Why Swiss watches and Taylor Swift are AGI-proof

AGI economy series - Nr. 3

Illustration by ChatGPT.

According to an AI expert survey by Katja Grace et al. (2023) there is a 50% chance that “unaided machines can accomplish every task better and more cheaply than human workers” by 2047. Similarly, as discussed in “Will we ever run out of new jobs?”, AGI could outperform humans on learning new tasks, if it reaches human-level fluid general intelligence. Does that mean that the number of human jobs in the economy will eventually fall to zero?

No, there are some functions in the economy for which we humans inherently prefer humans over equivalent or even superior machines and, as long as humans own a share of the economy and direct significant financial resources, that may persist indefinitely.

1. How Swiss watches defy the regular economic logic

To highlight why there is likely still some role for human labor in an AGI economy, let’s look at some peculiar goods and services in today’s economy. Let’s start with French champagne and Swiss watches.

French Champagne

The Champagne region in northeastern France is renowned globally for its production of sparkling wine, but not just any sparkling wine—Champagne. Champagne is a symbol of luxury and celebration worldwide, featured in everything from The Great Gatsby and James Bond to Titanic. LMFAO sings about “Champagne Showers,” while Taylor Swift laments “Champagne Problems.”

The region of Champagne fiercely protects the name “Champagne”, ensuring that only sparkling wines produced under strict regulations within this specific geographical area can bear the coveted name. The Champagne designation is recognised and protected in more than 120 countries.¹  The “Comité Interprofessionnel du vin de Champagne” has been the legally recognized joint trade association for the Champagne industry since 1941. It represents all actors of the Champagne production and trade - growers, cooperatives and merchants - and it doesn’t hesitate to sue anyone who uses the Champagne name without authorization. 

In France this type of protected designation is called AOC (“Appellation d’origin controlée”) and it combines a specific geographic origin with the mandated use of traditional production processes. In the case of Champagne, the Comité Champagne writes that “harvests in Champagne are carried out entirely by hand.” Ostensibly, this is due to the superior vine characteristics associated with hand-picked wine. So, you may be able to produce robot-picked sparkling wine, but you cannot call it Champagne.

Swiss watches

Switzerland is the global capital of mechanical watches. The industry is particularly strong in the French-speaking part of Switzerland and has origins going back to the 16th century when French Protestant refugees, fleeing religious persecution in France, brought their watchmaking skills to Switzerland. High-end mechanical watches are masterpieces of engineering and craftsmanship with hundreds of tiny, precision-engineered components, including gears, springs, escapements, and balance wheels. There is no mass production of high-end mechanical watches, instead they require meticulous adjustment by skilled human watchmakers that assemble them individually.

A high-end mechanical watch can achieve remarkable precision. However, the nature of their mechanical components—gears, springs, and escapements—means they are subject to slight variations in timekeeping due to wear, temperature fluctuations, and positional changes. High-end mechanical watches that are certified as chronometers by official bodies like the COSC (“Contrôle Officiel Suisse des Chronomètres”) need to typically meet the accuracy standard of -4/+6 seconds per day, which translates to a potential variance of up to 3 minutes per month. Really high-end mechanical watches may have more stringent requirements. For example, the typical accuracy of Patek Philippe watches is within the range of -3/+2 seconds per day, or about 1 minute per month.

This is all impressive, but if the accuracy of time-keeping were the main function of a Patek Philippe it would not be able to compete. In 1967 the first quartz wristwatch was developed. When an electric current is applied to the quartz, it vibrates at a precise frequency of 32,768 times per second. This high-frequency oscillation allows the watch to keep very accurate time, typically losing or gaining only a few seconds per month. Furthermore, quartz watches are much less complex than mechanical watches. Most parts can be produced and assembled with minimal human intervention. 

Hence, you can buy a quartz wristwatch for as little as 10 USD, and it is an order of magnitude more accurate than a Patek Philippe Grandmaster Chime Ref. 6300A-010, sold for 31 million USD. Indeed, you probably have a quartz watch in your pockets, whether you know it or not. The internal real-time clock in smartphones is usually based on quartz. On top of that, smartphones connected to cellular networks and/or connected to the Internet can synchronise their time with network-provided time signals, often coming from ultra-precise atomic clocks. So, your smartphone watch is both easier to read and significantly more accurate than a mechanical watch. Yet, people still pay millions for hand-assembled mechanical watches.

