged to buy everything on the never never because wages were rising, the real cost of goods falling and Utopia stretched before us. It was jam today and jam tomorrow until the proverbial hit the fan. Suddenly markets crashed, confidence fell, costs rose and we were left with an impossible debt burden.
After that we had seven days a week shopping and huge opportunities for women to go into work. There’s nothing wrong with that yet we were promised that the greater income would make us all better off. Now we find it takes two salaries to buy the house that one salary could afford twenty years ago.
South sea bubble, tulip mania, we’ve been through it so many times. Free money just doesn’t exist as the market will always correct itself eventually. It may take a while but there is more money around then things will become more expensive until we are back where we started.
Now I’m thinking about the hype around AI. It’s going to solve all our problems, doing most of the things that us feckless humans do, only much better and much quicker. It will be jam tomorrow, with so much leisure time for us to enjoy.
The downside of course is that it has the potential to cost millions of jobs. All technologies do yet there is a flaw in this argument. If jobs are lost, unemployment will rise and so will taxation to pay for benefits. This will put a break on the economy and people will be unable to buy the very things that AI is going to provide for us. AI in itself will not generate cash, it is the people that use it that will and if there is no market, or a depressed market, to sell products to then it is not going to fly.
Hype is just hype. AI may produce a lot of new jobs and may cost a lot of old ones, nobody can accurately predict the future. What is clear though is that the market will eventually sort itself out and most people will end up working just as hard as they are now to scratch a living. History tells us that.
Thoughts from a Guerrilla Worker 