Tech tycoons have got the economics of AI wrong

Even as economic growth was just taking off, some economists were already pessimistic. Coal, wrote William Stanley Jevons in 1865, is “the mainspring of modern material civilisation”. Yet it was finite and would soon run out. Although more could be found by digging deeper, it would be increasingly expensive to extract and these higher costs would reduce the competitiveness of Britain’s manufacturers. After all, in other countries the black fuel was still in sight of daylight. Efficiency gains—using less coal to produce the same amount of stuff—would not save the country. Indeed, cleverer use of limited resources would simply provide an incentive to burn even more coal, which would, paradoxically, lead to an even faster use of British reserves. There was no escape, the Victorian economist believed. Coal would be exhausted and the country was likely to “contract to her former littleness”.