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Hello, I hope that your summer is going great. I’ll be in San Francisco for a public event ([link removed]) on July 31^st.
One of my favorite economists and thinkers is Daron Acemoglu of MIT. Daron has been researching poverty and prosperity for years and co-authored the bestseller “Why Nations Fail” a few years back. I cite Daron’s work in the War on Normal People ([link removed]) about how lifespans are getting shorter in the United States.
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Daron’s new book ([link removed]) , co-authored with fellow MIT professor Simon Johnson, is “Power and Progress: Our 1,000-year Struggle Over Technology and Prosperity.” It explores whether technological innovation naturally results in broad-based well-being. That is, when we invent things do people in general do better? Or are the benefits hoarded by a relatively low number of people who have access to the new technology?
In reviewing innovations from modern agriculture to the industrial revolution to microchips, Daron and Simon find that, generally speaking, there are a relatively small number of people who benefit while the general public is left on the outside looking in. For example, during the medieval era the development of agriculture left 90% of the population as peasants and serfs working farmland owned by a handful of landowners. In more modern times, computer and Internet-enabled productivity gains haven’t raised the real incomes of most Americans even as they have given rise to incredibly valuable firms. “This is the opposite of what a lot of the dominant public discussion would indicate,” Daron said during our interview this week. “We are conditioned to think that a rising tide lifts all boats.”
Of course, their findings are significantly more pressing in the age of AI. “What if AI fundamentally disrupts the labor market where most of us earn our livelihoods, expanding inequalities of pay and work? . . . AI appears set on a trajectory that will multiply inequalities” they write. Most Americans instinctively sense that, while AI may indeed create a lot of value and a boom for certain companies, the average worker may not be among the beneficiaries.
Of course, there have been instances when technology has given rise to a general increase in living standards, for example during the post-WWII period in the United States. Daron and Simon argue that this didn’t happen by accident, but because of popular movements that fought for better work conditions and broader distribution of the benefits of new technologies. “Electoral competition, the rise of trade unions, and legislation to protect workers’ rights changed how production was organized and wagers were set . . . they also forged a new direction of technology – focused on increasing worker productivity rather than just substituting machinery for the tasks [people] used to perform,” they observe.
They posit that a few things would need to happen for the gains of AI and new technologies to benefit most American workers: the first is changing the narrative about how the tech is and should be used. The second is to build a coalition of interest groups that can agitate for better outcomes. The third is to have policy solutions based on the new narrative. “A new, more inclusive vision of technology can emerge only if the basis of social power changes.”
How optimistic is Daron that we are up for this challenge? “It’s a tall order. The tech industry and large corporations are politically more influential today than they have been for much of the last hundred years . . . A social movement to redirect technological change away from automation and surveillance is certainly not just around the corner. All the same, we still think the path of technology remains unwritten.”
It's hard to argue with so much history: “A thousand years of history and contemporary evidence make one thing abundantly clear; there is nothing automatic about new technologies bringing widespread prosperity. Whether they do or not is an economic, social and political choice.”
For my interview with Daron Acemoglu of MIT, click here ([link removed]) . To help build a popular movement for adaptation in the face of new technologies, check out Forward ([link removed]) today. Forward has its one year anniversary event on Thursday – click here ([link removed]) to join us with special guests!
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Andrew Yang
Founder, Forward Party
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andrewyang.com ([link removed])
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