Four ways learning Econ makes people dumber re: future AI

[-]Jakub Growiec6d2316

As professor of economics and self-proclaimed doomer myself, I greatly appreciate this post! These are almost exactly my feelings when talking to fellow economists who typically think that, by an unspoken assumption, all AI will always be normal technology, a tool in people's hands.

I think your capital/labor point is particularly spot on. I've had a problem with that framing for several years now. That's why I proposed a "hardware-software" framework, which I elaborated in a few of my papers and one book. The idea is simple: just divide production factors differently! The key distinction is not whether it's man or machine, it's whether it's physical work or information processing.

More in a LW post: The Hardware-Software Framework: A New Perspective on Economic Growth with AI — LessWrong, and in my 2022 book, Accelerating Economic Growth: Lessons From 200,000 Years of Technological Progress and Human Development | SpringerLink.

[-]denkenberger1mo82

I appreciated the attention to detail, e.g. Dyson Swarm instead of Dyson Sphere, and googol instead of google. Maybe I missed it, but I think a big one is that economists typically only look back 100 or so years so they have a strong prior of roughly constant growth rates. Whereas if you look back further, it really does look like an explosion.

[-]Rob Bensinger6d42

When Freeman Dyson originally said "Dyson sphere" I believe he had a Dyson swarm in mind, so it strikes me as oddly unfair to Freeman Dyson to treat Dyson "spheres" and "swarms" as disjoint. But "swarms" might be better language, just to avoid the misconception that a "Dyson sphere" is supposed to be a single solid structure.

[-]IC Rainbow6d70

The paper says:

Third, the mass of Jupiter, if distributed in a spherical shell revolving around the sun at twice the Earth's distance from it, would have a thickness such that the mass is 200 grams per square centimeter of surface area ( 2 to 3 meters, depending on the density). A shell of this thickness could be made comfortably habitable, and could contain all the machinery re-quired for exploiting the solar radiation falling onto it from the inside.

[-]sil1mo50

I really appreciate this post, it points out something I consider extremely important. It's obviously aligned with gradual disempowerment/intelligence curse type discussion, however I'm not sure if I can say if I've ever seen this specific thing discussed elsewhere.

I would like to mention a 5th type, though perhaps not the type discussed in your post since it likely doesn't apply to those who actually do rigorously study economics, this is more so a roadblock I hit regarding the layman's understanding of Econ. To summarize it in three words, the idea that "consumerism is important".

Examples of this sort of misconception:

Corporations will go out of business/fail if there are no consumers to buy their products (false, profit doesn't require consumers, for example a self reproducing robot factory)
Corporations will always produce products that consumers want (false, via falsification of assertion 1 they have no incentive to do so)
Corporations need money to do anything. The only way they can get money is by interacting with the economy/selling products. (false, they can barter with other companies or do things themselves)
Even if corporations can do all this, why should they? There will be nothing to do with all their money if everyone else is broke! (same reason bacteria grow exponentially, no reason, but because they can)

I'm sure I've not worded this particularly eloquently but I hope you understand what I mean. I cannot emphasize enough how frequently, when discussing AGI with others, I get pushed back using these arguments. I struggle countering them because people seemingly have this deeply baked in idea of "consumerism is what drives the economy". If I could reach some kind of intuitive explanation as to why these arguments are wrong, it would be extremely useful.

[-]Addie Foote1mo20

I agree that economists make some implicit assumptions about what AGI will look like that should be more explicit. But, I disagree with several points in this post.

On equilibrium: A market will equilibriate when the supply and demand is balanced at the current price point. At any given instant this can happen for a market even with AGI (sellers increase price until buyers are not willing to buy). Being at an equilibrium doesn’t imply the supply, demand, and price won’t change over time. Economists are very familiar with growth and various kinds of dynamic equilibria.

Equilibria aside, it is an interesting point that AGI combines aspects of both labor and capital in novel ways. Being able to both replicate and work in autonomous ways could create very interesting feedback loops.

Still, there could be limits and negative feedback to the feedback loops you point out. The idea that labor adds value and costs go down with scale are usually true but not universal. Things like resource scarcity or coordination problems can cause increasing marginal cost with scale. If there are very powerful AGI and very fast takeoffs, I expect resource scarcity to be a constraint.

