Meta Forces Employees to TRAIN AI Replacements!

Ajouté : 2026-05-10

[00:00:00]In the background of the war in Iran, there is another war going on between human beings, machines, and the CEOs of the companies that want to replace one with the other. The driver of the story is actually Meta. Uh that's Facebook's parent company and they have implemented a strange AI training protocol ordering their something like 50,000 employees to install tracking software on their computers to help train AI agents for what they call white collar work. Well again notably Facebook is a company where 50,000 highly compensated people do white collar work. And so most Meta employees say, first, this is a uh violation of privacy. That's pretty uncomfortable. I understand you don't have a real expectation of privacy at your job. But knowing that an AI is monitoring every click, every window open, every uh keyboard stroke is pretty creepy. But also, Meta wants to build AI agents that can perform work tasks autonomously, the ones they are training their employees to do, right? According to Meta's chief technology officer, Andrew Bosworth, who is worth, I think probably something in the realm of uh hundreds of millions or billions of dollars, has said, quote, "The vision we are building toward is one where our agents, that's AI, primarily do the work in the roles direct review and help them improve. Namely, that Facebook is going to become a company in which a small number of caretakers uh basically just empower an AI." that Amy said was for agents to quote automatically see where we felt the need to intervene so they can be better next time. And the insane part is again that this is part of a broader trend and a trend that when you peel back the the story on the surface which is stuff like this, right? white collar workers being replaced with AI.

[00:01:57]You see, when you get into the economics and the real theory behind it, you start to understand just how troubling and just how scary this can be and why it's being called a doom loop. So, we've talked about the fact that, you know, Meta has laid off something like 16,000 employees uh with rumors of even more cuts on the way. And certainly Meta stock has been rewarded for this after earnings last season uh or excuse me uh last week the Meta stock has really gone on a tear. Here's the here let's see if we can find the year to date. Let's look at the 5-year chart. I mean, you can see the 5-year chart has been pretty choppy, but as of yesterday, you saw it went from literally being $525 a share in March to now trading at 68.

[00:02:53]That's a huge gain. And the earnings really reflect that. Now, there is a little bit of a problem here. One is that the the economics of this are get really scary when you scale them out. And to do this, I'm going to rely on something that sounds really niche, but I promise don't lay eyes rise glaze over. It's called Stalper Samuelson. Stalper Samuelson.

[00:03:23]This is some grad school economic stuff here, right? And I'm sorry to bring this into you. Is a theorem within the Hexraolan trade theory, right? This is a way to understand how countries with different economies trade with each other. But it is really useful to understand what would happen in a country that suddenly deploys AI into its white collar workforce. Now the theorem says if you assume constant returns to scale which don't really happen perfect competition never really happens equality in the number of factors to the pro number of products right classic economics assumptions. But if you handwave them away, it argues that mathematically the and stay with me here, a rise in the relative price of a good will lead to a rise in the real return of that factor which is used most intensively in the production of that good and a fall in the real return of the other factor. What does this mean essentially?

[00:04:22]Well, what they're arguing is that when you produce a thing in your country and you the price of that thing rises, let's say you make uh let's say you design electronics. That's something that is very commonly done here in the US knowledge economy. Okay? And what do you use to design uh a new speaker system?

[00:04:48]Well, you use engineers, human beings, and you use computers, right? Drafting software. Well, what happens? And you buy you get you hire engineers and you upgrade your uh computer systems based on the return you're going to get with them. Again, uh in fact, we can do even better. We can use Meta as an example.

[00:05:10]They sell advertising or an advertising algorithm. So, they hire software engineers and they hire computers, right? And so they say, "Listen, every year Meta looks and says, okay, what is going to improve our company's productivity? What's going to make our advertising better, our advertising algorithm better? Two more software engineers or two more computers?" And they do the math and they say, "Well, if we hire two more software engineers and they cost $100,000 each, they're going to make the company uh $107,000 in profit, meaning that they offer a 7% return."