When labor cost is an asset

What is going on here? High-end champagne and high-end mechanical watches both fall into a category called “Veblen goods”, a type of luxury good for which an individual's demand increases as the price increases. This is an apparent contradiction to the law of demand. Whereas regular products compete on quality and affordability, high prices are not a weakness but an asset for Veblen goods. This peculiar demand curve only holds within a price range that depends on the wealth of the individual. Veblen goods have three main characteristics:

1. Signalling and conspicuous consumption: Veblen goods are usually high-end, non-essential items and consumers (inadvertently) buy them to signal wealth and status to their peers and potential mates. The high price itself is a desirable feature of the product because it is a costly signal to publicly display economic power. The goal is to outprice the economic classes below you. To quote Jean-Noël Kapferer and Vincent Bastien, two leading luxury researchers: “Luxury converts the raw material that is money into a culturally sophisticated product that is social stratification”.

2. Artificial scarcity: Producers of Veblen goods deliberately limit supply. In an age of automated abundance and mass production, the only way to not go the way of the pineapple² and turn from a luxury good into a cheap, everyday commodity is to artificially maintain scarcity. Maintaining a protected, artisanal, labour-intensive process can be one way to do this. High-end mechanical watches neither offer the most convenient way to read time nor the most accurate way to measure time. Instead, high-end mechanical watches offer scarcity backed by complexity and human labor-intensivity. 

   Human labor intensive goods also inherently confirm an elevated relative standing in the human socioeconomic hierarchy. To again quote Kapferer and Bastien: “Luxury being a social phenomenon, and society being composed of human beings, luxury, whether object or service, must have a strong human content and must be of human origin. (...) to qualify as luxury, the object or part of it must be handmade.”

3. Investment value: Once a producer has credibly ensured the maintenance of artificial scarcity and brand value, Veblen goods become not only attractive for signalling but also as investments. A rare bottle of high-end alcohol, a luxury watch, a luxury handbag, a painting from a famous painter (preferably dead so that the supply is fixed), natural diamonds, or digital collectibles (NFTs) can all potentially gain in value over time and a part of the demand comes from buyers that primarily see them as investments and want to maintain them in pristine condition rather than consume them.

So, artisanal luxury goods with artificial scarcity and a social signalling function are one way in which some human labor could persist despite being economically obsolete. Another potential source of labor persistence comes from social interests, events, and experiences. For this, let’s look at chess and Taylor Swift.

2. Chess is nothing without its people

Chess has long been a symbol of human intellect and strategic thinking, making it a natural challenge for artificial intelligence (AI) researchers. From the early days of AI in the 1950s, AI pioneers viewed chess as an ideal domain to test and demonstrate the capabilities of machine intelligence:

• In 1997, IBM’s Deep Blue defeated the reigning world champion Garry Kasparov in a highly publicized match, marking the first time a computer had triumphed over a world champion in a standard-time game.

• Following his defeat, Kasparov introduced Advanced Chess, or "cyborg chess," combining human intelligence and computational power for superior play. Initially, human intuition complemented computer analysis, but as engines grew stronger, the computer's role became dominant, and interest in centaur chess waned.

• In 2017, DeepMind's AlphaZero signaled another milestone by achieving superhuman play through self-learning, surpassing traditional engines like Stockfish without relying on handcrafted rules or human data, illustrating AI's new level of autonomy.

Yet, despite the overwhelming dominance of AI in chess, human interest in human chess play remains stronger than ever. The game has seen a resurgence in popularity, triggered in part by the Netflix series “The Queen’s Gambit”, and driven by new online chess play platforms such as “chess.com” that allow for short chess games anywhere, and charismatic chess YouTubers. The best chess players in the world are all AI programs. However, humans are barely interested in watching Stockfish play AlphaZero. Instead they are interested in the competition between and connection with human chess players, such as Levy Rozman, Hikaru Nakamura, the Botez sisters, Magnus Carlsen, or Anna Cramling. 

Machine superiority in chess and other cognitive sports is a recent phenomenon. However, if we think about it, human muscles have been outmatched by artificial energy for a long time. Humans are not competing at the frontier of what is technologically possible in most olympic disciplines:

• Automobiles can cover anything from 100 meters to the full marathon distance in a fraction of the time it takes the fastest human runners.

• Motorcycles can effortlessly surpass the speed of even the fastest cyclists.

• Machines like underwater scooters or even small watercraft can easily outpace human swimmers.

• Motorboats can travel much faster than human-powered rowing boats.

• Hydraulic or pneumatic lifting machines can lift weights far beyond human capability.

• Reusable rockets can “jump” high enough to leave the atmosphere and land again, far outstripping human high jumpers with and without poles.

• Automatic bows with laser targeting can achieve far greater accuracy than a human using a bow.

And yet, billions of humans tune in to watch the Olympic Games, making it one of the most-watched events worldwide. So, our interest in sports does not depend as much on the absolute performance level as it depends on the human conflict, connection, spirit, perseverance, and the stories that we weave around them. Physical and mental human competitions from chess, to the Olympics, to the paralympics, to the Spelling Bee, to the Mental Calculation World Cup, to the International Mathematical Olympiad, to high-speed telegraphy, to “The International” in Dota 2 can all continue indefinitely under machine superiority.

