Artificial intelligence (AI), and the uncertainty over what it can do, or what it might do, has generated yet another panic which ruling establishments can be relied upon to use as an excuse to grab power and money, dream up destructive “solutions,” and provide feeding for rent-seekers.
Writing in the Daily Telegraph, Ben Wright notes that Elon Musk was one of those who called for a “pause” in the development of AI (an idea, incidentally, that, if implemented, would have been good news for Xi and Putin). Nevertheless, his AI start-up, xAI has now developed:
[A] chatbot called Grok that is based on The Hitchhiker’s Guide to the Galaxy, designed to be sarcastic, answers “spicy questions that are rejected by most other AI systems” and gleans real-time information about the world by mainlining feeds from the social media site formerly known as Twitter.
If nothing else, that’s a reminder that the information generated by AI may well be subjective, something worth remembering as the administration introduces regulations to ensure that AI’s answers advance the cause of “equity.”
Wright reports that, queried about the contradiction between calling for a “pause” and launching his own platform, Musk replied that he knew the latter would be “futile,” but that he “wanted to be on the record as recommending a pause.” He might have added that the noisy calls for that pause also helped increase the fear surrounding AI, something that has had its uses, even if the pause was never likely to get anywhere.
Wright:
Here we all are, mired in economic gloom and struggling to boost productivity, when along comes a potentially transformative technology that could spark a new industrial revolution. And how does the UK attempt to establish its leadership in this new and exciting area? By organising an unremitting doom-fest that focuses on the possibility of AI stealing all our jobs before accidentally kick-starting nuclear armageddon. No, no optimism for us today, thank you very much.
There’s nothing new about this kind of technophobia. The science fiction writer Isaac Asimov dubbed it the “Frankenstein Complex”, arguing that Mary Shelley’s novel articulated deep-seated and irrational worries about the hubristic pursuit of dangerous knowledge. It’s why Shelley subtitled her book “The Modern Prometheus”. Her explicit message was: if you play with fire, you’re going to get burned.
And, sure, there is that risk. But if you play with fire you can also ward off predators, stay warm and explore harsher climates. Eating cooked food enables you to develop a more efficient digestive tract, free up energy for brain growth and thereby expedite the evolution of the species. So, there are a few pros to weigh against accidentally singeing your eyebrows. The same pattern has been repeating for millennia.
In more recent history, it has been workers with most to fear from the advent of disruptive technologies that devalued various forms of labour and replaced certain jobs. But, while such fears can definitely be realised in the short-term (steam-powered looms weren’t great news for textile workers), they tend to be overblown in the long-term.
Time and again, new inventions have prompted fears that machines will outperform humans at a lower cost. But, in aggregate, it never works out that way because all the new-fangled whatchamacallits create more jobs than they destroy.
Over the course of the whole twentieth century – a period of extraordinary innovation – the number of workers in the US increased from 30m to 134m, outpacing population growth. According to MIT’s David Autor, 60pc of all US workers have jobs that didn’t exist before 1940. In 2020, the World Economic Forum estimated that AI would eradicate 85 million jobs around the world by 2025 but create 97 million new ones.
Now, Musk may be right that AI will eventually be able to do every current job along with all the future ones yet to be imagined. But for that to happen there will have to be a complete inversion of the historical relationship between technological progress and job creation.
The idea that AI will create more jobs than it destroys may well be true, but the key question will be how long this will take.
In an article for National Review in 2016 (so before AI was in the headlines) about the historical impact of automation on employment, I noted this:
[P]ast technological transformations sometimes led to more lasting collateral damage than we now remember. We comfort ourselves with the knowledge that the Luddites were proved wrong, but we forget that proof of that was quite a while in coming. Economic historian Robert C. Allen refers to the decades that it took for real wages to rise in Britain after the technological changes of the early 19th century as “Engels’ Pause.” That’s the same Engels who argued in The Condition of the Working Class in England (1845) that the industrial revolution had made workers worse off. Over the long term, things changed for the better, but what happened in the interim should concern those worried about the political consequences of this latest technological revolution. These were the years not just of the Luddites, but also of the Peterloo Massacre, the Swing Riots, the Tolpuddle Martyrs, and the 1842 General Strike. By the time of the Chartists, a mass movement of the working class, an explicitly political agenda had evolved alongside struggles over pay. Engels took things even further. In 1848 he co-wrote The Communist Manifesto with Karl Marx, not an encouraging thought. The robots might one day deliver almost unlimited bounty, but the road to the Star Trek economy could be very rocky indeed.
I should add that there is a debate over how real the Engels Pause really was, but the evidence in favor of its existence seems convincing enough to me.
