If AI continues to make building systems and writing programs cheaper and easier, we will need a lot fewer developers. In fact, a lot fewer professional roles in general.
We’ll also get a quantum leap in productivity, which we can all agree is a great thing… right up until we personally face the first-order consequences. Which, to be frank, feels like it’s going to happen to a lot of us. Spend a few hours playing around with OpenAI’s GPT-6 Astra, which dropped just this week, and that scenario seems a lot less far-fetched than it did even a few months ago.
But the deeper realisation here is that it’s not so much that jobs will be lost, but that the jobs we do will be different. Counterintuitively, not only will workforce participation be okay, but it could even thrive. That is to say, although the transition may be rough, there’s a decent chance we come out the other side with more of us engaged in productive activity, and in a manner that is entirely more fulfilling than ever before.
Okay, maybe this is unreasonably hopeful and positive (not my usual style), but it’s not entirely implausible. And it’s not without precedent.
In the late 19th century, during the early stages of the Industrial Revolution, steam engines were becoming increasingly efficient. This is always what happens after the initial zero-to-one moment arrives. For those in the coal game, this was seen as a potential disaster: if engines needed less coal, demand would crater and loads of people would lose their jobs. Except, as William Stanley Jevons noticed, the exact opposite happened.
Coal consumption didn’t decline; demand actually exploded. Existing use cases became far more commercially attractive and far less risky. More importantly, previously uneconomic ventures were now viable. Capital barriers to entry collapsed, new markets were created, and the rest, as they say, is history.
This is what has become known as Jevons’ paradox, which isn’t so much a paradox as it is a habit of missing second-derivative consequences (the eternal scourge of investors and policymakers alike). It’s stupidly obvious once you think about it: a useful thing made cheaper will be used by more people. Steam engines didn’t become better and cheaper because no one wanted them, but because we got really good at making them. Those are two extremely different things.
Just as cheaper access to power was a net boon for the economy and society at large, low-cost intelligence could well do the same thing.
Are software developers likely to make more or fewer apps when the cost of doing so is next to nothing? Software that was never viable under the old cost structure suddenly looks not only doable, but profitable when your CTO, CMO, and CFO all come bundled in a $50/month subscription.
Features that were never worth dedicating a few months of costly human effort to suddenly become no-brainers (something I hope to demonstrate directly with Strawman!). Custom software with only a tiny addressable market is now worth making. It’s not about the same output with a smaller team, but a load of added output from the same team.
We’ve already encountered this in recent CEO interviews. When asked about the impact of AI on their development costs, CEOs aren’t talking about laying off devs, but about a vastly accelerated product roadmap. Yes, there are exceptions, but I suspect a good deal of that is more about remedying the bloat from previous overzealous expansion than anything else.
There is, as always, subtlety to keep in mind. Jevons’ paradox doesn’t usually apply in areas where demand is naturally bounded. Once we mechanised farming, we didn’t eat ten times as many calories and keep everyone on the farm. In that case, exploding productivity was a disaster for many farm workers. But this is a tragedy only in the narrowest sense.
Yes, jobs were lost in agriculture, but this was brutal, back-breaking work. No one alive today yearns for the days when 90% of us slaved away in a hot field all day and spent a huge slice of our income on food. We celebrate liberation from that drudgery, and how it enabled humans to move on to more higher-value creation.
That’s not to say we ignore the plight of the disrupted. But in trying to ease the transition, we shouldn’t stand in the way of progress: progress measured not by some crude, narrow economic metric, but by our shared prosperity.
And that’s what lies on the other side of this: more stuff, cheaper stuff, made with less drudgery, and put to ever more creative and inventive uses by anyone with a laptop and a vision.
The investing “so-what” here is a push to look beyond surface-level headlines and remember the foundational truths: at the end of the day, no matter how clever and productive we get, you always need two things to create value: human action and capital. If you can find people who are dreamers, builders, and doers, and empower them with capital, they, you, and society as a whole will be far better off.
Or, you know, we slide straight into a dark new dystopia of technological feudalism. It could go either way ¯_(ツ)_/¯
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