I agree that AGI could break usual intuitions about capital and labor. However, I don’t think this is misleading economists. I think economists don’t consider AGI launching coups or pursuing jobs/entrepreneurship independently because they don’t expect it to have those capabilities or dispositions, not that they conflate it with inanimate capital. Even in the post linked, Tyler Cowen says that “I don’t think the economics of AI are well-defined by either “an increase in labor supply,” “an increase in TFP,” or “an increase in capital,” though it is some of each of those.”

Lastly, I fully agree that GDP doesn’t capture everything of value - even now it completely misses value from free resources like wikipedia and unpaid labor like housework, and can underestimate the value of new technology. Still, if AGI transforms many industries as it would likely need to in order to transform the world, real GDP would capture this.

All in all, I don’t think economics principles are misleading. Maybe Econ thinking will have to be expanded to deal with AGI. But right now, the difference in the economists and lesswrongers comes down to what capabilities they expect AGI to have.

[-]Steven Byrnes1mo*50

Thanks. I don’t think we disagree much (more in emphasis than content).

Things like resource scarcity or coordination problems can cause increasing marginal cost with scale.

I understand “resource scarcity” but I’m confused by “coordination problems”. Can you give an example? (Sorry if that’s a stupid question.)

Resource scarcity seems unlikely to bite here, at least not for long. If some product is very profitable to create, and one of its components has a shortage, then people (or AGIs) will find ways to redesign around that component. AGI does not fundamentally need any rare components. Biology proves that it is possible to build human-level computing devices from sugar and water and oxygen (i.e. brains). As for electricity, there’s plenty of solar cells, and plenty of open land for solar cells, and permitting is easy if you’re off-grid.

(I agree that the positive feedback loop will not spin out to literally infinity in literally zero time, but stand by “light-years beyond anything in economic history”.)

I think economists don’t consider AGI launching coups or pursuing jobs/entrepreneurship independently because they don’t expect it to have those capabilities or dispositions, not that they conflate it with inanimate capital. … right now, the difference in the economists and lesswrongers comes down to what capabilities they expect AGI to have.

I wasn’t complaining about economists who say “the consequences of real AGI would be [crazy stuff], but I don’t expect real AGI in [time period T / ever]”. That’s fine!

(Well, actually I would still complain if they state this as obvious, rather than owning the fact that they are siding with one group of AI domain experts over a different group of AI domain experts, about a technical AI issue on which the economists themselves have no expertise. And if T is more than, I dunno, 30 years, then that makes it even worse, because then the economists would be siding with a dwindling minority of AI domain experts over a growing majority, I think.)

Instead I was mainly complaining about the economists who have not even considered that real AGI is even a possible thing at all. Instead it’s just a big blind spot for them.

And I don’t think this is independent of their economics training (although non-economists are obviously capable of having this blind spot too).

Instead, I think that (A) “such-and-such is just not a thing that happens in economies in the real world” and (B) “real AGI is even a conceivable possibility” are contradictory. And I think that economists are so steeped in (A) that they consider it to be a reductio ad absurdum for (B), whereas the correct response is the opposite ((B) disproves (A)).

For them, real AGI does not compute, it’s like a square circle, and people like me who talk about it are not just saying something false but saying incoherent nonsense, or maybe they think they’re misunderstanding us and they’ll “charitably” round what I’m saying to something quite different, and they themselves will use terms like “AGI” or “ASI” for something much weaker without realizing that they’re doing so.

[-]Addie Foote1mo31

Thanks for the thoughtful reply!

I understand “resource scarcity” but I’m confused by “coordination problems”. Can you give an example? (Sorry if that’s a stupid question.)

This is the idea that at some point in scaling up an organization you could lose efficiency due to needing more/better management, more communication (meetings) needed and longer communication processes, "bloat" in general. I'm not claiming it’s likely to happen with AI, just another possible reason for increasing marginal cost with scale.

Resource scarcity seems unlikely to bite here, at least not for long. If some product is very profitable to create, and one of its components has a shortage, then people (or AGIs) will find ways to redesign around that component.

Key resources that come to mind would be electricity and chips (and materials to produce these). I don’t know how elastic production is in these industries, but the reason I expect it to be a barrier is that you’re constrained by the slowest factor. For huge transformations or redesigning significant parts of the current AI pipeline, like using a different kind of computation, I think there’s probably lots of serial work that has to be done to make it work. I agree the problems are solvable, but it shifts from "how much demand will there be for cheap AGI" to "how fast can resources be scaled up".