A central focus of my 2016 article was that one key difference between the jobs lost (or devalued) due to automation in the early part 19th century, and the jobs threatened by automation (which now includes AI) was that the former were working class jobs. In the 21st century, however, automation is not only destroying or devaluing working-class jobs, but those of people much further up the career pyramid. This raises the prospect that it is creating a society in which there has been “elite overproduction,” a phenomenon identified by the University of Connecticut’s Peter Turchin. I discussed that in the 2016 article, and again in 2020 and, most recently, last month. Elite overproduction, which to put it too simply, and to apply it to our own era, means that there are more people educated for “good” jobs than there are good jobs. It is a recipe for major social turbulence or worse. It has almost certainly contributed to Occupy, the rise of wokery, and the increasing radicalization (to the left) of younger people in high status (if not necessarily well-paid) employment or study. If you are trying to understand the strong leftward shift in, for example, the media that’s one place to start.
Elite overproduction can also work retrospectively: The legal jobs may have been there when earlier cohorts of lawyers qualified, but will they still be there as more and more legal tasks (discovery being one example) are automated?
Back in 2016, I wrote:
[W]hen we reach the point where even those who are still doing well see robots sending proletarianization their way, there’s a decent chance that something akin to “middle-class panic” (a phenomenon identified by sociologist Theodor Geiger in, ominously, 1930s Germany) will ensue.
Despite that, while there are some basic safety precautions that should be taken, for example, to limit the extent to which AI is integrated into nuclear weapon systems, it is hard to see how, short of adopting economic autarky, the U.S. could renounce or even slow down the broader advance of AI. A technology cannot be uninvented, and, if the U.S. applied the brakes, its geopolitical or economic competitors would do their best to take advantage, by pressing on with AI, probably recruiting American experts to help in their efforts to do so.
Thus it’s interesting to see that a number of European countries have been pushing back against the EU’s efforts to regulate AI development (with the harshest regulation, naturally, being reserved, EurAktiv reports, for “leading providers that currently are non-European companies”). The regulation would be “risk-based,” which, as typically interpreted in Brussels, a place where the precautionary principle is taken to absurd levels, would be bleak news for innovators.
The Telegraph’s Ben Wright doesn’t think that tech bosses’ calls for regulation of AI are entirely altruistic. He cites Andrew Ng, “a professor at Stanford University who taught machine learning to the likes of OpenAI co-founder Sam Altman”:
In a recent interview with the Australian Financial Review [Ng] argues big tech companies are over-egging the risks of AI in order to deliberately trigger heavy-handed regulation. Why? Because it would protect the large companies and tech billionaires, who have the wherewithal to deal with a thick rulebook, from having to compete with plucky upstarts that don’t.
Of course it’s entirely sensible to ensure AI is developed with well-designed guardrails in place. But Professor Ng worries the “bad idea that AI could make us go extinct” was merging with the bad idea that regulation could make it safer.
“When you put those two bad ideas together, you get the massively, colossally dumb idea [of] policy proposals that try to require licensing of AI,” he says. “It would crush innovation.”
Now, there’s a warning worth heeding.
Indeed.
And some updates about those jobs that AI may create/destroy.
John Burn-Murdoch in the Financial Times:
[F]or some, the fear that AI may one day take white-collar jobs is already a reality. In an ingenious study published this summer, US researchers showed that within a few months of the launch of ChatGPT, copywriters and graphic designers on major online freelancing platforms saw a significant drop in the number of jobs they got, and even steeper declines in earnings. This suggested not only that generative AI was taking their work, but also that it devalues the work they do still carry out.
Burn-Murdoch also points to some data from a recent Harvard Business School study:
BCG staff randomly assigned to use GPT-4 when carrying out a set of consulting tasks were far more productive than their colleagues who could not access the tool. Not only did AI-assisted consultants carry out tasks 25 per cent faster and complete 12 per cent more tasks overall, their work was assessed to be 40 per cent higher in quality than their unassisted peers. Employees right across the skills distribution benefited, but in a pattern now common in generative AI studies, the biggest performance gains came among the less highly skilled in their workforce. This makes intuitive sense: large language models are best understood as excellent regurgitators and summarisers of existing, public-domain human knowledge. The closer one’s own knowledge already is to that limit, the smaller the benefit from using them.
To me, that implies both job losses arising out of the higher productivity and perhaps some leveling (down) of salaries paid to the most skilled.
On the other hand:
[O]n a more nuanced task, which involved analysing quantitative evidence only after a careful reading of qualitative materials, AI-assisted consultants fared worse: GPT missed the subtleties. But two groups of participants bucked that trend. The first — termed “cyborgs” by the authors — intertwined with the AI, constantly moulding, checking and refining its responses, while the second — “centaurs” — divided labour, handing off more AI-suited subtasks while focusing on their own areas of expertise.
