AI-phobia - a convenient way to ignore the real problems

Artificial intelligence - AI - is a big topic in the media, and for good reasons. The underlying technologies are very powerful and will likely have a strong impact on our societies and economies. But it's also very easy to exaggerate the effects of AI. In particular, it's very easy to claim that AI will take away all of our jobs, and that as a consequence, societies are doomed. This is an irrational fear of the technology, something I refer to as AI-phobia. Unfortunately, because it is so appealing, AI-phobia currently covers the pages of the world's most (otherwise) intelligent newspapers.

A particularly severe case of AI-phobia appeared this past weekend in the New York Times, under the ominous headline "The Real Threat of Artificial Intelligence". In it, venture capitalist Kai Fu Lee paints a dark picture of the future where AI will lead to mass unemployment. This argument is as old as technology - each time a new technology comes along, the pessimists appear, conjuring up the end of the world as we know it. Each time, when faced with the historic record that shows they've always been wrong, they respond by saying "this time is different". Each time they're still wrong. But, really, not this time, claims Lee:

Unlike the Industrial Revolution and the computer revolution, the A.I. revolution is not taking certain jobs (artisans, personal assistants who use paper and typewriters) and replacing them with other jobs (assembly-line workers, personal assistants conversant with computers). Instead, it is poised to bring about a wide-scale decimation of jobs — mostly lower-paying jobs, but some higher-paying ones, too.

Where is Wikipedia's [citation needed] when you need it the most? Exactly zero evidence is given for the rather outrageous claims that AI will bring about a wide-scale decimation of jobs. Which is not very surprising, because there is no such evidence.

Lee then goes into the next paragraph, claiming that the companies developing AI will make enormous profits, and that this will lead to increased inequality:

This transformation will result in enormous profits for the companies that develop A.I., as well as for the companies that adopt it. Imagine how much money a company like Uber would make if it used only robot drivers. Imagine the profits if Apple could manufacture its products without human labor. Imagine the gains to a loan company that could issue 30 million loans a year with virtually no human involvement. (As it happens, my venture capital firm has invested in just such a loan company.)

We are thus facing two developments that do not sit easily together: enormous wealth concentrated in relatively few hands and enormous numbers of people out of work. What is to be done?

There are numerous problems with this argument. Technology has always helped to do something better, faster, or cheaper - any new technology that wouldn't do at least one of these things would be dead on arrival. With every new technology that comes along, you could argue that the companies that develop it will make huge profits. And sometimes they do, especially those that manage to get a reasonable chunk of the market early on. But does this always lead to an enormous wealth concentration? The two most recent transformative technologies, microprocessors and the internet, have certainly made some people very wealthy, but by and large the world has profited as a whole, and things are better than they have ever been in human history (something many people find hard to accept despite the overwhelming evidence).

What's more, technology has a funny way of spreading in ways that most people didn't intend or foresee. Certainly, a company like Uber could in principle use only robot drivers (I assume Lee refers to autonomous vehicles). But so could everybody else, as this technology will be in literally every car in the near future. Uber would probably even further lower their prices to be more competitive. Other competitors could get into this market very easily, again lowering overall prices and diminishing profits. New businesses could spin up, based on a new available cheap transportation technology. These Uber-like companies could start to differentiate themselves by adding a human touch, creating new jobs that don't yet exist. The possibilities are endless, and impossible to predict. 

Lee then makes a few sensible suggestions - which he calls "the Keynesian approach" - about increasing tax rates for the super wealthy, using the money to help those in need, and also argues for a basic universal income. These suggestions are sensible, but they are sensible already in a world without AI.

He then singles out the US and China in particular, and this is where things get particularly weird:

This leads to the final and perhaps most consequential challenge of A.I. The Keynesian approach I have sketched out may be feasible in the United States and China, which will have enough successful A.I. businesses to fund welfare initiatives via taxes. But what about other countries?

Yes, what about them? Now, I do not for a moment doubt that the US and China will have many successful AI businesses. The US in particular has almost single-handedly dominated the technology sector in the past few decades, and China has been catching up fast. But to suggest that these countries can tackle the challenge because they have AI businesses that will be able to fund "welfare initiatives via taxes" - otherwise called socialism, or a social safety net - is ignoring today's realities. The US in particular has created enormous economic wealth thanks to technology in the past few decades, but has completely failed to ensure that this wealth is distributed fairly among its citizens, and is consistently ranked as one of the most unequal countries in the world. It is clearly not the money that is lacking here.

Be that as it may, Lee believes that most other countries will not be able to benefit from the taxes that AI companies will pay:

So if most countries will not be able to tax ultra-profitable A.I. companies to subsidize their workers, what options will they have? I foresee only one: Unless they wish to plunge their people into poverty, they will be forced to negotiate with whichever country supplies most of their A.I. software — China or the United States — to essentially become that country’s economic dependent, taking in welfare subsidies in exchange for letting the “parent” nation’s A.I. companies continue to profit from the dependent country’s users. Such economic arrangements would reshape today’s geopolitical alliances.

Countries other than US and China beware! The AI train is coming and you will either be poor or become dependent slaves of the US and Chinese AI companies that will dominate the world! You could not make this up if you had to (although there are some excellent Sci-Fi novels that are not too far away from this narrative).

I am sure Kai Fu Lee is a smart person. His CV is certainly impressive. But it strikes me as odd that he wouldn't come up with better alternatives, and instead only offers a classical case of a false dichotomy. There are many possible ways to embrace the challenges, and only a few actually have to do with technology. Inequality does not seem to be a technical problem, but rather a political problem. The real problems are not AI and technology - they are schools that are financed by local property taxes, health insurance that is tied to employment, extreme tax cuts for the wealthy, education systems with exorbitant tuition fees, and so on. 

Let's not forget these problems by being paralyzed by the irrational fear caused by AI-phobia.

Lee closes by saying 

A.I. is presenting us with an opportunity to rethink economic inequality on a global scale.

It would be a shame if we would indeed require artificial intelligence to tackle economic inequality - a product of pure human stupidity.