However, if they believe in near-term TAI, savvy investors won’t value future profits (since they’ll be dead or super rich anyways)
My future profits aren’t very relevant if I’m dead, but I might still care about it even if I’m super rich. Sure, my marginal utility will be very low, but on the other hand the profit from my investments will be very large. Even if everyone is stupendously rich by today’s terms, there might be a tangible difference between having a trillion dollars in your bank account and having a quadrillion dollars in your bank account. Maybe I want my own galaxy in which I alone have the rights to build Dyson spheres and that is out of the price range of your average joe with a trillion-dollar net wealth. Maybe (and this might be more salient to your typical investor who isn’t actively thinking about far out sci-fi scenarios) I want the prestige, political control, etc, that come with being wealthy compared to everyone else.
A bet that interest rates will rise is not a bet on short AI timelines. Rather, it is a bet that:
Most consumers will correctly perceive that AI timelines are short, and
Most consumers will realize this long enough before TAI that there is enough time to benefit from profitable bets made now, and
Most consumers will believe that transformative AI will significantly reduce the marginal utility they get from their savings—and not, say, increase the marginal value of saving, because they could lose their jobs without taking part in the newfound prosperity from AI
I believe that this is almost correct. My objection is with the second bullet point, “interest rates can rise before we get TAI”. This is possible, but we no longer have a reason to believe that it will happen—unless very many people decide to reduce their savings rates. By then, this is no longer a bet on short AI timelines, but rather a bet about whether the typical consumer will realize that AI timelines are short sufficiently long enough before AI that you have time to enjoy your profits.
If future benefits exist for being even richer after TAI, interest rates could rise due to inductive reasoning even before consumers begin adjusting their savings rates in response to TAI. If I know that consumers will adjust their savings rate one day before TAI (assuming a deterministic timeline where TAI occurs in one discontinuous jump and very unrealistic timescales for consumers changing their savings rate for simplicity’s sake), then I should place a bet on the interest rate rising (e.g. shorting government bonds) two days before TAI. If enough investors take this action, then interest rates will rise two days before TAI. Knowing this, I should short government bonds three days before TAI, etc… Similar to how if the government promises to print a lot of money in one month, then inflation will begin to rise immediately.
Even if everyone is stupendously rich by today’s terms, there might be a tangible difference between having a trillion dollars in your bank account and having a quadrillion dollars in your bank account. Maybe I want my own galaxy in which I alone have the rights to build Dyson spheres and that is out of the price range of your average joe with a trillion-dollar net wealth.
Are you assuming this holds true even in some scenario where a single company or government has total, decisive control over the future of civilization? Will the entity in power really still prioritize such exchanges if they could plausibly just take it directly from you (since they are not accountable to a higher power)?
Or are you assuming that such a Singleton is unlikely to exist? (Or, is the focus on the possibility that such a Singleton does not exist)
I agree that the marginal value of money won’t be literally zero after TAI (in the growth scenario; if we’re all dead, then it is exactly equal to zero). But (if we still assume those two TAI scenarios are the only possible ones), on a per-dollar basis it will be much lower than today, which will massively skew the incentives for traders—in the face of uncertainty, they would need overwhelming evidence before making trades that pay off only after TAI. And importantly, if you disagree with this and believe the marginal utility of money won’t change radically, then that further undermines the point made in the original post, since their entire argument relies on the change in marginal utility—you can’t have it both ways! (why would you posit that consumers change their savings rate when there is still benefits from being richer?)
Still, I see your point that even in such a world, there’s a difference between being a trillionaire, or a quadrillionaire. If there are quadrillion-dollar profits to be made, then yes, you will get those chains of backwards induction up and working again. But I find that scenario very implausible, so in reality I don’t think this is an important consideration.
My future profits aren’t very relevant if I’m dead, but I might still care about it even if I’m super rich. Sure, my marginal utility will be very low, but on the other hand the profit from my investments will be very large. Even if everyone is stupendously rich by today’s terms, there might be a tangible difference between having a trillion dollars in your bank account and having a quadrillion dollars in your bank account. Maybe I want my own galaxy in which I alone have the rights to build Dyson spheres and that is out of the price range of your average joe with a trillion-dollar net wealth. Maybe (and this might be more salient to your typical investor who isn’t actively thinking about far out sci-fi scenarios) I want the prestige, political control, etc, that come with being wealthy compared to everyone else.
If future benefits exist for being even richer after TAI, interest rates could rise due to inductive reasoning even before consumers begin adjusting their savings rates in response to TAI. If I know that consumers will adjust their savings rate one day before TAI (assuming a deterministic timeline where TAI occurs in one discontinuous jump and very unrealistic timescales for consumers changing their savings rate for simplicity’s sake), then I should place a bet on the interest rate rising (e.g. shorting government bonds) two days before TAI. If enough investors take this action, then interest rates will rise two days before TAI. Knowing this, I should short government bonds three days before TAI, etc… Similar to how if the government promises to print a lot of money in one month, then inflation will begin to rise immediately.
Are you assuming this holds true even in some scenario where a single company or government has total, decisive control over the future of civilization? Will the entity in power really still prioritize such exchanges if they could plausibly just take it directly from you (since they are not accountable to a higher power)?
Or are you assuming that such a Singleton is unlikely to exist? (Or, is the focus on the possibility that such a Singleton does not exist)
I agree that the marginal value of money won’t be literally zero after TAI (in the growth scenario; if we’re all dead, then it is exactly equal to zero). But (if we still assume those two TAI scenarios are the only possible ones), on a per-dollar basis it will be much lower than today, which will massively skew the incentives for traders—in the face of uncertainty, they would need overwhelming evidence before making trades that pay off only after TAI. And importantly, if you disagree with this and believe the marginal utility of money won’t change radically, then that further undermines the point made in the original post, since their entire argument relies on the change in marginal utility—you can’t have it both ways! (why would you posit that consumers change their savings rate when there is still benefits from being richer?)
Still, I see your point that even in such a world, there’s a difference between being a trillionaire, or a quadrillionaire. If there are quadrillion-dollar profits to be made, then yes, you will get those chains of backwards induction up and working again. But I find that scenario very implausible, so in reality I don’t think this is an important consideration.