There may be life in the old human after all.
Then again (via the Daily Telegraph):
BT’s technology chief has sparked a row after comparing workers whose jobs are under threat from AI to horses being replaced by cars.
Union chiefs have hit out at the analogy made by Harmeen Mehta, BT’s chief digital and innovation officer, who described the impact of AI on the jobs market as “evolution”.
In an interview with Raconteur magazine, she said: “I don‘t know how horses felt when the car was invented, but they didn’t complain that they were put out of a job; they didn’t go on strike.
“It’s part of evolution. Some jobs will change, some new ones will be created and some will no longer be needed.”
Her comments come as BT pursues plans to cut up to 55,000 jobs by the end of the decade, with around a fifth of workers to be replaced by AI.
Mehta’s diplomatic skills need a little work: Maybe try some AI to help out, but keep clear of Grok. Now is not the moment for sarcasm.
The Forgotten Book
Capital Matters has a fortnightly feature, The Forgotten Book, which is written by our new National Review Institute fellow, the writer and historian, Amity Shlaes. We live in an age of short attention spans, and one of Amity’s objectives is to introduce readers to books or other primary sources that warrant a second look.
With her Capital Matters column, Amity will dedicate herself to sharing with Capital Matters readers older, forgotten books, along with new books that aren’t getting the attention they perhaps warrant.
Her latest column can be found here, and is focused on the disaster that befell a party disrupted by a charismatic outsider:
To win like Reagan, disavow Reagan and his narrative about America’s past. This is the political strategy toward which some younger Republicans are moving.
Reagan won the disillusioned center in 1980 by picturing America as a past and future land of opportunity. Winning the disillusioned of 2023 is also the goal of many of today’s Republicans. But some of them — in particular a group known as National Conservatives, or NatCons — would court their votes differently. Instead of promising workers or suburban families opportunity, the NatCons promise them protection.
Given the preoccupation with safety that has plagued the country since at least September 11, this dreary emphasis on protection is perhaps predictable. But the protection younger Republicans promise is protection from wrongs done by “elites.” In short, they are inviting a class war…
The Capital Record
We released the latest of our series of podcasts, the Capital Record. Follow the link to see how to subscribe (it’s free!). The Capital Record, which appears weekly, is designed to make use of another medium to deliver Capital Matters’ defense of free markets. Financier and National Review Institute trustee, David L. Bahnsen hosts discussions on economics and finance in this National Review Capital Matters podcast, sponsored by the National Review Institute. Episodes feature interviews with the nation’s top business leaders, entrepreneurs, investment professionals, and financial commentators.
In the 144th episode, David was joined by Dr. Andrew Abela, dean of the Busch School of Business at Catholic University, for a fascinating conversation on the challenges of teaching enterprise, business, and free markets in today’s higher-education environment. Economics, theology, and prudence all in one — this is a clear and succinct conversation you will not want to miss.
No Free Lunch
Earlier this year, David Bahnsen launched a new six-part digital video series, No Free Lunch, here online at National Review. In it, we bring the debate over free markets back to “first things” — emphatically arguing that only by beginning our study of economics with the human person can we obtain a properly ordered vision for a market economy…
The series began with a discussion with Fr. Robert Sirico of the Acton Institute. Later guests include Larry Kudlow, Dennis Prager, Dr. Hunter Baker, Ryan Anderson, Pastor Doug Wilson, and Senator Ted Cruz.
Yes, the six-part series now has seven parts.
Enjoy.
The Capital Matters week that was . . .
Inflation
Dragging grocery-store executives before Parliament might be good theater, but it’s unlikely to lower food prices. Canadian grocers aren’t responsible for food inflation. But Canadian lawmakers and the Bank of Canada have a great deal to answer for…
Taxation
The Economist found the same things I did when I talked to an Iowa legislator and tax-policy experts: Iowa conservatives have learned from the mistakes made in nearby Kansas and are cutting taxes responsibly.
In 2012, Kansas Republicans passed significant tax cuts that they said would spur economic growth. But Kansas paired those cuts with increased spending. The economic growth didn’t happen as promised, and the state experienced budgetary shortfalls. Voters have now elected and reelected a Democratic governor. Midwestern conservatives are extremely cautious not to repeat that political and budgetary mistake…
Endangered Species
The federal government only takes credit for 71 species having actually recovered, which is less than 3 percent of the total. But even that might be stretching it, Adler writes, because it doesn’t take into account factors other than the Endangered Species Act that could have caused recovery. “The American bald eagle, Arctic peregrine falcon, and American peregrine falcon recovered due to limits on hunting and the Environmental Protection Agency’s ban on domestic use of the pesticide DDT,” he notes. There are also multiple listings of the same species because different population segments are counted separately.
