Even if they had a materialist account of mind, why would their experience of mechanism lead them to believe mechanism could be sped up or greatly enhanced as in intelligence explosion scenarios? I'm not familiar with Greek atomist approaches to the mind, but later materialist ideas viewed the nervous system as analogous to a pneumatic system, with "animal spirits" or corpuscles being pumped into muscles from the brain. Given the mechanist analogy with a pneumatic system, why would they think this system could be greatly improved by operating on itself? Can any sense be made of a self-modifying pneumatic system? It's not until you get computation that self-improvement seems "obvious." It was Turing who first proposed that a self-modifying computer program could learn and improve and I'm not sure that you could come to that conclusion with anything less than what Turing knew, since you need both the generality of recursion theory and the notion of a mechanical implementation of it (the latter of which Turing supplied).
Also see: History of the Friendly AI concept.
The ancient atomists reasoned their way from first principles to materialism and atomic theory before Socrates began his life's work of making people look stupid in the marketplace of Athens. Why didn't they discover natural selection, too? After all, natural selection follows necessarily from heritability, variation, and selection, and the Greeks had plenty of evidence for all three pieces. Natural selection is obvious once you understand it, but it took us a long time to discover it.
I get the same vibe from intelligence explosion. The hypothesis wasn't stated clearly until 1965, but in hindsight it seems obvious. (Michael Vassar once told me that once he became a physicalist he said "Oh! Intelligence explosion!" Except of course he didn't know the term "intelligence explosion." And he was probably exaggerating.)
Intelligence explosion follows from physicalism and scientific progress and not much else. Since materialists had to believe that human intelligence resulted from the operation of mechanical systems located in the human body, they could have realized that scientists would eventually come to understand these systems so long as scientific progress continued. (Herophilos and Erasistratus were already mapping which nerves and veins did what back in the 4th century B.C.)
And once human intelligence is understood, it can be improved upon, and this improvement in intelligence can be used to improve intelligence even further. And the ancient Greeks certainly had good evidence that there was plenty of room above us when it came to intelligence.
The major hang-up for predicting intelligence explosion may have been the the inability to imagine that this intelligence-engineering could leave the limitations of the human skull and move to a speedier, more dependable and scalable substrate. And that's why Good's paper had to wait until the age of the computer.
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