Nobel-winning economist says AI will be useful — but not before workers pay the price
It is no secret that artificial intelligence is reshaping the U.S. job market and fueling wave after wave of layoffs. Still, there can be a scenario in which things get better, and humans are able to coexist with the technology. However, to get to that point, a lot more people will have to be displaced from their jobs, and that’s something America simply does not have the capacity to deal with, as per Nobel laureate Joseph Stiglitz.
The rise of AI is not dissimilar to the industrial revolution, which saw machines taking over and displacing thousands of people from their jobs. Stiglitz believes that the world is headed for something similar, as the growing AI bubble will burst and workers will have to bear the brunt of it. However, in the long run, the same technology will prove to be a vital tool for humanity in various aspects of life. “Our economy is right now being supported by AI investment—the AI bubble,” Stiglitz said as per a report in Fortune. He then went on to add, “Like a third of the growth, or the non-growth, that we had last year was based on AI. So this AI bubble is having positive macroeconomic effects in the short run. I believe that it is a bubble in two ways. There’s both a short run and a long run.”
Stiglitz believes that if the AI bubble bursts, it will affect the economy in a couple of ways. The first will be the mass displacement of workers who would be left to fend for themselves without employment. The second is related to the market. At the moment, there is a lot of confidence in AI investments, but if the technology is highly successful, there will be a lot of competition, which will lead to much lower returns than expected.
“The market believes that there are going to be high returns to these investments, which is predicated on two assumptions: that AI will be technologically successful and that there will be limited competition,” he explained, before adding, “Because if it’s technologically successful, but there’s a lot of competition, profits will be driven down to zero, and they will not get the returns that they expect.”
Hence, in the short term, the AI bubble bursting would be detrimental. However, if that hardship can be overcome, things will turn out to be better. In time, the technology will not be viewed as a replacement for humans, but rather, an essential tool. Fields like healthcare and education would massively benefit from the technology. Moreover, AI will also not be able to replace human jobs in these fields. “It’s not going to replace teachers. It may help them do better lesson plans. It may help them tailor education better, but it’s not going to replace the teachers. We know enough about how students learn that the human interaction still seems to be very important,” Stiglitz explained.
More on Market Realist
Trump believes AI can recreate the 1990s economic boom — but experts aren’t fully convinced
Expert warns AI’s biggest issue isn’t the mass layoffs — but something way more dangerous
Turns out, an AI-generated fake news has the power to trigger a stock market crash
