Why can't the AI boom be great news for everyone? Seriously?
It makes no sense to me that not needing to work so hard isn't actually a good thing for everyone and instead could destroy the ability of governments to provide for us.
I'm not going to stop asking about the money..
You may be worried about losing your job to AI. That's a reasonable concern. Geoffrey Hinton 'the godfather of AI' suggested on a bleak but brilliant podcast last week that plumbing might be a good career change. And he invented neural networks. He suggests that skilled physical labour is likely to be more valuable than skilled intellectual labour. i.e. what we all do. So we should be worried. Let's say you don't lose your job. Cool, congrats.. but it's very likely that lots of people will. Now 'good' unemployment levels are 3-4%, bad unemployment is 10%, and prophets of doom like the CEO of Anthropic suggested 50% of jobs leading to 20% unemployment, in a matter of years, at the World Economic Forum.
As a species we seem to be terrible at seeing into the future. Foreseeing consequence and adapting to meet it. It's like we're really bad chess players. Just move, wait, respond. Dumb way to play. You have to look at what might happen, and that might make you decide to change your next move. So I am going to keep asking about the money. And by the money I mean the governments money - your money - the tax revenue that pays for everything in your life.
Finding intelligent conversation on the topic has been frustrating - a bit like finding a job - there is little coherent leadership and I think that is kind of a tragedy. I've boiled the economics down to a simple question after reflecting on a lot of confused but interested faces. It is "What happens to the tax base?"
"What happens to the tax base?"
If every country in the world suddenly has lots of unemployed people who were previously in high paying jobs then those newly unemployed will no longer go on expensive holidays and buy expensive stuff, or go out for food, or take ubers. Their lack of money trickles down. Or doesn’t.
The newly unemployed probably all got degrees from expensive universities but now you don't need expensive universities because manual labour is less replaceable. And most of all they won't pay as much tax, or any tax. Trust me, I know about that. It's weird.
Meanwhile the companies being more productive aren't necessarily selling more stuff because this is happening everywhere all over the world. So unless there is unlimited demand for what you do - which is rare - then actually there is just more stuff. This is called abundance, or a surplus and should mean prices go down - like end of year sales. But this isn’t a good thing because, well, deflation is bad for growth.
Also, because companies are reducing headcount that means they need a smaller presence in your country - ideally no presence at all because then they don't have to pay corporate taxes in your country. Most of their costs will be tied up in AI product services whose companies are based elsewhere. (Probably wherever the tax is lowest).
So your country is going to get less tax from the people who used to pay the most (i.e. the people who aren't rich enough not to pay tax).
Your country is going to get less taxes from companies because they don't need to 'be' in your country as physically as they used to be.
But maybe there will be more, new jobs? Well AI doesn't create new jobs per se - because novel jobs that AI might create will, eventually, be done by AI. Unless it's plumbing. Literally, tech plumbing. Fixing stuff. The whole process simply turns AI into a funnel to create wealth by replacing an expensive resource (us) with a cheaper one (AI). It’s just business. There are no factories being created like in the industrial revolution to mop up the surplus. So in this model - the one everyone is predicting because they cannot imagine a system not based in free-market capitalism - what happens to the tax base? Where is the government's income coming from? It's not an unlikely scenario, in fact it is highly likely.
The big question
This asks a big question. It's an economic question. A policy question. It's a question of whether we have the wit and wherewithal to structure the growth of AI in an intelligent way for the good of humanity globally. Unfortunately that question is firmly in the hands of public companies who are legally obliged to create profit not make society fair and equitable AND politicians.
20% unemployment only means disaster because corporate employers are obliged to turn redundancy into profit - not into a societal benefit. I’m not even sure the shareholders actually want that - well pensioners & retail traders - they have jobs & family too on the whole. Ironically if society is damaged irrevocably, corporates lose their raison d'être - we won’t be buying iphones or hiring consultants when the next great depression hits. Shares tend to crash. It’s ALL bad. And we just can’t do anything?
It is perfectly possible to envisage a global legislative framework that could compels industry to make AI function as a driver for global equity, drive growth, and raise the world out of poverty. But will we? Can we? That's what keeps me awake at night. That we could do this right, we could make AI work for the good of the world, not by inventing nuclear fusion, but just by creating growth that equates to a new form of shared wealth. We could do that. But we’re not. We keep talking about the “threat”- that threat is us, us and our systems*. The threat is dogma - adherence rather than the alternatives. . I just wish we would actually see those leaders talk about the secondary consequences rather than just looking out for themselves.
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*I am putting aside AGI as a threat vector here.