The other part of the bubble is assuming working in projects that allow disclosing any code or project details to a generic third party with that kind of power asymmetry.

Thanks for the alternative perspective.

I think I am in the middle. I can afford $200/m but it'd be a brainer. And I don't pay that as I barely use home AI enough to warrant it.

I am also amazed at the richer end of HN but now I realize I am priviledged. Earned it? Like fuck I did. Lucky to be born a geek in late 20c. I'd be useless as a middle ages guy.

If I found myself in the middle ages I’d just become a blacksmith or a miller.

Do you have the genetics for that? It takes a lot of raw strength, and not that much intelligence.

That's why ai is for the "rich". Poor people or later on middle class will be left behind....

Nah, that's why you cannot not afford the subscriptions these days. Whatever your needs, ever since Claude Code became a thing, subscription costs come out massively cheaper than pay-as-you-go per-token API pricing. Also SOTA models are so much better than anything else, that using older or open models will just cost you more in tokens/electricity than going for SOTA subscription.

Subscriptions are definitely middle-class targeted. $20/month is not much for the value provided, at least not in the western world.

But if by "rich" you just mean "westerners", then in this sense, the same is and has always been true for computing in general.

The subscriptions are purposely sold for less than cost. The subsidy will end some day.

We'll cross that bridge when we come to it. Especially in context of discussing living at different economic strata, customers are neither expected nor supposed to voluntarily overpay out of a belief this will make an industry not try to rugpull everyone at some point.

Not sure. AI is sort of car ownership price. I think while that ain't poor, that is middle class.

So like if you want to start a business of any sort the AI sub is still peanuts.

AI is a car, or a dog, or a mild social life, or a utility bill level of cost. And thats for the level needed for a sane typical developer. (AI maximalists need 250k/y, let them slop it out)

It is not a Cessna, an infinity pool or a 1 month vacation.

It’s a good reminder. Claude Max costs about as much as the global poverty line ($3/day.) I think it’s okay to invest in it, but we should try to make sure it’s worthwhile, and also invest in charity.

$200/mo is a lot, sure, but the shocking part of that comparison is your rent. I didn’t know $400/mo apartments still existed. For most people in the US and EU, $200 would be closer to 15%-20% of rent I think? My cell phone bill for my family is almost $200/mo.

Last year, at first, $200 seemed crazy. Now that I’m getting addicted to coding agents, not so much. Some companies are paying API rates for AI for employees, and it’s a lot more than $200/mo. It seems like funny money, and I’m not sure it’ll last.

As you've probably guessed, I don't live in the US, so the price are drastically different. I live in the EU. And for my case, I love in really small flat for some years, so the rent couldn't go up a lot.

> most people in the US and EU, $200 would be closer to 15%-20% of rent I think?

> the average rent is north of $1000/mo.

I really don't know where you get your number from, $1000/mo average is really wild to me. With this amount, you can rent a flat for a whole family in the heart of the city. Nobody of my more well-of friends have a rent this high.

Or maybe you have some capital city in mind like Paris or London?

A friend’s 2BR in Palo Alto is $6K/mo. It’s a cute little mid-century house with a small backyard, but no AC or garage.

The salaries are good in SCV, but the local economy is calibrated to absorb the money in proportion.

> I really don’t know where you get your number from

I googled it. According to Google, London’s average rent is around €2,700, around 3x higher than the average. I assume the number of people living there and paying that much balances against the number of people like you living in smaller towns and rural areas who are paying lower rents.

But yes, rents have become very high everywhere. I live in a medium sized city in the US not anywhere near a coast, and most kids attending the local university are paying over $1000/mo for a 1-bedroom place. The primary way to get cheaper rent is to have flat-mates, try to get 3 or 4 people into a place that rents for, say, $2500/mo.

I was paying $2k/mo in San Francisco 25 years ago for a place that was maybe 90m^2, and since then rents have gone way up. Google says the average now is just under $4k/mo. In some nicer neighborhoods, some people pay $8k/mo for a single bedroom. This big-city rent in SF, LA, NY, Chicago, Miami, etc. balances against the small towns in the US where you can find a room for $500/mo, which is why the average is above $1k.

It is my belief that rent price scales with the leftover income people have after they've paid for other necessities. Ie if you're from a poorer country/area then things like milk and gasoline will cost a similar amount (maybe 2x difference), but rent will cost a lot less. As people in a country get richer they start paying a larger and larger share of their income as rent of various forms.