One of the primary reasons for the act’s poor performance is that it gets the economic incentives backwards.
Tariffs
For many years, a common rallying point for advocates of protectionism has been the historical role of the tariff in early American economic development. “Behind a tariff wall built by Washington, Hamilton, Clay, Lincoln, and the Republican presidents who followed,” Pat Buchanan argued in 1998, “the United Sates . . . [became] the greatest industrial power the world has ever seen — in a single century.” Oren Cass recently made the same point in passing: “For much of the nation’s history, while growing from colonial backwater to continent-spanning colossus, the U.S. imposed some of the world’s highest tariffs.”
The U.S. certainly did have high average tariffs up through the 1930s. And it did simultaneously transform into an economic superpower. But there are reasons to think that causal claims inferred from the correlation are spurious. The economic experience of the early American republic by no means offers unambiguous evidence of the efficacy of protectionism…
Wind Power
Much like a flock of seagulls heading precariously in the direction of wind turbines, offshore wind-power projects are increasingly flocking towards an untimely demise…
China
The Philippines is exiting China’s Belt and Road Initiative (BRI), the infrastructure-development project at the center of Xi Jinping’s international economic policy. Asia Times reports, “The Philippine Department of Transportation has announced the full termination of a series of big-ticket infrastructure projects with China in favor of Japanese and Western rivals.” Filipino president Ferdinand Marcos Jr. did not attend a recent BRI summit in Beijing.
Seven China-supported projects, including a major rail project, have been scrapped by the Filipino legislature…
Fiscal Policy
A recent CBO report revealed the true extent of the current deficits — the largest on record for an economy not in crisis. In funding the spending binge that drove the numbers, the White House says it favors a more progressive tax code where a larger share of income of the rich is taxed, and incomes below $400,000 are spared. Indeed, the president often attacks supposed tax breaks for the rich of previous administrations, and he repeatedly argues that higher-income individuals should be made to pay their fair share in taxes. However, actions speak louder than words, and his policies have put a larger burden on the poor to pay for our recent growth of government…
AI
President’s Biden executive order (EO) on artificial intelligence (AI) directs more than a dozen federal agencies to, among other things, “establish guidelines and best practices, with the aim of promoting consensus industry standards, for developing and deploying safe, secure, and trustworthy AI systems.” The order overestimates what regulators can accurately anticipate about a dynamic technology and ignores the challenges of actors outside the reach of U.S. law. It may also be unconstitutional in what federal agencies are allowed to do.
If you think bureaucrats do a better job encouraging innovation and mitigating risk than markets do, this order may seem reasonable…
Electric Vehicles
In September this year, the country’s latest Conservative prime minister, Rishi Sunak, pushed the ban of new traditional-car sales to 2035, bringing the U.K. in line with the EU and, at first glance, seemingly recognizing that Britain was in no shape to cope with the 2030 time limit. This apparent gesture to reality was celebrated by some, but condemned by Big Climate, Big Climate’s captive automakers, and the usual rent seekers. For all their hysteria, however, they had no real cause for complaint. Moving the deadline to 2035 was one thing, but what mattered more was the government’s “pathway” to the ban.
On September 23, I wrote that it would be “nuts to extend the ban’s deadline to 2035 (to be clear, it’s nuts to have any mandate), and then not extend the phase-in” (the pathway) that came with it.
Five days later, the government opted for nuts, or something close to it…
Regulation
Italian Uber will continue to face an enormous barrier-to-entry imposed by the government for the foreseeable future. In the United States, almost any American with a functional car and no criminal record can make money through ride-sharing. The Italian government prohibits this practice as “unfair competition.” But what truly is unfair in this situation? Is the desire of non-taxi drivers to contribute to the ride-share market unfair? Or is it preventing individuals from engaging in such work that is unfair?
Energy
Oil is traded on a global market. While the U.S. is a major producer, it does not have price-making power on its own. And oil companies’ decisions have a whole lot more to do with the price signals on that global market than they do with who lives in the White House.
None of this is a defense of Biden’s energy policy. As I wrote for the April 4, 2022, issue of National Review, Biden’s energy policy stinks, but not because it reduces oil production. (It hasn’t reduced oil production.)
It stinks because it tries to centrally plan the “energy transition” away from fossil fuels. In doing so, it wastes billions of taxpayer dollars on green-energy boondoggles and creates distortions in private energy investment as well. It foists unready technologies such as wind power and electric vehicles on the American people through government mandates and subsidies…
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