[00:05:46]I know. Do bear with me. And they say, "Well, if we buy two new computers, well, they're going to actually offer uh uh only a 4% return." She say, "Obviously, we hire more engineers." And in Stompler Samson, what they argue is that that decision, right? When do I purchase when do I purchase labor and when do I purchase capital or materials or things, right? When you have a rise in the price of a good, the real return to that factor which is used most intensively is going to increase and there will be a corresponding fall in the other factor.

[00:06:29]Which means that let's say the return on buying a computer your capital inputs suddenly goes from 6% to 12%. What does that mean for labor? It means that no one is going to be hiring labor and it's not just going to say that oh guys you know the return on labor is going to be still 7%. It's actually according to Stumpler Samson mathematically it's going to actually start to fall. The reason being of course not just you but everyone wants more computers and this is the fear here right is that this happens oftentimes in the context of manufacturing right this was designed the theory in the 1940s when you had a lot of industries that were doing things by hand we're starting to see scientific manufacturing applications and so they would say well what happens when a country that hand grows grows rice or wheat suddenly has to trade as in the same market as a country where whereat is grown using uh threshers and combines on multi,000 acre farms. The answer seemed clear that the value, the living standards, the wages of those hand farmers plummeted in the face of this automation and even currency manipulation. This is something that can happen when two different countries trade in two different currencies. you can devalue your currency making it so that a good wage for that rice farmer is only 25 cents in US currency. Well, you can't do that inside of a country means that Stompler Samuelson occurring inside of a country i.e. Instead of a new country emerging, AI is almost like someone cracked open the Earth and inside was a a a civilization of robots that could do a a a bunch of different tasks really well and that they traded with the rest of the globe.

[00:08:45]And so the math is pretty clear on this one that in the face of emerging AI technology, you are going to see wages start to decline.

[00:09:01]Now let's before we talk about what this means in a societal sense and what the implications of stomper Samson are. I want to mention of course guys that if you're trying to compete with the machine overlords you're going to need every advantage you can get.

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[00:09:35]I.e., use your hands, get out there, move around, stay mobile, right? Your LLM can't follow you into the woods. And again, with two hands free, uh you can I don't know, you can really launch a GPU uh at a tree or smash it with a rock like the you can use a bigger rock. I'm I'm I don't have any good ideas, but you should buy Strike, right? It's the favorite Strike Gum of Marathon gaming streamers, Ukrainian drone pilots, uh me, Attire Dad. So, you want to go to strikeum.com, pick some up, or you can get it on Amazon. So, here's here's the conundrum. What happens when you snap your fingers and suddenly the returns on buying a computer, unlocking an LLM go through the roof, and we know that wages of white collar workers and workers in general are going to start dropping.

[00:10:31]Well, there's a problem, right? Because what happens in effect when the return on capital becomes very high and the return on labor becomes very low. By the way, guys, I'm using these terms.

[00:10:47]Capital just means the stuff that makes something, the the big the big machine that makes the ice cream. And labor is the person behind the counter scooping it. And this is standard economic theory. This is not like I know it's the internet and everybody's somehow a Marxist now. This isn't Marxist theory.

[00:11:07]This is this is again Stompler saying very western economics. So labor and capital inputs.

[00:11:15]What happens when laboring just doesn't pay that well and the return on capital becomes phenomenal. Well, here's the problem. The problem is the American tax system. We are set up for this to be the worst possible tax system. In fact, if you were to design a tax system to harm the most number of people in the face of a Stumpler Samuelson disruption as AI is, you would design the American tax system. So, take a look at this. Okay, again, I'm asking you to follow along and do some math. I know, but bear with me. The average on average, okay, so a middle-ass family paid about $18,000 in taxes in total. That includes that includes the uh property taxes, sales taxes, state and local taxes, all of it. And a lot of people love to go and compare this to income. They say, "Oh, the average household paid 17 $18,000 in taxes and made about $60,000 in income." Meaning that they paid about a third of their earnings into various tax buckets. But that's not a really good metric because as we always talk about uh the richest people most of their income isn't from labor. So let's do a a different metric, right?

