AIForEverybody

I had lunch with some friends yesterday, and one of these friends (who also happens to be a regular reader of this blog) asked me why I write mostly about AI these days.

Fair question! Here are my reasons:

The Basic Argument

1. All of the things that we humans produce are a function of ideas, labor and capital being combined in a variety of different ways. AI reduces the need for labor in this setup, and does this better than anything else that has come before it.

2. This will have consequences for how much income labor will earn, and how this income will be distributed.

3. This will also have consequences for how much income capital will earn, and how this income will be distributed.

4. The rate at which AI reduces the need for labor, and the extent to which it is replacing labor in almost all human endeavors is frightening to behold. This is true in terms of both what I read, and what I experience in my professional life.

5. We have barely gotten started on AI+robotics.

The Impact on Institutions

1. Anybody who has worked in academia, especially in higher ed in India, will tell you that most of what we make students do in college has very little to do with what students will do in their professions.

   • We have outdated syllabi

   • Practitioners rarely, if ever, teach courses in colleges

   • Students still write most examinations by hand

   • Not only is AI not integrated into most learning or doing workflows in college, its use is frowned upon, if not banned.

   • Students have not been up to speed while joining the workforce for years now. I was one of them in 2006. But the extent to which they are unprepared today is unprecedented.

2. The delta between what can happen with AI augmented workflows, and what does happen with government services, especially at the local governance layer, will very rapidly become both untenable and intolerable.

3. Government and education aren't just sectors in our economy, they are institutional pillars with immense sociological consequences. When these two pillars start to crumble, there will be tremendous social upheaval.

4. All this will happen at the same time as great geopolitical and military uncertainty, and AI deployment will be both cause and effect over here, with knock-on effects on all of the points listed above.

Not To Mention...

1. All of this will happen while science proceeds at a pace never before seen in history, with major impacts upon military equipment, energy, healthcare, transportation and computer hardware.

2. Finance will change in unimaginable ways. How will AI agents with the ability to trade their own money think about optionality, time horizons, discount rates and therefore trading strategies, and what will this do to human traders in the same markets?

3. All this while political systems are at their lowest in terms of trust, and per pt. 4 in the second section, this will only get worse.

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I find it difficult to stop thinking about these things, especially (but not only) as an economist.

And so apologies in advance, but it is unlikely that I will stop writing about AI anytime soon!