In the AI Economy, There Will Be Zero Percent Unemployment
I’m an AI developer and consultant, and when OpenAI released a preview in February of its text-to-video model Sora—an AI capable of generating cinema-quality videos—I started getting urgent requests from the entertainment industry and from investment firms. You could divide the calls into two groups. Group A was concerned about how quickly AI was going to disrupt a current business model. Group B wanted to know if there was an opportunity to get a piece of the disruptive action.
Counterintuitively, the venture capitalists and showbiz people were equally split across the groups. Hollywood producers who were publicly decrying the threat of AI were quietly looking for ways to capitalize on it. Tech startups that thought they had an inside track to disrupting Hollywood were suddenly concerned that they were about to be disrupted by a technical advance they didn’t see coming.
This is the new normal: Even the disruptors are afraid they’re about to be disrupted. We’re headed for continuous disruption, both for old industries and new ones. But we’re also headed for the longest period of economic growth and lowest unemployment in history—provided we don’t screw it up.
As AI and robotics accelerate in capabilities and find their way into virtually every corner of our economy, the prospects for human labor have never been better. Because of AI-driven economic growth, demand for human workers will increase; virtually anyone wanting to enter the work force will have opportunities to find meaningful, well-compensated careers. How we look at work will change, and the continuous disruption will cause a lot of anxiety. But the upside will be social improvements to levels we cannot currently comprehend. Roles and jobs may shift more frequently, but it will be easier to switch and more lucrative to do so.
While some of my peers in artificial intelligence have suggested AI could eliminate the need for work altogether and that we should explore alternative economic models like a universal basic income, I think proposals like that don’t take into account the historic effect of automation on the economy and how economic growth increases the demand for labor.
History and basic economics both suggest that AI will not make human beings economically irrelevant. AI and robotics will keep growing the economy, because they continuously increase productivity and efficiency. As the economy grows, there’s always going to be a widening gap between demand and capacity. Demand for human labor will increase even when AI and robotics are superior and more efficient, precisely because there won’t be enough AI and robots to meet the growing needs.
Economic Growth Is Accelerated by Technology
The goal of commercial AI and robotics is to create efficiencies—that is, to do something more inexpensively than prior methods, whether by people or machines. You use an industrial robot to weld a car because a human welder would take too long and wouldn’t have near the precision. You use ChatGPT to help write a grant proposal because it saves you time and means you don’t have to pay someone else to help write it.
With an increase in efficiency, you can either lower prices or not lower prices and buy a private island. If you don’t lower prices, you run the risk of competition from someone who sees their own path to a private island through your profits. As Amazon’s Jeff Bezos once said, “Your margin is my opportunity.” In a free market, you usually don’t get to reap high margins forever. Eventually, someone else uses price to compete.
Along with this competition comes growth, which also drives innovation. The computer add-on boards used for the Halo and Call of Duty games turned out to be really useful for the kind of computations it takes to produce an AI like ChatGPT. Thanks to that quirk of mathematics, Nvidia was able to add $2 trillion to its market cap over the last five years, and we were saved from the drudgery of writing lengthy emails and other repetitive text tasks. Along with that market cap came huge profits. Nvidia is now using those profits to fund research into everything from faster microchips to robotics. Other large companies, such as Microsoft and Google, are also pouring profits into new startups focusing on AI, health, and robotics. All of this causes economic growth and cheaper and/or better goods.
Even with continuous technological disruption displacing and destroying other industries, the United States gross domestic product has more than doubled over the last 20 years, from $11 trillion to $27 trillion. If you compare the U.S. to the slightly more technophobic European Union, you can make the case that Europe’s limits to technologic growth—through legislation and through risk-averse investment strategies—is one of the factors causing slower economic growth (Europe’s growth rate was 45.61 percent compared with 108.2 percent in the U.S.).
This was the problem India created for itself after achieving independence in 1948. The government enacted so many laws to protect jobs (the “License Raj”) that it stalled the country’s economic development for decades, nearly lost millions to famine, and got eclipsed by the Chinese.
If technology is a driving force for economic growth, mixing in superintelligent AI means accelerated growth. Even if there are periods of technological stagnation—which is doubtful—applying current AI automation methods will improve efficiencies across industries. If H&R Block could replace 90 percent of its seasonal employees with AI, it would see its profits skyrocket, given that labor is its biggest expense. Those profits would be reallocated elsewhere, that would increase the potential for even more economic growth, and that would in turn create better opportunities for the accountants.
What about physical labor? Outsourcing jobs overseas is just the final step before they’re outsourced out of existence by robotics. If you don’t have to build your product on the other side of the planet, you have efficiency in both cost and time to market. The less time goods spend in shipping containers crossing the Pacific, the more available capital you have. More capital means more growth.
If the last several hundred years of economic history are any indication, AI and robotics are goin
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