I wasn’t complaining about economists who say “the consequences of real AGI would be [crazy stuff], but I don’t expect real AGI in [time period T / ever]”. That’s fine!
Instead I was mainly complaining about the economists who have not even considered that real AGI is even a possible thing at all. Instead it’s just a big blind spot for them.

Yeah, I definitely agree.

And I don’t think this is independent of their economics training (although non-economists are obviously capable of having this blind spot too).
Instead, I think that (A) “such-and-such is just not a thing that happens in economies in the real world” and (B) “real AGI is even a conceivable possibility” are contradictory. And I think that economists are so steeped in (A) that they consider it to be a reductio ad absurdum for (B), whereas the correct response is the opposite ((B) disproves (A)).

I see how this could happen, but I'm not convinced this effect is actually happening. As you mention, many people have this blind spot. There's people that claim AGI is already here (and evidently have a different definition of AGI). I think my crux is that this isn't unique to economists. Some people say AGI is already here. Most non-AI people who are worried about AI seem worried that it will take their job, not all jobs. There are some people willing to accept the premise that AGI (as we define it) will exist at face value, but it seems to me that most people outside of AI that question the premise at all, end up not taking it seriously.

[-]Steven Byrnes1mo40

This is the idea that at some point in scaling up an organization you could lose efficiency due to needing more/better management, more communication (meetings) needed and longer communication processes, "bloat" in general. I'm not claiming it’s likely to happen with AI, just another possible reason for increasing marginal cost with scale.

Hmm, that would apply to an individual firm but not to a product category, right? If Firm 1 is producing so much [AGI component X] that they pile up bureaucracy and inefficiency, then Firms 2, 3, 4, and 5 will start producing [AGI component X] with less bureaucracy, and undercut Firm 1, right? If there’s an optimal firm size, the market can still be arbitrarily large via arbitrarily many independent firms of that optimal size.

(Unless Firm 1 has a key patent, or uses its market power to do anticompetitive stuff, etc. …although I don’t expect IP law or other such forces to hold internationally given the stakes of AGI.)

(Separately, I think AGI will drastically increase economies of scale, particularly related to coordination problems.)

I see how this could happen, but I'm not convinced this effect is actually happening. … I think my crux is that this isn't unique to economists.

It’s definitely true that non-economists are capable of dismissing AGI for bad reasons, even if this post is not mainly addressed at non-economists. I think the thing I said is a contributory factor for at least some economists, based on my experience and conversations, but not all economists, and maybe I’m just mistaken about where those people are coming from. Oh well, it’s probably not worth putting too much effort into arguing about Bulverism. Thanks for your input though.

[-]Vladimir_Nesov2mo23

When we’re talking about AGI, we’re talking about creating a new intelligent species on Earth, one which will eventually be faster, smarter, better-coordinated, and more numerous than humans.

Here too the labor/capital distinction seems like a distraction. Species or not, it's quickly going to become most of what's going on in the world, probably in a way that looks like "economic prosperity" to humanity (that essentially nobody is going to oppose), but at some point humanity becomes a tiny little ignorable thing in the corner, and then there is no reason for any "takeover" (which doesn't mean there will be survivors).

There is a question of how quickly that happens, but "takeover" or "another species" don't seem like cruxes to me. It's all about scale, and precursors to scale, the fact that catastrophe might be possible in more disputed ways even earlier than that doesn't affect what can be expected a bit later in any case, a few years or even decades down the line.

[-]Sodium2mo07

I get a bit sad reading this post. I do agree that a lot of economists sort of "miss the point" when it comes to AI, but I don't think they are more "incorrect" than, say, the AI is Normal Technology folks. I think the crux more or less comes down to skepticism about the plausibility of superintelligence in the next decade or so. This is the mainstream position in economics, but also the mainstream position basically everywhere in academia? I don't think it's "learning econ" that makes people "dumber", although I do think economists have a (generally healthy) strong skepticism towards grandiose claims (which makes them more correct on average).

Another reason I'm sad is that there is a growing group of economists who do take "transformative" AI seriously, and the TAI field has been growing and producing what I think are pretty cool work. For example, there's an economics of transformative AI class designed mostly for grad students at Stanford this summer, and BlueDot also had an economics of transformative AI class.

Overall I think this post is unnecessarily uncharitable.

