Tech Tycoons have Got the Economics of AI Wrong

Even as financial growth was simply taking off, some economic experts were already downhearted. Coal, wrote William Stanley Jevons in 1865, is “the mainspring of modern-day material civilisation”. Yet it was finite and would soon go out. Although more might be discovered by digging deeper, it would be to extract and these higher costs would decrease the competitiveness of Britain’s producers. After all, in other nations the black fuel was still in sight of daytime. Efficiency gains-using less coal to produce the very same quantity of stuff-would not conserve the nation. Indeed, cleverer usage of limited resources would merely offer a reward to burn much more coal, which would, paradoxically, cause an even quicker use of British reserves. There was no escape, the Victorian financial expert believed. Coal would be tired and the nation was likely to “contract to her former littleness”.

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This post appeared in the Finance & economics area of the print edition under the heading “Rocked by DeepSeek”

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Tech tycoons have actually got the economics of AI wrong

From the February 1st 2025 edition

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