Bill Gates
Director, ASU Mechanics of Democracy Laboratory.
“When you invent radial tires that last four times as long, for some weird reason people didn't drive four times as much, and the factories that make tires employ a quarter as many people. When you replace people in Amazon warehouses with robots, people don't buy more because of that. … As soon as you complete the entire task, it doesn't matter that there's demand elasticity. That goes into the token budget, it doesn't go into the human salary budget.”
The Ezra Klein Show · Ideas & Essays · September 2026
Ezra Klein put the most common optimistic answer to Gates: the Jevons paradox, where cheaper intelligence expands demand enough that the jobs work themselves out. Gates conceded it holds for software so far, then argued it breaks the moment a task is completed end to end rather than merely sped up. He went on to say that people predicting net additional jobs "must not understand the piece of improvement we're on."
Transcript
…favor humans, that's a quality threshold which will be passed through. say insurance companies are still human doing humans through claims medical claims which is a very ai capable task then a competitor who has very few human employees will come in and uh change the pricing model for that industry
…jobs yes it is making a human provided resource much cheaper but because it's going to expand the demand so much it will sort of work itself out create jobs in other areas create new demand and this is how past technologies have gone and so we shouldn't worry too much about this how do you see that
well jevons is just a referral to the fact that parts of the economy are subject to demand elasticity and yes in the case of software if you're say three times as fast and there is still some role that only humans can perform then as you lower the cost you induce demand and so it's fair to say that the equilibrium today for so far for software is not a loss of employment when you invent radial tires that last four times as long for some weird reason people didn't drive four times as much uh and tact factories that make tires employ a quarter as many people when you replace people in amazon warehouses with robots people don't buy more because of that so you know anybody who's numeric can say to themselves what portion of the economy is is subject demand elasticity and what are those tasks that will still be human necessary as soon as you complete the entire task it doesn't matter that there's demand elasticity that goes into the token budget it doesn't go into the human salary budget the cost for some of these things is so much less than the cost of the human labor and so the as you cross reliability thresholds both with white collar and human eyed robots you destroy jobs and you leave no high ground that's you know innovation in the…
that column is based on so jevin's paradox and then the other which is an argument from alex imus who i believe is now at one of the labs as an economist is that you will have this sort of explosion in the relational sector that one thing that happens when people get wealthier and you'd probably…
royalty used to have a lot of uh human help you had upstairs downstairs you know all those maids and people and you used to have a human who helped you get dressed believe me the labor intensity of wealth is down super dramatically from what it used to be
so you don't have Jevins
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