Even the US has places with cheap rent/housing. The downside is that there's no (well-paying) work nearby.

It’s true that average rent prices are regional and poorer areas have lower rents, but that doesn’t tend to make much difference in urban areas and large cities where the majority of people live now. Why do you feel that rent scales with disposable income? Economists generally say the opposite based on housing being a core necesessity; that people pay rent in proportion to their income, and only what’s left over the the disposable amount. That’s why we have the 30% rule, for example.

You’re technically correct, btw, rental housing is a market and is subject to market forces, meaning what people are willing to pay. I’m just not so sure about framing rent as being lower priority than other necessities. And rent prices have been increasing faster than other necessities, and faster than income, so that might be a confounding factor in your argument.

Still, my initial reaction above is due to the fact that in the US and in Europe in most large cities, the average rent is north of $1000/mo.

>Why do you feel that rent scales with disposable income?

Because I'm from a country where 30 years ago average income was $220/month. Today it's $2475/month.

A large portion of people live in the same houses and apartments now as people did back then. The housing hasn't changed, but today renting a 70 sqm apartment costs you $800/month - the same apartment that people in 1996 lived in with their $220 monthly wage.

The reason why I think that housing is "lower priority" when setting a price is because the sale/rent price for housing is more divorced from the "manufacturing cost" compared to other goods. This happens for a number of reasons:

1. Housing scales with money. Most people live well beyond the "minimum required" for housing. You could survive living in a tiny room with a shared bathroom, but most of us want more than that. Compare this to food - rich and poor people will drink a similar amount of milk. You can't really spend 100x on milk and actually get appreciable benefits from doing so. You can with housing. (Same goes for most other goods. A $3 million car is not 100x better than a $30k car, it's not even 10x better.)

2. Housing is non-fungible. You can't have two houses in the same location. Food, furniture, and electronics are fungible.

3. Housing doesn't depreciate with use compared to other goods. You drink milk and it's gone. You drive your car and it degrades. Your house degrades simply by existing - your use of it will degrade it a little, but living in it also means you do maintenance, like cleaning, that will help keep its value.

4. Because of the above, housing is an asset that people invest in. This is a bit circular, but it also means a lot of people don't want to see housing become cheaper.

>And rent prices have been increasing faster than other necessities, and faster than income, so that might be a confounding factor in your argument.

Because the cost to produce other necessities hasn't increased as quickly as incomes have increased. We have better technology and better economies-of-scale that has made the cost of other goods cheaper. Now people have more money left over to pay for rent, so they do.

Yes rent (like everything) does scale with inflation. All the absolute numbers you’re using make reasoning about this more difficult than necessary. It’s better to use percent of income, in order to get a sense for whether today’s rent is more or less expensive for the renter. That said, you gave an example from 1996 of a $220/mo avg. income and $220/mo rent, which doesn’t add up. Google tells me that as a percent of income, rent has increased over the last 30 years. You might be right; that might be in part enabled by the cost of some goods going down. But the price of food hasn’t gone down. Higher rents also might be in part changes in spending habits, so you’d need to show those haven’t changed.

I used the wrong word, btw. The word I meant to use was ‘discretionary’ income. I think that’s what you’re suggesting, that rent is discretionary? ‘Disposable’ income is what’s left after taxes, but ‘discretionary’ income is defined as being what’s left after paying for things like rent, transportation, food, and utilities (https://www.investopedia.com/terms/d/discretionaryincome.asp)

It’s true the amount one spends on rent is a bit elastic, and that is also true for most consumer goods. The problem with your argument is that rent is not optional, like most consumer goods are. There are very few things that one cannot go without paying for at all, and rent is one of those.

If I understand correctly, what you’re suggesting is the reverse of how most people including economists think of rent. This discussion does depend heavily on what “other goods” you’re actually talking about. Can you provide more concrete examples, and show that they really are getting less expensive over time? Is your hypothesis supported by Eurostat’s HICP or the World Bank’s data on inflation and consumer prices?

In the US/Western Europe? Because for devs especially in the former, $200 is pocket change, especially for a core productivity tool. And the rent would be in the $1200 to $3000 easily. Same for houses. Maybe not in NY or SF, but in most of the US there's no shortage of house spaces and redundant rooms.

I've seen those comments about $200/month and empty rooms here, so I suppose they mainly come from the US, yes.

So yes, you describe a situation that I feel like a lot of people here don't understand is not the norm.

I compared the subscription with my rent precisely because it's easier to compare: with your numbers it would be like paying from $600 up to $1500 / month. Pretty hard to justify.

