The Case For Optimism As AI Transforms Our Economy

AI will displace jobs. AI will create new jobs. It’s kind of a quantum mechanics statement, because both are true at once. But let’s get past the gloomy headlines and never-ending dour industry forecasts and look at the bigger picture. That is, every technology wave has produced employment waves that we have rarely ever wanted to reverse. The same holds true for artificial intelligence.

The current AI panic “weirdly resembles the anxiety that accompanied early capitalism,” wrote Venkatesh Rao, a highly regarded writer and consultant, in a compelling essay that drew parallels between the AI transformation and previous upheavals. That is, every major transformation through history – from agriculture to factories, for instance – resulted in exponential advancements in the human condition, and career opportunities.

“Capitalism emerged when people began discovering that wealth could be created rather than merely captured, and that ordinary people could be sources of demand and initiative rather than merely labor to be commanded as a factor of production,” Rao wrote.

Of course, it’s hard to ignore the loud alarm bells ringing all over the place about the dangers of encroaching AI. Witness the recent proclamation by Nobel laureates and economists and AI experts who warned that AI could transform the global economy more profoundly and rapidly than the Industrial Revolution within a decade, leaving many people behind.

What are we losing, and what is being gained? One of my favorite classic movies, The Apartment, released in 1960, starts off with a scene from a large, cavernous room in an insurance company. You see row upon row of desks, with hundreds of employees hunkered down at adding machines, grinding out daily reports. Or consider Office Space from 1999, in which employees had to grind out TPS reports. Who wants to return to that kind of work?

AI will potentially open up new vistas, and business ideas, that we are just starting to discover.