Under what circumstances does technology improve prosperity? Massive unemployment and deepening of inequality are not new concerns, but the rise of artificial intelligence has led to great thinkers such as Daron Acemoglu suggesting standards of involvement to optimize and equalize the benefits of technological change. On the other hand, Russ Roberts wonders whether these conditions are needed to lead innovation to prosperity, instead and emphasis on competition, strength of labor markets to protect individuals and the ability of technological progress to distribute benefits outside The direct industry.
Daron Acemoglu is a professor in the economy of the institute on MIT, the author or co-author of six books, including Why Nations fail” The narrow corridorAnd Strength and progress. Acemoglu got the Nobel Prize for Economic Sciences In 2024 in addition to Simon Johnson and James A. Robinson for their work on how institutions differ in prosperity in different countries.
This lively conversation between Acemoglu and Roberts is mainly about the more careful attitude of Acemoglu about the ability of technology to improve living standards and wages. He acknowledges that technology has made life better. Because the industrial revolution, people are healthier, are more trained and the world is much more prosperous, but there is nothing automatically about this process. Acemoglu notes that humanity only benefits from technology, given the optimum institutional structure. Roberts argues that Acemoglu’s Take is half-right. Humanity is better off because of technology, but it is not because of the circumstances of Acemoglu. Roberts believes that the power of innovation is maximized without repeating.
Acemoglu quotes three ingredients that he sees as necessary to have technology a positive effect. One is competition, with which Roberts agrees; However, they differ on the other two. He challenges Acemoglu to prove that technology is shown instead of being ahead of competition and innovation.
The second is coercion on labor markets. Acemoglu agrees that technology can increase marginal productivity of work, but if there is coercion that may not result in higher wages, because the benefits of innovation would largely be distributed over employers. He argues that the improvements in working conditions and the redistribution of benefits for employees from the industrial revolution were not automatic,; They had to be argued. He points to the proliferation of trade unions as much more in accordance with improvements in working conditions than the industrial revolution itself.
And an important factor is there, you know, the voice of employees. Trade activities were suppressed very hard in Britain. Every form of democratic movement was super powerfully discouraged … so that is what I mean there was nothing automatically about that process. And when trade unions start, you know, organizing after the master and serving actions – which employees completely disprove their bosses, and trade unions were legalized – that is when you see the conditions in factories in factories rather improved.
Roberts doubts whether the trade union contributes a lot to an increase in the standard of living. He states that trade unions increase wages by reducing employment. They do not level income; They just rearrange it. Even large companies still have to compete for labor, and they do that by increasing wages, therefore large companies, based on their size, do not necessarily have more negotiation forces.
The third condition of Acemoglu is how automation influences the income of employees. He claims that automation can increase the productivity of the capital, but not necessarily that of Labor, because it reduces the contribution of Labor to production.
And if you want to think about it that way, we will also discuss this as an illustration in the book – the factory of the future will have two employees, a man and a dog. The dog is there to ensure that the man does not touch the equipment, and the man is there to feed the dog … But the reason why this is such a good example is that it clearly emphasizes why that man – Or many people who may work in these companies – don’t really contribute to the average productivity in that enormous way. You can eliminate this person and the dog, and the factory would still work well. If that is the case, the labor market – the competitive process – should not pay this person a high wage. That is automation.
Roberts says that Acemoglu lacks how automation increases real wages by circulating benefits in the population, with a chicken farm as an example. He argues that automation lowers prices, a claim that Acemoglu agrees, and that opportunities are created for other industries by those lower prices, creating a higher standard of living.
The money mainly goes to the people who have bought the machines, they have installed, the people who have made and made the machines. However, the net result is a huge decrease in the price of eggs. And that means that the employees who work elsewhere Have a much higher standard of living, including those who work in that plant. And that happens everywhere in the economy. And so, what happens – here is the irony – because the innovation turns out the work of many different production processes that create opportunities for new Employers to find things that those low -skilled employees could do, and they have that. Historically there is no massive unemployment in the light of innovation. And the entire 20th century in the United States is that story for me.
Finally, Roberts Acemoglu asks for his solutions to minimize the destructive impact of creative destruction. He states that the balance of labor/capital tax is shifting to stimulate investments in labor instead of capital, together with optimizing the lease shift capacity of automation to ensure that employees remain necessary and are entitled to sharing quasi -Rent. The umbrella idea of Acemoglu is to encourage rapid technological progress in ways that are compatible with labor productivity and broader human well -being.
… we should have more types of government competitions and programs to encourage human-complementary use of AI and digital technology. The government, as I said, should not be in the chair, but the US government through the Ministry of Defense, nih [National Institutes of Health]NSF [National Science Foundation] In the past has played a very positive role in encouraging the exploration of new areas. And I think this is something that we have to consider. Absolutely no automation tax, certainly not delaying the automation. We don’t want to To slow down the automation. We want automation to be fast, but at the same time find other Things we can do for employees, so that the productivity of employees is also central.
Related Econtalk -Fillings:
Daron Acemoglu about shared prosperity and good jobs
Daron Acemoglu about inequality, institutions and Piketty
Elizabeth Anderson on employee rights and private government
Tyler Cowen about the risks and impact of artificial intelligence
Living with exponential change (with Azeem Azhar)
Related LF -Network content:
Innovation in a regulatory labyrinthBy Shoshana Weissmann, at Law and Liberty
Is technology bad? By David P. Goldman, at Law and Liberty
Technological unemployment and workBy Bryan Caplan, at Econlib
Adam Thierer on permissionless innovationThe Great Antidote Podcast