Will we be buying eggs for fractions of a penny, houses for a song?

The impact of Artificial Intelligence on the economy is heating up as AI begins to seep from its original killer app of cheating on college essays and porn.

According to layoff firm Challenger, Gray & Christmas, in the last year, AI has accounted for one in ten layoffs in the tech sector and one in 50 layoffs overall.

Small potatoes compared to the panicked warnings of a few years ago.

But as Ray Kurzweil says, 1% in an exponential process is halfway there. And AI's economic impact is likely to be exponential — so small you can barely see it, then it blows up and takes over everything.

AI and Jobs
The question of whether AI is a blessing or a curse very much depends on how hard it is to create new jobs.

If it's easy to create new jobs, AI isn't a job crisis at all — it's a ladder.

Think Silicon Valley in the 90s, when the new jobs paid much better than whatever Palo Alto townies were doing before tech showed up.

On the other hand, if it's hard to create new jobs, think Detroit in the 1970's. A hellscape. The old jobs are gone, nothing to replace them. Minimum wage at best, riots over universal basic income at worst.

AI and Deflation

Still, setting aside the job dynamics, one thing we can be sure of is AI will radically reduce prices — deflation.

This is because, across the board, AI replaces things that were more expensive — especially when you consider AI combined with robots.

Contrast with the 1990's internet, which reduced some prices — say, buying things from Amazon or downloading an mp3 or movie. But a lot of the benefit from the internet was quantitative — meaning stuff got better. It didn't necessarily get cheaper.

After all, the 1990s internet couldn't run a factory. Or a chicken farm. It couldn't drive you to work, deliver your supply chain, or produce historical documentaries with a one-sentence prompt.

So, yes, we could conceivably get eggs for pennies.