Followup To Why AI Won't Cause Unemployment
“Some people worry that AI will make us feel inferior, but then, anybody in his right mind should have an inferiority complex every time he looks at a flower.” —Alan Kay
[Followup to my recent post “Why AI Won’t Cause Unemployment”.]
“Wait, why are the red price lines going up and the blue price lines going down?”
The blue price lines are for sectors like consumer electronics, media, and toys, which are mostly neither subsidized nor regulated by the government, which means that technological innovation can be more or less freely applied by anyone in those markets to reduce prices and improve quality. This is why the TV you buy today is so dramatically better and cheaper than the one you bought ten years ago. Nobody gets mad at Samsung when they make a better and cheaper TV except their competitors, who either get to work on the same thing themselves or go out of business.
The red price lines are for sectors like health care, education, and housing, which are extensively subsidized and regulated by the government, and also tend to have monopolistic/oligopolistic/cartel-like industry structures which are enabled and supported by the government. What happens if you subsidize a product whose supply is restricted? Its price rises. What’s restricting the supply? Regulation. This is the effect of most “consumer protection” regulations which may start with good intent, but are quickly hijacked by incumbent suppliers as protect themselves from new competition. This is why new bank creation virtually ended after the Dodd Frank law was passed. Many such cases.
Put yourself into the shoes of a monopolistic/oligopolistic/cartel-like incumbent in one of the red line industries. What do you care about? As long as nothing changes, your life is wonderful. You get paid a fortune, and don’t have to do anything new. So you perpetually lobby the government and conspire with other incumbents to prevent change. What’s the scariest form of change? Technology change. What’s the main thing you try to prevent? Technology change. How good are you at preventing it? Really good, just look at the red price lines. Who prevents it for you? Your captured agents in the government, to whom you provide lavish campaign contributions and revolving-door salaries while they loudly claim to be protecting consumers from you. Repeat as necessary until you have a total monopoly with infinite prices and infinite profits.“Does this mean AI isn’t going to have a profound effect on our society?”
No, AI is going to have a profound (and almost entirely positive) effect on our society. It just won’t show up in the economy the way many people expect.
And specifically, because most jobs in the future are going to be in the red, regulated sectors, most jobs are totally safe from AI, regardless of how good AI gets.“So we don’t need Universal Basic Income?”
No, we already have Universal Basic Income, it’s for all the people working in the red line sectors (not their fault, but it’s true). Every time you buy any of the red line items, you’re paying for it. In the future, that will be virtually everyone.“OK, so, wait. You’re saying that all this is really bad for me as a consumer, as someone just trying to live my life and provide for my family?”
Yes, it’s terrible for you. It’s why it feels like everything that matters in your life is getting more expensive. Because it is.“But… why do we put up with this?”
I don’t know, why do you?
