Definition
The Jevons paradox is a classic observation in economics: when technological progress makes a resource more efficient and cheaper per unit, total consumption of that resource often rises rather than falls. William Stanley Jevons raised it in The Coal Question (1865): more efficient steam engines did not reduce coal use but expanded it.
How it works
The mechanism is that efficiency gains lower the cost of use, which creates new applications and brings in more users, so demand expands to offset or exceed the per-unit saving. The logic applies to coal and oil, and equally to compute and tokens.
Usage
This usage appears in Next Token’s discussions, with the AI-compute sense already present in Weekly #001: discussing cheap and open-source models, Yang Pan said they “are expanding — this is the Jevons paradox — expanding the number of consumers, the scenarios, and the experiences,” meaning cheaper models do not reduce total consumption but push AI to more people and more use cases.
Related and confusable terms
It relates to Token Maxxing but sits at a different level: the Jevons paradox is a macroeconomic observation about efficiency and total consumption, while Token Maxxing is the deliberate behavior of individuals or teams maxing out their usage — the former explains the environment the latter lives in; they are not the same kind of concept.