Few can deny that there will be huge social, political, and economic transformation as a result of AI, robotics, and digital technologies. But there are many uncertainties about how those changes will play out, especially in the critical area of economics. Does it mean the end of work? Massive job loss? Lower wages? Slower growth? And what about productivity?
From a historical perspective, we have been at similar crossroads before said MIT Economics Professor, Daron Acemoglu, at the MIT IDE Annual Conference on May 24. Speaking about Automation and the Future of Work, Acemoglu said that many 20th-Century economists — including John Maynard Keynes and Wassily Leontief — also worried about technological unemployment in the 1930s and 1950s.
While there are a few similarities in the automation of work then and now, the current digital industrial revolution is very different, he said. Besides the automation of all types of administrative work — not only factory automation this time around — U.S. corporate income is being re-invested into capital (machines), not labor (people). Furthermore, on a macroeconomic level, both productivity and wages are lackluster, at best. This is true despite the productivity gains and complementary effects that usually result from “enabling technologies,” that allow humans to work more efficiently, Acemoglu said.
Most troubling are “displacement technologies,” such as robots, that are dislodging, not supplementing human workers. This type of automation is squeezing labor into narrow sets of activity without yielding higher productivity, he said.
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