What to do about AI & jobs.
We do not pretend to know the definitive answers. What we do know is that much of this future remains to be written, in no small part by the policy choices we make today. And what we hope to offer is a roadmap for how politicians and policymakers might bet on human agency under stark uncertainty.
Futures Not Yet Written
There are two fundamental stories one can tell about the impact of artificial intelligence on human labor. One is the pessimistic version: most of us are like the people in the early Industrial Revolution who could not learn to adapt or were stuck as mere cogs in factories. Very few of us, if any, will learn to orchestrate machines at a higher level of abstraction, and neither will we learn to invent new machines, since the artificial intelligence systems will soon exceed humans in their capacity for invention and discovery. That view is one of historical discontinuity: replacing knowledge work strikes deeper at the human uniqueness that has kept us employed than replacing various kinds of cognitive and manual labor has in the past.
The other story is optimistic: just like those early conductors and inventors of machines, we will continue our long human legacy of finding yet more to occupy our time, yet more activity that other humans find valuable. There is much more of this than we can possibly realize, because our collective imagination is bounded, yet our collective wants are limitless. How barren, in retrospect, do we find the mind of the man who thought the human touch was gone simply because we had invented machines stronger, more durable, and more reliable than us at physical labor?
Both stories will probably be true at the same time, but the unfortunate reality is that nobody knows in what proportion. More unfortunately still, it will be some time until we know: the temporary disruption that would portend broad displacement would look quite similar to the creative destruction that would come with just another industrial revolution. It’s easy for policymakers who first start to grapple with the notion of advanced artificial intelligence to reflexively adopt the pessimistic view: for so long, they’ve heard the idea that AI will be important and the idea that many jobs will be lost in the same breath that coming around on the scope of AI seems to imply believing that human labor is doomed. But that would be premature, and converts must resist becoming zealots.
Here, then, is the first—and in some sense the most troubling—message for policymakers: nobody can know what is going to happen. Anyone speaking with confidence about predictions of this kind is either misunderstanding or misleading. It is not just that we do not know “the future,” in some broad sense. We also do not know the specific nature of any problems posed by AI to the labor market: we do not know what industries, age groups, levels of seniority, job types, and so on will be affected by AI automation in practice rather than in theory or in speculation. We do not know over what timeframe these still-hypothetical changes will occur.
And if AI really does profoundly upend the labor market, we still do not know what the resulting distribution of economic resources will look like. Will the AI labs profit immensely, absorbing huge swathes of economic value as many other institutions struggle to survive? Or will AI models and systems become commodified, with value accruing to the compute designers and manufacturers? Or is it some hybrid, with most firms in the economy seeing higher profits with fewer employees and, for whatever reason, not seeing a need to hire additional people to do anything? Will there be new, high-skilled jobs created that we need to retrain millions of people for? Or will there be no new jobs at all? We do not know, and we cannot know.
That is because we are still in the process of writing this future. The role of humans in future economies is not something we simply discover as it occurs. How we distribute tasks between humans and machines is largely downstream of a web of complicated economic incentives and technical features. Is the marginal unit of computing power better spent on smoothing over the jagged frontier so no role remains for humans, or for even further improving the spikes of AI capability? Does the tax system favor firms who spend the marginal payroll dollar on hiring a worker to oversee the machines or an agent to do the same? Is there a safety net to catch those hit by local disruptions to give them the room to reorient themselves, come back five years later, and fight for their place in a new economy—or do we mollify their drive with ill-placed subsidies long enough for them to grow docile and for the structures around them to calcify? All this is contingent, and when policymakers ask ‘what will happen’, they fail to see that they’re among the central live players in this question.
How should our leaders grapple with this double uncertainty of what they should want and what will happen?
by Anton Leicht and Dean W. Ball, Threading the Needle | Read more:
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"Anton Leicht and Dean Ball team up to write about what we should do about potential job loss due to AI, from the perspective of prospective ‘de facto normal technology’ AI worlds even if they don’t call it that. They wisely say we don’t know what will happen, and that the ‘no regrets’ actions will be insufficient so solve the problem, but expect the world to stay normal enough, and humans competitive and useful enough, that we can use traditional solutions to such problems.They start with easy wins.
1. Even footing: Equalize tax treatment of AI versus labor. Yes, please.Then they recommend what they call difficult bets.
2. Retraining: Bolster workforce training and development. They notice they are skeptical in practice, and I am even more skeptical, but sure, we can try it.
3. Measurement: Know what is happening. Yes, of course.
4. Junior Job Subsidy.
Given who is saying to keep jobs around by brute force, by which they mean tax incentives, we should listen. This seems like a good use of progressive taxation, which we want to do anyway, to stack the deck in favor of hiring more young workers and those switching industries, presumably with phase outs for high earners.Anton Leicht and Dean Ball: We put to you that the solution to deal with junior job losses might be to keep these jobs around by brute force for a while, so that the critically important economic incentive to explore how to use junior workers does not cease.
More specifically, we might do so by restructuring the tax code to subsidize junior employment.
This risks distortions if taken too far (e.g. dumping senior workers for subsidized junior workers, or gaming designations), the marginal value of young workers could easily fall below zero marginal product if there is no future for them, and gating to particular industries or occupations risks going into ‘picking winners and losers’ and other similar dangerous territories and opportunities for corruption and pork. The authors are well aware, and are pushing anyway.
The main solution they offer is, again, taxes. They suggest doing so via raising corporate taxes, despite this having a long track record of being highly economically damaging. You definitely need to avoid worse distortions, and you definitely do not want a ‘token tax’ as such for this reason, although a tax on compute is non-crazy. Taking a stake in frontier developers is definitely an error.
They quickly dismiss consumption taxes as having a fatal perception problem, despite them being objectively the efficient answer, because they raise prices and signaling is too important here. I found this disappointing, and there are ways to fix this and also make the tax progressive.
It would be great if humans remained fundamentally highly productive while we collectively got far wealthier due to AI, so all we needed to do was redistribution and moving the tax code around.
Alas, no, I do not expect we live in such a convenient world. At which point, we likely have bigger problems, but also employment does not get solved with basic tax code shifts. If we stay in control somehow then we could do progressive redistribution to keep food on the table and a roof over people’s heads, but the jobs will vanish, or they will be rather fully fake."
