Will AI cause massive unemployment? Unclear. Kevin Drum has been worried about this for over a decade. Here he presents another possibility suggested by the economist Noah Smith.
We’re going to make a 2 part distinction, followed by a 4 part distinction. Technology can be a substitute for human labor and it can also be a complement. Those who look back to the past where the complementary effect has predominated (so job gains exceed job losses) need to look harder. Consider the employment of horses. Via the law of comparative advantage, they still could have persisted for a while once cars were introduced - though cars were better at any job (they had absolute advantage) it made sense to use cars for their most productive uses in a world with scarce resources. So horses could have been shuttled to lower productive jobs, even if cars were better at everything. Instead horses were shipped to the glue factory.
Noah Smith adapts acclaimed economist Daron Acemoglu’s 4 part taxonomy of the world we’re heading to in this article (sub req beyond the first 11 interesting paragraphs):
- AI could replace human jobs . This is the one everyone tends to focus on. Acemoglu singles out “simple writing, translation and classification tasks as well as somewhat more complex tasks related to customer service and information provision” as candidates for job elimination.
- AI could make humans more productive at their current jobs . For example, GitHub Copilot helps people code. This might either create or destroy jobs, depending on demand.2
- AI could improve existing automation . Acemoglu suggests examples like “IT security, automated control of inventories, and better automated quality control.” This would raise productivity without taking away jobs (since those tasks are already automated).
- AI can create new tasks for humans to do . In a policy memo with David Autor3 and Simon Johnson, Acemoglu speculates on what some of these might be. They suggest that with the aid of AI, teachers could teach more subjects, and doctors could treat more health problems. They also suggest that “modern craft workers” could use AI to make a bunch of cool products, do a bunch of maintenance tasks, and so on. (As I’ll discuss later, it’s actually very hard to imagine what new tasks a technology might create, which is one big problem with discussions about new technologies.)
Number 1 and 2 get most of the attention. Number 4 is probably the most important. When a dramatically different technology like electricity or the internet is introduced, business typically tries to keep doing what they did before, only faster and better. That doesn’t work, and those efforts are abandoned. Replacing a steam engine with a dynamo will just cost you more. The benefits come when you disperse electric motors around your factory, but that involves a wholesale reshaping of the production process. More recently, Xerox invented the PC, but got stuck on the concept of the paperless office. Same office, just without paper. That’s not how things work.
Most AI discussions are based on the Data character in Star Trek. He’s a little nerdy, but generally speaking you can just slot him in. If artificial intelligence is like that, I’m guessing we’re screwed (though as Noah Smith pointed out last Spring, that’s not necessarily the case).[1] But if ChatGPT-AI is more like a Lovecraftian alien intelligence, then it will be different, and the technology is more likely to complement human skills. Then we’re in good shape. Probably. For now. So oppose Data and support different intelligences like the Terminator.
Anyway, what greedy capitalists want is secondary. Some of this is embedded in the technology, though understanding the world of #4 is probably not possible now.
[1] If AI does everything better, but requires massive amounts of electricity, then humans will be shunted into lower productive tasks, but will still have a job. Because it’s better to have AI doing important things like model the weather and build nuclear bombs than to be customer service reps. If we live in that world, then the key policy would be to put a cap on the electricity that data centers can use. That’s all that would be needed. Maybe “All data center and crypto electricity must be nuclear, solar, or wind and the local grid must be reliable,” would do the trick.