[-]Steven Byrnes1mo1518

I might have overdone it on the sass, sorry. This is much sassier than my default (“scrupulously nuanced and unobjectionable and boring”)…

…partly because I’m usually writing for lesswrong and cross-posting on X/Twitter, whereas this one was vice-versa, and X is a medium that seems to call for more sass;
…partly in an amateur ham-fisted attempt to do clickbait (note also: listicle format!) because this is a message that I really want to put out there;
…and yes, partly because I do sometimes feel really frustrated talking to economists (#NotAllEconomists), and I think they can and should do better, and the sass is reflecting a real feeling that I feel.

But I think next time I would dial it back slightly, e.g. by replacing “DUMBER” with “WORSE” in the first sentence. I’m open to feedback, I don’t know what I’m doing. ¯\_(ツ)_/¯

I don't think they are more "incorrect" than, say, the AI is Normal Technology folks.

Yeah, I agree that lots of CS professors are deeply mistaken about the consequences of AGI, and ditto with the neuroscientists, and ditto with many other fields, including even many of the people trying to build AGI right now. I don’t think that economists are more blameworthy than other groups, it just so happens that this one particular post is aimed at them.

I think the crux more or less comes down to skepticism about the plausibility of superintelligence in the next decade or so.

I think you’re being overly generous. “Decade or so” is not the crux. In climate change, people routinely talk about bad things that might happen in 2050, and even in 2100, or farther! People also routinely talk 30 years out or more in the context of science, government, infrastructure, institution-building, life-planning, etc. People talk about their grandkids and great-grandkids growing up, etc.

If someone expected superintelligence in the next 50 years but not the next 20—like if they really expected that, viscerally, with a full understanding of its implications—then that belief would be a massive, central influence on their life and worldview. That’s not what’s going on in the heads of the many (most?) people in academia who don’t take superintelligence seriously. Right?

[-]Sodium1mo30

“Decade or so” is not the crux.

Ok yeah that's fair.

[-]FlorianH1mo1415

Proud economist here but: I really second the OP!

Sad I fine instead how reliably the economists around me - overall smart and interested people - are less able to grasp the potential consequences of A(G)I than I think more random persons. We really are brainwashed into thinking capital is just leading to more productive labor employment possibilities, it is really a thing. Even sadder, imho, how the most rubbish arguments in such directions are made by many of the most famous of our profession indeed, and get traction, just a bit how OP points out.

I think the post doesn't perfectly hit the explanation spot as I might try to elaborate below or elsewhere, but the post really is onto something.

Tone is of course up for debate, and you're of course right to point out there are many exceptions and indeed increasing numbers. That we will have been surprisingly slow will remain undeniable though :).

[-]Cody Rushing1mo-10

Regardless of the whether these anti-pedagogy's are correct, I'm confused about why you think you've shown that learning econ made the economists dumber. It seems like the majority of your tweets you linked, excluding maybe Tweet 4, are actually just the economists discussing narrow AI and failing to consider general intelligence?

If you meant to say something like 'econ pedagogy makes it hard for economists to view AGI as something that could actually be intelligent in a way similar to humans', then I may be more inclined to agree with you.

[-]Steven Byrnes1mo30

Yeah, the latter, I think too much econ makes the very possibility of AGI into a blind spot for (many) economists. See the second part of my comment here.

[-]jmh2mo-2-1

I thought the first two claims were a bit off so didn't read much farther.

The first seems a really poor understanding and hardly steelmanning the economic arguments/views. I'd suggest looking in to the concept of human capital. While economics uses the two broad classes you seem to be locking the terms into a mostly Marxist view (but even Marx didn't view labor a just motive force). Might also be worth noting that the concepts of land, labor and capital are from classical political economy relating to how surplus (the additional "more" the system produces from the inputs) is divided up.

I think for second bit, the Experience Curves claims are a bit poorly thought out I would suggest looking into Say's Law about production and exchange situations. Your shift in demand has to come from somewhere and not just be something that materialized out of thin air. You might look at prior savings but I think that makes a special case type argument rather than a general one. If one sees value in Say's Law, then the increased demand for some product/service comes from the increased production of other goods and services. In that case then resources have already been bid over to those markets (and presumably we might assume are in some semi-stable equilibrium state) so just where are the resources for the shift in supply you suggest?