3. The fans are part of the Taylor Swift experience

In the early 20th century, the advent of recorded music sparked concerns that it would diminish the role of live musicians. For example, the renowned composer John Philip Sousa warned that “the country band with its energetic renditions, its loyal support by local merchants, its benefit concerts, band wagon, gay uniforms, state tournaments, and the attendant pride and gayety, is apparently doomed to vanish in the general assault on personality in music.”

Yet, here we are more than a century later and Taylor Swift’s “Eras Tour” has become the first tour in history to gross over 1 billion USD. So, what brings so many to pay so much to see Taylor Swift live? It cannot be the sound quality. If you want to enjoy Taylor Swift’s songs with the highest possible audio quality, you will not find this at her concerts but at home with high-end headphones. Instead her tour seems to be a cultural phenomenon, where her mostly female fans that call themselves "Swifties" engage in elaborate preparations for the shows, including building and exchanging friendship bracelets, wearing themed outfits and sharing their experiences on social media.

Human connection and social signaling in live events

Humans are social animals and like most other animals it seems that we have a special interest in other beings of our own kind. I have no doubt that anthropomorphized AIs pretending to be the friends and even romantic partners of humans will compete with content producers and influencers for parasocial relationships. Still, there is something around “authentic experiences” that puts a premium on the value of real, live human interactions and the unique atmosphere created by being physically present at an event or performance. At least for now, some emotional and social aspects of live in-person events cannot be easily replicated, such as multi-sensory experiences, unpredictability, and the ability to meet, network, and share the experience with others in-person.

If we want to be more cynical we might call some of them "Veblen experiences", highlighting that they are not only sought after for the direct enjoyment they provide but also for their ability to signal and filter for social status and prestige. Events in this category are high-end, and they have limited access and high costs to create a sense of exclusivity. Participation signals high social status, wealth, and cultural capital and these experiences are often public or shared on social media. Events in this category might include VIP concerts, sports events, luxury travel, gourmet dining, or high-end fashion shows. The best view of a prestigious sports match is not in the stadium but at home, where you can see any goal replayed from 10 different angles. Still, many are willing to pay thousands of USD for the in-person experience. So, there is something around this that might persist in a machine-dominated economy.

4. We cannot all make Swiss watches or be superstars

The long-term persistence of some forms of human labor for artisanal luxury goods, elite sports and in-person high-end events even in a “post-labor” economy is worth noting. However, we should also acknowledge that Veblen goods and experiences only represent a very small fraction of the current world economy. For example, the personal luxury goods market, which is still significantly broader defined than Veblen goods, had a volume of about 362 billion $ in 2023, that’s roughly 0.3% of the global GDP (ca. 105 trillion $ in 2023). Veblen goods and experiences may have some room to grow under heavy inequality. However, it would be an inherent contradiction for them to represent a significant fraction of the economy. Their entire point is that they are defined by scarcity and exclusivity. Similarly, not everyone can be a chess or music superstar with a million human fans.

Hence, I would argue that “AGI-proof” jobs are unlikely to ever provide an income basis for a significant share of the human population. To echo economist Daniel Susskind³: If we think about “post-labor” economics we should not think about “a world without any work at all”, but rather “a world without enough work for everyone to do”. 

Still, this list of “AGI-proof” jobs is not exhaustive. For example, Anton Korinek & Megan Juelfs have suggested that we may want to keep human judges regardless of machine performance. Roger Dearnaley has suggested the “oldest profession” may also be one of the last.

What other jobs do you think might be “AGI-proof” and why?

1. The main exception is the United States, where American producers that had already used the term “champagne” before 2006 are still allowed to use them as long as they also include the wine's actual origin (e.g., "California Champagne") to avoid misleading consumers.

2. When European explorers first encountered pineapples in the New World, they were astounded by its unique taste and appearance. The challenges of transporting pineapples over long distances without spoiling further increased their allure. So, in the 17th and 18th centuries, the pineapple became a key status symbol among European nobility. It was depicted in paintings, featured in the architecture of grand estates, and so expensive that the rich would rent pineapples to show them off at their lavish banquets without the full expense of ownership. Then came mass production, which transformed the pineapple from an exclusive luxury to an everyday commodity. So, the pineapple went from being the “fruit of the Gods” worshipped by nobility to being so ubiquitous that common “peasants” on the Internet insult it as not being worthy as their Pizza topping.

3. Daniel Susskind. (2020). A World Without Work: Technology, Automation, and How We Should Respond. Henry Holt and Co. pp. 5&6