Good piece by @profgoose addressing the redistributional politics of AI nationalization and the fight over how to divide the spoils.

All parties involved – Dems, White House, AI firms, special interests – have very different reasons for calling for wealth-sharing schemes, and even more contentious claims about how to best spend it all will follow. But the bottom line is that it all leads to greater control of the means of production by the state in the name of servicing various interests. It becomes about client politics and distributional favors with all the dangers that Mancur Olson, James Wilson, and many others warned of in the past.

A crucial insight here from Saunders with a useful analogy to petrostate politics:

“A country sitting on a giant claim to AI’s output starts to rhyme with a petrostate. […] A government that regulates these companies, buys from them, and now wants to own a piece of them is not a neutral steward of anyone’s dividend. It’s three conflicting interests wearing one hat, refereeing a game it’s also playing. We’ve run the regulator-and-customer version of this for eighty years with the defense contractors, and managed it, badly, with procurement rules and recusals. Adding owner to the same hat, over the same few firms that now sit at the center of the whole economy, is the new and unmanaged part.”

Importantly, Saunders makes another key point late in the piece about how we're getting way out ahead of ourselves here because "the whole conversation is running ahead of the evidence" in terms of the disruptive effects of AI systems. "The politics of the AI dividend is sprinting toward a crisis the economics hasn’t yet produced," he correctly notes.

Basically, all parties have essentially decided to buy into the idea of "Never let a good crisis go to waste" and then they have set out to create that crisis mentality even though there is no crisis at all! Everything being pitched today is just premised on Chicken Little conjectures that place zero faith in markets or humans to adapt to technological change, as they have many times before. https://kylesaunders.substack.com/p/aipolitics-20-everyone-agrees-the