This is the best article I've read since starting this newsletter. If you click on one link, make it this one.

As people get richer, they don’t just want more commodities. They want things that aren’t commodities in the standard sense of the word. The social aspects of products such as the relationships, the status, and exclusivity—what Rene Girard called the mimetic properties of desire—become much more relevant once people’s basic needs are satisfied. And the demand for these properties will bring the human element back into the production process, and with it, the jobs.

When AI automates commodity production, prices in that sector fall. That raises real income. If the goods and services people want more of as they get richer lie disproportionately in the relational sector, demand shifts in that direction. Baumol’s cost disease then amplifies the result: if the relational sector remains harder to automate, it becomes relatively more expensive and absorbs a growing share of total expenditure.

What will be scarce?, Alex Imas, 4/14/26

git log --format=format: --name-only --since="1 year ago" | sort | uniq -c | sort -nr | head -20
git shortlog -sn --no-merges
git log --format='%ad' --date=format:'%Y-%m' | sort | uniq -c
          

The Git Commands I Run Before Reading Any Code, Ally Piechowski, 4/8/26

1D-Chess, Rowan Monk

I had a discussion this week with co-workers about future AI cost for consumers. They argued that the model companies aren't profitable, and that they will inevitably raise prices to recoup their investments. This is a suspect claim, but apparently popular among otherwise well-informed people, so I thought I'd address it here. Two important pieces of information

1. Holding capability constant, inference cost has fallen 10x-100x year over year
2. While providers are operating at net losses, they are profitable on the margin

Micro 101 tells us that the firms will serve their models at the point where marginal cost equals marginal revenue. Importantly, upfront costs don't affect this equilibrium. Even if OpenAI were a monopoly and faced no competition, so long as the elasticity of demand is not 0, if marginal costs decrease, part of those savings will be passed along to consumers.

LLM inference prices have fallen rapidly but unequally across tasks, EpochAI, 3/12/25
No, it doesn't cost Anthropic $5k per Claude Code user, Martin Alderson, 3/9/26