The Simple Economics of Machine Intelligence: Judgment will become more valuable
When the cost of a foundational input plummets, it often affects the value of other inputs. The value goes up for complements and down for substitutes. In the case of photography, the value of the hardware and software components associated with digital cameras went up as the cost of arithmetic dropped because demand increased – we wanted more of them. These components were complements to arithmetic; they were used together.� In contrast, the value of film-related chemicals fell – we wanted less of them.
All human activities can be described by five high-level components: data, prediction, judgment, action, and outcomes. For example, a visit to the doctor in response to pain leads to: 1) x-rays, blood tests, monitoring (data), 2) diagnosis of the problem, such as “if we administer treatment A, then we predict outcome X, but if we administer treatment B, then we predict outcome Y” (prediction), 3) weighing options: “given your age, lifestyle, and family status, I think you might be best with treatment A; let’s discuss how you feel about the risks and side effects” (judgment); 4) administering treatment A (action), and 5) full recovery with minor side effects (outcome).
When the cost of a foundational input plummets, it often affects the value of other inputs. The value goes up for complements and down for substitutes. In the case of photography, the value of the hardware and software components associated with digital cameras went up as the cost of arithmetic dropped because demand increased – we wanted more of them. These components were complements to arithmetic; they were used together.� In contrast, the value of film-related chemicals fell – we wanted less of them.
All human activities can be described by five high-level components: data, prediction, judgment, action, and outcomes. For example, a visit to the doctor in response to pain leads to: 1) x-rays, blood tests, monitoring (data), 2) diagnosis of the problem, such as “if we administer treatment A, then we predict outcome X, but if we administer treatment B, then we predict outcome Y” (prediction), 3) weighing options: “given your age, lifestyle, and family status, I think you might be best with treatment A; let’s discuss how you feel about the risks and side effects” (judgment); 4) administering treatment A (action), and 5) full recovery with minor side effects (outcome).