[00:12:40]The average net let's do net worth. This is where things get really interesting because according to 20 the 2020 Federal Reserve Survey of Consumer Finances, the median household net worth, let's just round it up, $200,000.

[00:12:56]Now, the interesting part is that of that $200,000, what percentage are they expected to cough up to the federal government every year? Well, we just established that the answer is about 18 grand. So again, in the interest of simple math, we're going to say that a little less than 10% of American households net worth, their wealth, is expected to be turned over to the federal government every year. You can see how basically if they don't want their wealth to go down, they kind of have to work. And again, when you think of things in these terms, it starts to look kind of weird. The fascinating part is that when you look at the distribution of net worth in the United States and the tax burden, you start to see that actually 10% remains pretty constant through the tax bracket until you get to a specific point. See, I want you guys to take a look here at this useful chart. Okay, this is a this is a chart depicting the distribution of wealth, not income, wealth in this country. Right? So here you can see this is the bottom 99%. So this is again the bottom 99 99 99% of Americans. You can see that a few Americans actually have negative net worth. This would be for example a doctor who just graduated medical school might have $50,000 in student debt, right? I mean you have to think that if you fresh out of medical school, maybe they buy a car on a car loan. Maybe you come out of university and you um yeah, you have uh some student loans. So, you can see that a lot of people I mean a a good let's see a good 10% of Americans have a negative net worth 1 in 10. And you can see that the net worth graph follows basically a bell curve. Looks like a healthy entrepreneurial capitalist society in which people that take big risks and work really hard and invest in themselves wisely get disproportionate rewards with the top 1% of earners actually raking in something to the tune of $11 million in net worth. Right now there's a problem. As discussed, there's 1% of people who are missing. Let's add them back into the chart.

[00:15:10]This is that entire curve from negative net worth all the way to $11 million.

[00:15:16]There they are. And when you add in though, you realize the 1% this is their net worth, right? The top.1% with an average net worth, right, is literally it's impossibly high. It's 186 billion. And the net look look there is $51 million, right? the 0.1% and here is the 0.00001%.

[00:15:45]Averaging $5 billion in net worth. This is this is the absurdity of of this. And this is, by the way, guys, a level of inequality that is almost incomprehensible.

[00:15:58]again like if you look at the top 100 people in terms of net worth you can see here is a a pathetic Steve Rails with his 8 billion and here of course is by the way this is dated Elon Musk is now worth 10 times this amount um but you can see that again this looks like a a less unfair distribution of capital but again look do you really believe that Elon Musk is both a and he's not a hund he is thousands tens of thousands of times more compensated but is he tens of thousands of times smarter probably not I know what you're thinking you guys are like uh I can't see the chart guys that is the chart okay right there that is it there is nothing there so what does this matter well you can see that this is that chart straight line of everyone and a vertical line for those pe for the wealthiest. You should understand that the wealthiest people in the country that is an outcome that is completely foreseeable when capital becomes more valuable than labor. It's it is factually inevitable.

[00:17:20]Okay. And so that chart is somehow going to become even more vertical.

[00:17:26]And it is you cannot have a functioning society with this level of of wealth inequality.

[00:17:37]And the fact that it is going to get worse is extremely disturbing. that all of those people that work for a living that most of their net worth is generated through performing a job every day.

[00:17:53]They are they are going to be earning less and less and less and less. And the people that hold that own those companies that own the AI that own the computers that own the companies that replace people with AI, those people are going to make more and more and more money. And the only way that that gets mitigated, and by the way, it's already happening.

[00:18:22]Okay, this is the last 12 months of job growth. And in every industry, jobs have been absolutely being destroyed.

[00:18:32]Large portions of the federal government has been annihilated. Um, you've had net job losses in professional and business services, financial activities, right?