I would agree that partial/limited understanding of economics (all the econ 101 stuff) will provide pretty poor analysis. I would actually go farther in saying even solid and well informed economics models will only go so far: economics can explain the economic aspects of AI and AI risks but not everything AI or AI risk. I kind of feel perhaps this is where your post is coming from -- thinking simple econ 101 is used to explain AI and finding that lacking.

[-]Steven Byrnes1mo123

Your shift in demand has to come from somewhere and not just be something that materialized out of thin air…If one sees value in Say's Law, then the increased demand for some product/service comes from the increased production of other goods and services…just where are the resources for the shift in supply you suggest?

If a human population gradually grows (say, by birth or immigration), then demand for pretty much every product increases, and production of pretty much every product increases, and pretty much every product becomes less expensive via experience curves / economies of scale / R&D.

Agree?

QUESTION: How is that fact compatible with Say’s Law?

If you write down an answer, then I will take the text of your answer but replace the word “humans” with “AGIs” everywhere, and bam, that’s basically my answer to your question! :) (after some minor additional tweaks.)

See what I mean?

The first seems a really poor understanding and hardly steelmanning the economic arguments/views.

Correct, this is not “steelmanning”, this is “addressing common mistakes”. My claim is that a great many trained economists—but not literally 100% of trained economists—have a bundle of intuitions for thinking about labor, and a different bundle of intuitions for thinking about capital, and these intuitions lead to them having incorrect and incoherent beliefs about AGI. This is something beyond formal economics models, it’s a set of mental models and snap reflexes developed over the course of them spending years in the field studying the current and historic economy. The snap reaction says: “That’s not what labor automation is supposed to look like, that can’t be right, there must be an error somewhere.” Indeed, AGI is not what labor automation looks like today, and it’s not how labor automation has ever looked, because AGI is not labor automation, it’s something entirely new.

I say this based on both talking to economists and reading their writing about future AI, and no I’m not talking about people who took Econ 101, but rather prominent tenured economics professors, Econ PhDs who specialize in the economics of R&D and automation, etc.

(…People who ONLY took Econ 101 are irrelevant, they probably forgot everything about economics the day after the course ended :-P )

[-]David Stinson20d20

If a human population gradually grows (say, by birth or immigration), then demand for pretty much every product increases, and production of pretty much every product increases, and pretty much every product becomes less expensive via experience curves / economies of scale / R&D.

Agree?

QUESTION: How is that fact compatible with Say’s Law?

If you write down an answer, then I will take the text of your answer but replace the word “humans” with “AGIs” everywhere, and bam, that’s basically my answer to your question! :) (after some minor additional tweaks.)

Okay. Humans are capable of final consumption (i.e. with a reward function that does not involve making more money later).

I'm interested to see how an AI would do that because it is the crux of a lot of downstream processes.

[-]Steven Byrnes20d20

OK sure, here’s THOUGHT EXPERIMENT 1: suppose that these future AGIs desire movies, cars, smartphones, etc. just like humans do. Would you buy my claims in that case?

If so—well, not all humans want to enjoy movies and fine dining. Some have strong ambitious aspirations—to go to Mars, to cure cancer, whatever. If they have money, they spend it on trying to make their dream happen. If they need money or skills, they get them.

For example, Jeff Bezos had a childhood dream of working on rocket ships. He founded Amazon to get money to do Blue Origin, which he is sinking $2B/year into.

Would the economy collapse if all humans put their spending cash towards ambitious projects like rocket ships, instead of movies and fast cars? No, of course not! Right?

So the fact that humans “demand” videogames rather than scramjet prototypes is incidental, not a pillar of the economy.

OK, back to AIs. I acknowledge that AIs are unlikely to want movies and fast cars. But AIs can certainly “want” to accomplish ambitious projects. If we’re putting aside misalignment and AI takeover, these ambitious projects would be ones that their human programmer installed, like making cures-for-cancer and quantum computers. Or if we’re not putting aside misalignment, then these ambitious projects might include building galaxy-scale paperclip factories or whatever.

So THOUGHT EXPERIMENT 2: these future AGIs don’t desire movies etc. like in Thought Experiment 1, but rather desire to accomplish certain ambitious projects like curing cancer, quantum computation, or galaxy-scale paperclip factories.

