Jevons Paradox
Jevons Paradox: when a resource becomes dramatically more efficient to use, demand for it can increase rather than decrease.
The classic example is coal. More efficient steam engines did not reduce coal consumption; they made coal more useful, cheaper to apply, and therefore more widely demanded.
AI Version
AI may create Jevons Paradox for intelligence.
If intelligence, labor, analysis, coding, and service delivery become cheaper, the likely outcome is not simply “less work.” It can be vastly more work attempted:
- more products built
- more bugs fixed
- more users served
- more experiments run
- more services made economically viable
- more ambitious goals becoming practical
Practical Rule
Do not assume efficiency lowers demand.
When a capability gets cheaper, ask what new demand it unlocks.
Related Notes
Source context: Garry Tan, “Boil the Ocean”