[00:18:43]Banks that used to hire analysts, it gone, utilities basically unchanged. Uh transportation, warehousing absolutely getting crushed. Uh right, retail trade uh destroyed, wholesale trade destroyed, manufacturing getting crushed in the last 12 months, mining and logging crushed. And what's growing? The only thing growing are is the health sector and leisure and hospitality, which is terrifying because again, caring for and entertaining uh a tiny, fabulously rich minority is well, not really something you can base an economy around. Again, that's like roughly the economy of a a developing nation. Something you would expect to see in a place like South Africa or Zimbabwe, right? not in the most developed country on earth. And I point these things out because the solution that a lot of people point to is to say, "Oh, we should tax these uh billionaires, right? We should we should have some kind of minimum tax on this class of person."

[00:19:56]And the people ask, well, is that even feasible?

[00:20:02]And the answer is, guys, it's already happening. Okay, it's just the only people subject to a wealth tax is the average American. Let me explain. Right.

[00:20:13]So, if we ask AI what portion of American's net worth is in their home, they'll tell you that of that $200,000 that these that the average American makes, uh the about 45% of their total net worth is in their home, which is wild because the most of their wealth therefore average American's wealth is subject to a wealth tax and in America that is the property taxes. So what you have is for the average American, they invest in their home in real estate and then how do property taxes work? The government goes, they look at your house, they use a simple algorithm and they say, "We've assessed that your house is worth $200,000. Your annual tax bill is now, you know, $10,000 a month or whatever it is." And the insane part is that's on the total value of your house. Not the net equity in your house, not less your mortgage, not the capital gains of your house, just the whole ass house, you get a tax bill for it. And somehow, again, the people on the right side of that chart, the right side of that chart, almost none of their net worth is in properties that are taxed. They probably own a couple of investment properties.

[00:21:37]They probably own a couple of They probably don't even own that many investment properties because they don't want to get sued when somebody slips and falls in front of their warehouse or whatever. They probably own three homes that no one ever sits in and they pay probably a fraction of a fraction of a fraction of 1% of their net worth in their tax their property taxes.

[00:21:58]The rest of their property is just simply completely untaxed. So again, the insanity of looking at the average American and going, "Hey man, you're going to be you're going to get wealth taxed. We're going to hit you with a wealth tax every single year.

[00:22:14]Auditors going to assess your net worth and then we're going to hit you with a bill." And I know what you're thinking.

[00:22:21]You're every argument the billionaires make is so hard for me to stomach because remember, California is trying to roll one of these out. And trust me, I have many gripes with tax and spend California, but hitting the the the billionaires with a tax is probably not a bad idea. A wealth tax probably needs to get rolled out here and for them, too.

[00:22:46]But all of their protests are so so hard to stomach when they go, "Oh, you're going to force me to sell my shares.

[00:22:55]You're going to make me tax unrealized gains. Listen, dude. For 50 years, American grandmas have had to sell their houses because they can't pay the property taxes. It happens all the [ __ ] time here. And they don't even get tax on capital gains or whatever [ __ ] thing, right? They need to pay.

[00:23:12]They take reverse mortgages. They sell their home and buy a cheaper home. They do what they have to do to pay. And that's the thing that drives me so crazy is that all of their gripes are things that regular households just take it.

[00:23:28]They just deal with it. And somehow though, if you're worth 7 to 12 to 15 to hundred billion dollars, you are you are so offended at the notion that the government could possibly tax an asset that you own. It's a joke. Now again there is a whole other discussion about what the government does with the money.

[00:23:52]The government should really be paying down debt with this money and probably focusing on something that is going to drive the economy and ensure Americans can continue to eat as kind of unemployment rises. Uh and we probably won't do that. will probably send it again um likely to Middle Eastern countries that uh lobby the United States or possibly just blowing up another country for no reason. All of these things are more likely than helping regular Americans. Anyway guys, thanks to GMAT, Dan Al, Sergey, Don, James B, Tre, Death, CM Holmes, all Lieutenant Folks. We really appreciate you guys. Catch you in the next one. Hit subscribe.