The AI Dilemma: Unveiling its Economic Impact – Blessing or Curse? Drawing Insights from History

**Title: The Impact of AI on the Economy: Blessing or Curse?**
 
 
**Will AI Bring Economic Benefits or Dangers? History Provides Clues**
 
AI (Artificial Intelligence) concept. (PHOTO | SHUTTERSTOCK)
 
Aug 7 (Reuters)- Amidst concerns that artificial intelligence (AI) could concentrate wealth in the hands of a few, experts are debating whether it will be an economic blessing or curse, drawing parallels with historical technological advancements. Simon Johnson, a professor of global economics and management at MIT Sloan School of Management, argues that AI has the potential to go either way, and that society stands at a fork in the road.
 
**The Promised Benefits of AI**
 
Backers of AI claim that it will generate wealth, boost productivity, and improve living standards. In fact, consultancy McKinsey estimates that AI could annually add between $14 trillion and $22 trillion of value, a figure that rivals the current size of the US economy. Some techno-optimists go further, suggesting that AI, along with robotics, will liberate humanity from mundane tasks, leading to lives filled with creativity and leisure.
 
**The Uncertainty of Technological Advances**
 
The economic impact of technological breakthroughs throughout history has often been uncertain, unequal, and at times, negative. MIT economists Simon Johnson and Daron Acemoglu, in their book published this year, examined technological advancements over a thousand years and found that they have created jobs and spread wealth to varying degrees. However, they also discovered negative consequences. For example, the spinning jenny, which automated the textiles industry in the 18th century, led to longer working hours in harsh conditions. The mechanical cotton gin facilitated the expansion of slavery in the American South during the 19th century. Similarly, the internet has created new job roles but concentrated wealth in the hands of a few billionaires. The expected productivity gains from the internet have also slowed in many economies.
 
**Job Displacement and Unequal Distribution of AI’s Benefits**
 
Just as with past breakthroughs, concerns have arisen about the potential impact of AI on jobs and livelihoods. The entertainment industry witnessed a strike by actors fearing replacement by AI-generated doubles. French bank Natixis cautioned against overestimating the effects of AI on labor productivity and highlighted the unequal distribution of its benefits. The internet’s impact on job creation has been limited to low-skilled roles, leaving many sectors and workers unaffected. These concerns raise doubts about the potential gains of AI for the global economy.
 
**Global Economic Disparities and the Implications for AI**
 
In a globalized economy, it remains uncertain whether the potential gains of AI will be experienced equally across different countries. A “race to the bottom” could occur as countries compete for AI investment by adopting lenient regulations. On the other hand, the barriers to attracting AI investment may be too high for many poorer countries, leaving them behind. Stefano Scarpetta from the Organization for Economic Cooperation and Development (OECD) emphasizes the need for cooperation on AI at a global level, expanding initiatives beyond the G7 to the G20 and United Nations.
 
**Ensuring Equitable Gains: The Role of Politics**
 
While innovation is relatively easy to achieve, ensuring that the benefits of AI reach everyone is far more difficult. Politics plays a crucial role in determining whether advancements like railways in 19th century England will positively impact society at large. Historically, democratic reforms have allowed technological advances to benefit a wider population. However, recent shareholder capitalism has concentrated the advantages of automation and reduced labor costs in the hands of a few. For instance, automated self-checkouts have not made groceries cheaper or transformed shoppers’ lives; they have simply increased profits for businesses. Worker groups, with diminished power since the 1980s, view AI as a threat to workers’ rights and employment, particularly if AI algorithms are used for hiring and firing decisions without human control. To shape the economic impact of AI in a fair manner, factors such as antitrust policies ensuring healthy competition among AI suppliers and workforce retraining are important considerations.
 
**Conclusion: Striving for Equality in AI’s Economic Impact**
 
As AI becomes increasingly integrated into our lives, it is crucial to address concerns regarding job displacement, unequal distribution of benefits, and global economic disparities. Examining historical parallels can provide insights into potential pitfalls and solutions. By considering the implications of AI on labor productivity, worker rights, and income inequality, society can work towards an economic landscape where AI is a blessing rather than a curse.