Sunday, June 25, 2017

Artificial Intelligence: The Threat

Kai-Fu Lee, writing in the New York Times Sunday Review, writes about what he calls The Real Threat of Artificial Intelligence.

Unlike the Industrial Revolution and the computer revolution, the A.I. revolution is not taking certain jobs (artisans, personal assistants who use paper and typewriters) and replacing them with other jobs (assembly-line workers, personal assistants conversant with computers). Instead, it is poised to bring about a wide-scale decimation of jobs — mostly lower-paying jobs, but some higher-paying ones, too.

This transformation will result in enormous profits for the companies that develop A.I., as well as for the companies that adopt it. Imagine how much money a company like Uber would make if it used only robot drivers. Imagine the profits if Apple could manufacture its products without human labor. Imagine the gains to a loan company that could issue 30 million loans a year with virtually no human involvement. (As it happens, my venture capital firm has invested in just such a loan company.)

We are thus facing two developments that do not sit easily together: enormous wealth concentrated in relatively few hands and enormous numbers of people out of work. What is to be done?

The author argues that while retraining can save some jobs, others will be harder. How many cashiers or fry cooks can be retrained to be AI programmers? How many chatty bartenders does a country need?

He argues that strongly Keynesian policies plus heavy taxation of those who profit heavily is the only way to save jobs. This will involve massive transfers of wealth.

He further adds that essentially all the profits of the AI revolution will go to the US and China, as the only two countries with enough expertise to and data to succeed. This may be arguable, but certainly only a few countries are in the chase.

So if most countries will not be able to tax ultra-profitable A.I. companies to subsidize their workers, what options will they have? I foresee only one: Unless they wish to plunge their people into poverty, they will be forced to negotiate with whichever country supplies most of their A.I. software — China or the United States — to essentially become that country’s economic dependent, taking in welfare subsidies in exchange for letting the “parent” nation’s A.I. companies continue to profit from the dependent country’s users. Such economic arrangements would reshape today’s geopolitical alliances.

One way or another, we are going to have to start thinking about how to minimize the looming A.I.-fueled gap between the haves and the have-nots, both within and between nations. Or to put the matter more optimistically: A.I. is presenting us with an opportunity to rethink economic inequality on a global scale. These challenges are too far-ranging in their effects for any nation to isolate itself from the rest of the world.

I think he leaves out that a number on the have-nots list will have missiles and thermonuclear weapons, and with them the capacity to destroy the big two.