Public Policy in an AI Economy
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ARTICLE SUMMARY
Analysis of the impact of artificial intelligence (AI) technology emphasizes AI’s effect on jobs. AI systems are likely to displace workers slowly; if so, the overall effect of AI on jobs will be minimal. Some support the idea of a universal basic income to aid workers displaced from jobs by AI.
POLICY RELEVANCE
Universal basic income proposals are flawed. Those who spend their income unwisely would receive no assistance.
KEY TAKEAWAYS
- In the past, technology has displaced many workers from their jobs, but unemployment has not risen; even if AI displaces high-skill workers, history suggests that they will adapt.
- The speed of adoption of AI technology is significant; if all of the 3.5 million taxi, bus, and truck drivers lose their jobs to automated systems over a period of 15 years, the overall impact would be small, because 5 million new jobs are created every month.
- Whether AI systems performs tasks better than humans influences the speed of AI adoption, but the price of AI systems and the cost of adjusting economic processes to AI are also significant.
- The difficulty of training AI systems will slow adoption; Microsoft’s attempt to teach an AI to make Twitter responses in the United States failed, as the AI mimicked abusive Tweets.
- AI will make inequalities arising from differences in income and geography worse, as AI systems will be trained to serve the needs of early adopters, who can afford expensive technologies.
- Some support the idea that the government should guarantee everyone a universal basic income (UBI) regardless of employment status; anyone could earn more by working.
- A UBI would have some serious disadvantages.
- Many low wage earners would simply stop working.
- More people would receive money, but the very poor would get less.
- Other safety nets would be abolished; those who spend their income unwisely (gambling or investing in Ponzi schemes) would get no help even if they were penniless.
- Many low wage earners would simply stop working.
- Giving consumers strong property rights in their data or regulating price discrimination could affect the overall impact of AI on prices.
- The rise of AI means that more industries will have a "winner-take-all" market structure, increasing the importance of antitrust policy.
- AI is unlikely to play a big role in public policy; AI is not suited to determine whether the Federal Reserve should raise interest rates, or whether the taxes of high-income people should be cut.
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About Austan Goolsbee
Austan D. Goolsbee studies the Internet, the new economy, government policy, and taxes.
He recently returned from Washington where he was the Chairman of the Council of Economic Advisers and a member of the President's cabinet. Before Washington, his research earned him recognition as a Fulbright Scholar and a Sloan fellow. In previous years, he was named one of the Global Leaders for Tomorrow by the World Economic Forum, one of the six "Gurus of the Future" by the Financial Times and one of the "40 under 40" by Crain's Chicago Business.
