Summary: Analysis claiming that automating X% of the economy can only boost GDP by 1/(1-X) assumes all sectors must scale proportionally. The economy is a graph of processes, not a pipeline. Subgraphs can grow independently if they don't bottleneck on inputs from non-growing sectors. AI-driven automation of physical production could create a nearly self-contained subgraph that grows at rates bounded only by raw material availability and speed of production equipment.

Models being challenged:

This post is a response to Thoughts (by a non-economist) on AI and economics and the broader framing it represents. Related claims appear across LessWrong discussions of AI economic impact:

Amdahl's Law for economics: Automating a sector that represents X% of GDP can boost output by at most 1/(1-X). Automating software (2% of GDP) gives ~2% boost; automating all cognitive labor (30% of GDP) gives ~42%.

Bottleneck tasks determine growth rate: "Suppose there are three stages in the production process for making a cheese sandwich: make the bread, make the cheese, combine the two together. If the first two stages are automated and can proceed much more quickly, the third stage can still bottleneck the speed of sandwich [...]

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Outline:

(03:13) A better model

(03:53) An illustrative case

(05:24) A hypothetical timeline

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First published:

Source:

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Narrated by TYPE III AUDIO.