> Because for devs especially

Are you not a dev? If not, what would you use a coding tool for? They still require handholding for anything largeish. Still much cheaper than outsource.

You think I don't understand that? I'm friends with people who make little more than that amount per month.

But it's not all that relevant to this conversation. It's not like this is the first time economic inequality is a thing.

It's just as relevant to me factoring in your salary the next time I go buy a car.

First, I've assumed you were in the bubble I described, but that's not the case, so sorry bout that.

Also, I think it's relevant to the conversation.

You replied to someone who said that "you" (undirected pronoun I suppose) can't afford the SOTA that the $200/month Anthropic subscription comes with a ton of usage. So I interpreted it as a general statement. It wasn't what you meant?

I'm a bit lost about who you're talking to/about in your first comment: the person you respond to, a general statement for everyone reading, or yourself?

I assume when somebody says you and is not talking about anyone in particular they mean that it's infeasible for virtually everybody which is certainly not the case. Also you conveniently disregarded the fact that is available on the $20 per month plan.

Okay, I understand better. I interpreted your answer as "well, it's $200, everybody can afford it". Clearly a misunderstanding.

Going back to the $20 plan, yes, I agree it's much more accessible.

I didn't talk about it because I've seen a lot of comments here, on blogs, on social media about how a $200 subscription for Claude is a no brainer. And it got on my nerves, so I wanted to tell how much money it can be. To you (and it was misguided reading your answers), and to concerned HN commenters in general.

For me I pass the token costs off to my clients. Not everyone is a hobbyist burning their own cash on personal projects

I'm not sure I've correctly understood what you're implying.

If it's that I'm not working, well, I'm employed.

It it's that I'm not working enough to not have this money... Well, we still go back to the bubble. Not everywhere in the world you can easily find a job that pays you enough, even if you accept to work more. And the employer will not accept to give developers a $200/month subscription, even less for personal use.

If it's that I'm not working enough and I should go freelancing to work as much as I want and get rich (I'm extrapolating). Well, you're right, I could do that. But (at least at first), I would work a lot more for much less money. And even if I become a recognized freelancer, it doesn't change the fact that I'll earn less money compared to the baseline of SF, or even the USA in the tech sector in general. So, bubble again. I could also, like someone said, put the tokens cost into my hourly/daily rate, but I'll be much more expensive than other freelancers.

Also, but that's a "me case" compared to my previous points, health issues can greatly affect how much work you can do.

> I could also, like someone said, put the tokens cost into my hourly/daily rate, but I'll be much more expensive than other freelancers.

Do you have any evidence of that? I think the OPs are assuming this as a premise so their logic is probably valid but may not be sound logic for you.

I don't have any hard evidence, no.

Instinctively, if we suppose all the newbies freelancers without any reputation start with the same lowest rate possible to be competitive, passing additional cost to my client will mechanically increase my rate. Putting me in disadvantage about getting any work. And with the difference of monetary value for the same price of tokens, the rate delta is higher.

It's a simplified model of the world, but it feels like simple economic rules.

I assume the comment I'm referring to was written by someone who is already established and for Wich the token cost passing is lower relatively to my environment.

I guess what was meant is that those tools are generally bought by the employer

Calm down. I meant that my work covers my pro subscription.

Ha, I misunderstood your comment: in my own language these two words without more context have a very different connotation.

Also, I don't think I was aggressive?

I guess all those people who live in not-SF just can't be bothered to succeed!

$20/month is not above middle class in most of the world.

$200/month is, but you don't need that for anything except beyond-casual use of coding agents.

I’ve never been to SF, wouldn’t know anything about it.

To be fair if you think only people in SF can afford that you do kind of live in a bubble.

Nobody in this thread claimed that.

The person you were replying to was not talking about SF but you specifically called out SF so you were implying that

The thread started with "$200 is a lot for most of the world", the person I was replying to said "no it's not, now anyone can sell to billions of people", and I said "company success being concentrated in SF shows that that's not true".

I didn't say "only SF can afford $200/mo".

>company success being concentrated in SF shows that that's not true

You didn’t say that until now.

I think you’re wrong, SF being particularly good for big companies might indicate something if the conversation was about succeeding at a grand scale, not about being able to afford $200/mo

"I guess all those people who live in not-SF just can't be bothered to succeed!"

I explained it in my previous comment, I'm not going to explain it more than that.

Again, if you think that only successful companies are in SF you live in a bubble.