Technology × Freedom

A Word on the AI Technopanic

August 9, 2017 invisiblehand

There are many out there raising the alarms about artificial intelligence, claiming that the advent of AI will cause widespread harm in the form of job loss and unfair concentration of wealth. Some are even calling on a universal basic income to offset the AI job loss pandemic.

As usual, it requires only a basic understanding of economics to refute these claims. Jonathan Newman explains better than I could:

The robophobic are also worried about income inequality — all the greedy capitalists will take advantage of the increased productivity of the automated techniques and fire all of their employees. Unemployment will rise as we run out of jobs for humans to do, they say.

This fear is unreasonable for three reasons. First of all, how could these greedy capitalists make all their money without a large mass of consumers to purchase their products? If the majority of people are without incomes because of automation, then the majority of people won’t be able to help line the pockets of the greedy capitalists.

Second, there will always be jobs because there will always be scarcity. Human wants are unlimited, diverse, and ever-changing, yet the resources we need to satisfy our desires are limited. The production of any good requires labor and entrepreneurship, so humans will never become unnecessary.

Finally, Say’s Law implies that the profitability of producing all other goods will increase after a technological advancement in the production of one good. Real wages can increase because the greedy robot-using capitalists now have increased demands for all other goods.

For a real-life example, consider Amazon. Adam Thierier writes:

If the techno-pessimists are right and robots are set to take all the jobs, shouldn’t employment in Amazon warehouses be plummeting right now? After all, Amazon’s sorting and fulfillment centers have been automated at a rapid pace, with robotic technologies now being integrated into almost every facet of the process.

And yet…Amazon is looking to immediately fill 50,000 new jobs, which would mean that its U.S. workforce “would swell to around 300,000, compared with 30,000 in 2011.”

How can this be? Shouldn’t the robots have eaten all those jobs by now?

History has an abundance of empirical evidence to support the claim that "job-stealing" technologies actually produce widespread benefits. An MIT study shows that in the 1880s, the typical American worked 10 hours a day, 6 days a week. That dropped to 8 hours, 5 days a week by 1940. And the American in 1880 was working to provide basic necessities. Today's worker can work half the time of his 1880s counterpart and, even in poverty, enjoy far more luxuries than his ancestor could have imagined. Why the improvement? Industrial technologies.

One of my favorite anecdotes comes from Hans Rosling's TED talk, "The magic washing machine":

My mother explained the magic with this machine the very, very first day. She said, “Now Hans, we have loaded the laundry. The machine will make the work. And now we can go to the library.” Because this is the magic: you load the laundry, and what do you get out of the machine? You get books out of the machines, children's books. And mother got time to read for me. She loved this. I got the “ABC’s” — this is where I started my career as a professor, when my mother had time to read for me. And she also got books for herself. She managed to study English and learn that as a foreign language. And she read so many novels, so many different novels here. And we really, we really loved this machine.

And what we said, my mother and me, “Thank you industrialization. Thank you steel mill. Thank you power station. And thank you chemical processing industry that gave us time to read books.”

Or take the words of author Kevin Kelly:

Industrialization did more than just extend the average human lifespan. It led a greater percentage of the population to decide that humans were meant to be ballerinas, full-time musicians, mathematicians, athletes, fashion designers, yoga masters, fan-fiction authors, and folks with one-of-a kind titles on their business cards.

Of course, technopanics are nothing new. Mechanical looms, trains, electricity, and the telephone were all met with the same doom and gloom. Where do these techno-pessimists get it wrong? They believe that an innovation is simply a new-fangled toy, divorced from any economic considerations. But market forces are what drive technological innovation, and market forces are what bind individual human action to the prosperity of the whole group.

And here you were thinking capitalism was heartless.