Artificial Super Intelligence, Artificial General Intelligence and their Implications on Economics Part 1

There are three fundamental principles that underpin economics. The Principle of Scarcity, the Principle of Opportunity Cost, and the Law of Supply and Demand. The Law of Scarcity states that resources such as time and money are limited, but human wants and needs are unlimited, this therefore means that individuals and societies must make "good" choices about how to allocate resources. The Law of Opportunity Cost requires that every choice involves a trade-off. It is the value or cost of the benefits forgone when a choice is made. The Law of Supply and Demand describes the interaction between the amount producers are willing to sell and the amount consumers are willing to buy. There are other very important principles in economics such as incentives matter, efficiency and equity, and market and trade. However, the three principles outlined earlier are far and away the most important, and so for the purposes of this article, focus will be placed on those.

The evolution of artificial intelligence presents three distinct stages of development that could fundamentally reshape these economic principles. Artificial General Intelligence (AGI) refers to the hypothetical intelligence of a machine that possesses the ability to understand or learn any intellectual task that a human being can. It is a type of artificial intelligence that aims to mimic the cognitive abilities of the human brain. Unlike narrow AI systems designed for specific functions, AGI represents a breakthrough in machine intelligence that could match human versatility across all cognitive domains. This advancement could transform our understanding of productivity and resource allocation, potentially challenging traditional economic constraints.

Artificial Superintelligence (ASI) represents an even more profound leap forward - it is a hypothetical software-based artificial intelligence system with an intellectual scope beyond human intelligence. At the most fundamental level, this superintelligent AI has cutting-edge cognitive functions and highly developed thinking skills more advanced than any human. The implications of ASI for economic systems could be revolutionary, potentially altering our very understanding of scarcity and resource allocation. The capabilities of such systems could solve complex economic problems that have challenged human societies for generations.

The concept of Artificial Universal Intelligence (AUI) takes us even further into speculative territory. This post-ASI era refers to a future state in which superintelligent AI has not only surpassed human intelligence but has transformed society, technology, and even the nature of reality itself. In this era, AI continuously evolves, shaping all aspects of existence, from economics and governance to biology and consciousness. The implications for economic principles in an AUI world could be profound, potentially rendering current economic models obsolete.

The exponential nature of knowledge provides a crucial framework for understanding how these AI developments might unfold. This concept refers to the idea that the rate at which human knowledge accumulates and expands over time is not linear but accelerates over time. Historical examples clearly demonstrate this pattern. Consider the evolution of maritime technology: From the 1st Century to the 17th Century, a period of almost two millennia, boats were primarily powered by oars and sails. While improvements were made through developments like Roman galleys, medieval ships, and the Age of Exploration's caravels, the changes were gradual. Knowledge limitation meant that shipbuilding relied on trial and error, and technological diffusion was slow due to limited communication methods and localized expertise.

The pace of change accelerated dramatically from the 17th century to the 20th century. The Steam Power Revolution of the 18th-19th Century revolutionized maritime transport. Steamships like Robert Fulton's Clermont in 1807 eliminated dependence on wind and enabled faster, more reliable voyages. Innovation accelerated as engineers refined designs and introduced steel hulls, propellers, and stronger materials. The Industrial Revolution provided advanced tools, mass production, and better materials like iron and steel. Shipbuilding became more precise with the introduction of scientific principles such as hydrodynamics.

The 20th Century brought even more rapid advancement. Innovations like diesel engines replaced steam engines, making ships even more efficient. The development of submarines, aircraft carriers, and massive cargo ships showed how diverse and specialized boats had become in only 300 years. Today, modern boats range from autonomous ships and superyachts to eco-friendly solar and electric-powered vessels. GPS, radar, and advanced navigation systems have transformed maritime travel, making it safer and more efficient. The use of computer-aided design (CAD) and artificial intelligence has drastically improved shipbuilding, while materials like carbon fiber and composites enable lighter, stronger, and more versatile designs.

This acceleration of progress can be attributed to several key factors. First, there's the compounding nature of knowledge - innovations from one era, like steam power, became the foundation for the next, such as diesel and electric engines. Second, increased global collaboration through trade and communication spread ideas quickly, fostering competition and cooperation in shipbuilding. Third, technological synergy meant that advances in unrelated fields, such as computing and materials science, contributed directly to the evolution of boats.

If this exponential nature of knowledge holds true with human advancement, it suggests an even more dramatic curve for artificial intelligence development. Current trends already show exponential growth in AI capabilities, indicating that ASI-driven changes could occur in a remarkably short period. The implications for economic principles could be profound. An ASI system might fundamentally alter our understanding of scarcity by finding novel solutions to resource limitations. It could transform opportunity cost calculations by processing vast amounts of data to optimize decision-making. The law of supply and demand might evolve in unprecedented ways as AI systems manage production and distribution with superhuman efficiency.

However, it's crucial to note that while these possibilities are theoretically grounded, the actual emergence of Artificial Universal Intelligence remains uncertain. Many factors could alter this trajectory, including technological barriers, ethical considerations, and societal choices. The purpose of this analysis is to understand how advancing AI technology might reshape fundamental economic principles, while acknowledging that the future remains inherently unpredictable.

[To be continued in Part 2...]

[Sources:]

- Google Cloud: What is Artificial General Intelligence

- IBM: Understanding Artificial Superintelligence

- The Science of Machine Learning and AI: Exponential Growth