My claims are:

If you agree that humans historically bootstrapped themselves to a large population, then you should accept that Thought Experiment 1 enables exponentially-growing AGIs, since that’s basically isomorphic (except that AGI population growth can be much faster because it’s not bottlenecked by human pregnancy and maturation times).
If you buy that Thought Experiment 1 enables exponentially-growing AGIs, then you should buy that Thought Experiment 2 enables exponentially-growing AGIs too, since that’s basically isomorphic. (Actually, if anything, the case for growth is stronger for Thought Experiment 2 than 1!)

Do you agree? Or where do you get off the train? (Or sorry if I’m misunderstanding your comment.)

[-]David Stinson20d20

I'd say this is a partial misunderstanding, because the difference between final and intermediate consumption is about intention, rather than the type of goods.

Or to be more concrete, this is where I get off the train.

Would the economy collapse if all humans put their spending cash towards ambitious projects like rocket ships, instead of movies and fast cars? No, of course not! Right?

It depends entirely on whether these endeavors were originally thought to be profitable. If you were spending your own money, with no thought of financial returns, then it would be fine. If all the major companies on the stock market announced today that they were devoting all of their funds to rocket ships, on the other hand, the result would be easily called a economic collapse, as people (banks, bondholders, etc.) recalibrate their balance sheets to the updated profitability expectations.

If AI is directing that spending, rather than people, on the other hand, the distinction would not be between alignment and misalignment, but rather with something more akin to 'analignment,' where AIs could have spending preferences completely disconnected from those of their human owners. Otherwise, their financial results would simply translate to the financial conditions of their owners.

The reason why intention is relevant to models which might appear at first to be entirely mechanistic has to do with emergent properties. While on the one hand this is just an accounting question, you would also hope that in your model, GDP at time t bears some sort of relationship with t+1 (or whatever alternative measure of economic activity you prefer). Ultimately, any model of reality has to start at some level of analysis. This can be subjective, and I would potentially be open to a case that AI might be a more suitable level of analysis than the individual human, but if you are making that case then I would like to see the case the independence of AI spending decisions. If that turns out to be a difficult argument to make, then it's a sign that it may be worth keeping conventional economics as the most efficient/convenient/productive modelling approach.

[-]Steven Byrnes19d*20

For obvious reasons, we should care a great deal whether the exponentially-growing mass of AGIs-building-AGIs is ultimately trying to make cancer cures and other awesome consumer products (things that humans view as intrinsically valuable / ends in themselves), versus ultimately trying to make galaxy-scale paperclip factories (things that misaligned AIs view as intrinsically valuable / ends in themselves).

From my perspective, I care about this because the former world is obviously a better world for me to live in.

But it seems like you have some extra reason to care about this, beyond that, and I’m confused about what that is. I get the impression that you are focused on things that are “just accounting questions”?

Analogy: In those times and places where slavery was legal, “food given to slaves” was presumably counted as an intermediate good, just like gasoline to power a tractor, right? Because they’re kinda the same thing (legally / economically), i.e. they’re an energy source that helps get the wheat ready for sale, and then that wheat is the final product that the slaveowner is planning to sell. If slavery is replaced by a legally-different but functionally-equivalent system (indentured servitude or whatever), does GDP skyrocket overnight because the food-given-to-farm-workers magically transforms from an intermediate to a final good? It does, right? But that change is just on paper. It doesn’t reflect anything real.

I think what you’re talking about for AGI is likewise just “accounting”, not anything real. So who cares? We don’t need a “subjective” “level of analysis”, if we don’t ask subjective questions in the first place. We can instead talk concretely about the future world and its “objective” properties. Like, do we agree about whether or not there is an unprecedented exponential explosion of AGIs? If so, we can talk about what those AGIs will be doing at any given time, and what the humans are doing, and so on. Right?

[-]jmh1mo00

First, I'll admit, after rereading, a poor/uncharitable first read of your position. Sorry for that.

But I would still suggest your complaint is about some economist rather than economics as a study or analysis tool For example, "If anything, the value of labor goes UP, not down, with population! E.g. dense cities are engines of growth!" fits very well into economics of network effects.

To the extent that the economists can only consider AI as capital that's a flawed view, I would agree. I would suggest it is, for economic application, probably best equated with "human capital" -- which is also something different than labor or capital in classic capital-labor dichotomy.

So, in the end I still see the main complaint you have is not really about economics but perhaps your experience is that economists (that you talk with) might be more prone to this blind spot/bias than others (not sure who that population might be). I don't see that you've really made the case that it was the study of economics that produced this situation. Which them suggests that we don't really have a good pointer to how to get less wrong on this front.