The Efficiency Trap — And Why I’m Not Ready To Stop Worrying About AI

There’s an idea from 1865 that I can’t stop thinking about. Economist and logician William Stanley Jevons noticed something counterintuitive happening with coal.

As steam engines became more efficient and burned less coal per unit of work, you’d expect overall coal consumption to drop. Instead, it exploded higher.

Why? More efficient engines made energy cheaper to use, encouraging people to deploy them everywhere. Efficiency didn’t reduce demand – it multiplied it.

This became known as the Jevons paradox: when a resource becomes more efficient to use, total consumption of that resource often rises rather than falls.

Now, replace “coal” with “human cognitive labor,” and you start to see why a lot of people are very excited — and why I’m cautiously along for the ride.

This post originally appeared at Money & Markets.