(Including Language Models and Agents)

We often say we want things to be cheaper: services, tools, housing, food. But if we look at how actors, agents, and processes are actually rewarded in our economic systems, there is very little real incentive for anything to become cheaper. In many cases, the system as a whole rewards higher prices and higher costs.

Who has an interest in low prices? An actor is interested in lower prices when they are buying something. As a customer, you benefit directly from cheaper goods and services. But the same actor has the opposite interest when they are selling, producing, or delivering something. Then higher prices and higher margins are better. This seems illogical at first, because you might think everyone would be interested in lower costs and prices in general. In reality, the interest flips depending on whether you are buyer or seller.

This is reinforced by how incentives, rewards, pricing models, and sales models are designed. They usually give better returns when prices and costs go up, not when they go down. The system as a whole now rewards increased cost. When prices rise, the value of property, assets, shares, currency – almost everything – goes up on paper. That looks good in portfolios, balance sheets, and valuations. It also means nobody is really rewarded for making things cheaper. Lower prices can be a threat, because they can reduce the measured value of what people and institutions already own.

The same dynamic hits agents and the language model industry, maybe even harder than some other areas. There is a lot of investment involved in building and running these systems: infrastructure, research, engineering, integration. When so much money is invested, there is pressure to sell services at a high price to “justify” the investment. In principle, you could invest a lot and still sell cheaply. But it cannot really become a trend that prices and costs go down steadily. If that happened, it would signal that the earlier investments and high valuations were not necessary or were overestimated. So the industry tends to protect higher prices instead of embracing falling costs.

To keep all of this going, more and more debt is taken on. People, companies, and states borrow money, which helps drive prices up even more. Debt allows actors to pay higher prices for a while, and supports rising valuations of assets and services. Over time, prices rise to the point where fewer and fewer can afford what they need. Housing, services, tools, and advanced systems become too expensive. At some point, the debt and the high price levels cannot be supported anymore, and the whole structure risks collapsing.

This logic affects how language models and agents are developed and offered. Technically, these systems could become cheaper and more accessible over time. But as long as incentives and rewards are tied to higher prices, higher valuations, and defending large investments, there is little reason for the industry to push costs down for everyone. The result is a system that does not naturally move toward “cheap and accessible,” but instead keeps moving toward “expensive and exclusive,” until almost nobody can afford it and the system breaks.