Podcast Summary
Industrial Revolution, AI and Technology: Historical analysis of Industrial Revolution shows that initial stages brought harsh working conditions and wage stagnation despite productivity growth, but later stages led to real wage growth and improved working conditions.
While AI and technology have the potential to bring about significant progress and improvements, they also have the capability to displace jobs and increase inequality in the short term. The historical analysis of the British Industrial Revolution, as discussed in Duran Assamo-Glu and Simon Johnson's book "Power and Progress," illustrates this point. During the first 90 years of the Industrial Revolution, workers did not experience significant wage growth despite increased productivity, and working conditions were often harsh and oppressive. However, in the later stages of the Industrial Revolution, real wages began to increase, and working conditions improved. This historical analysis suggests that while the long-term effects of AI and technology may be positive, it is essential to consider the potential negative consequences and work to mitigate them. The worry about technology changing the job market dramatically is a valid concern, and understanding the historical context can help us anticipate and prepare for the future.
Technology and Elite Control: Historically, elites have controlled new technologies and extracted wealth from the masses. Today, it's crucial to scrutinize tech companies' intentions and strive for equitable distribution of technology's benefits.
Historical progress, including technological advancements, does not guarantee equal distribution of benefits. The process of political change and the balance of power in society play crucial roles in determining who reaps the rewards. The historical examples discussed, such as the UK's transition to democracy and the introduction of windmills during the Middle Ages, illustrate how elites often controlled new technologies and extracted wealth from the masses. Today, as technology continues to evolve, it's essential to be aware of these historical patterns and strive for equitable distribution of its benefits. The self-interest of elites, justified in the name of the common good, has been a recurring theme throughout history. Therefore, it's important to scrutinize the intentions of tech companies and question their claims of acting in the best interests of society.
Middling Sort and Industrial Revolution: The Industrial Revolution in Britain was driven by the 'middling sort' of people, who used science and technology to improve things but did not prioritize worker welfare, requiring a proactive agenda to fix institutions and steer technology for broad-based prosperity
The Industrial Revolution in Britain was not solely driven by the elite or aristocrats, but rather by the "middling sort" of people, who were forward-thinking, entitled, and eager to use science and technology to improve things. However, they also looked down upon the workers and did not prioritize their welfare. Despite the potential for progress, it was not automatic or self-acting. Instead, it required a proactive agenda to fix institutions, protect the disadvantaged, and steer technology in a more beneficial direction. Technological determinism, which assumes that technology dictates its own path, should be rejected. Instead, we have the power to use technology to eliminate workers or make them more productive. The key is to focus on increasing the marginal productivity of workers, which refers to their contribution to output, rather than just increasing average productivity. This can be achieved by providing better information to decision-makers and using AI as an informational tool. Ultimately, history shows that there are many ways to harness technology for broad-based prosperity, but it requires conscious effort and a commitment to improving institutions and worker productivity.
AI and worker productivity: Collaboration between workers, businesses, and government is crucial for increasing productivity with AI while ensuring a fair distribution of power and benefits
AI has the potential to significantly increase productivity for workers, especially in complex industries, but only if there is a balance of power between workers and employers, and a shared vision for the role of technology in society. The Swedish example from the past demonstrates that when workers, businesses, and government collaborate to prioritize worker productivity and create a fair distribution of power, both workers and businesses can thrive. In contrast, an adversarial approach that prioritizes expropriating firms will not lead to sustainable progress. Ultimately, a productive and equitable future relies on a collective effort to create institutions and social norms that empower workers and enable technological advancements to benefit everyone.
Power and societal change: Power is a multifaceted concept, encompassing material, ideological, and persuasive elements. The British Industrial Revolution illustrates how ideas and material conditions intertwine to drive societal change. Today, the tech industry wields power through inspiration, persuasion, and action.
Throughout history, societal change and progress have been driven by a combination of material conditions and ideas. The British Industrial Revolution serves as an example, where democratic ideas became more acceptable and influenced the shift towards constitutional monarchy and a constrained government. However, understanding power and its sources is crucial to this discussion. Power isn't just military or physical, but also ideological and rooted in persuasion. Social psychology, social networks, and who holds the power to persuade are all essential components in understanding this concept. Today, the tech industry's power lies in its ability to inspire, persuade, and get things done, ultimately shaping society's acceptance of its actions. The intricacies of power dynamics and their impact on societal change remain complex and require further exploration.
Institutions and Technology: Institutions shape societies and technologies, determining who holds power and resources. Recognizing the alternative direction for technology is crucial to prevent negative consequences and promote inclusivity and empowerment
Institutions play a crucial role in shaping societies by determining who holds political power, economic resources, and the rules that govern their use. Extractive institutions enable a small group to extract resources from the rest of society, while inclusive institutions empower more people and create opportunities for them to pursue their skills and become part of the economy. Institutions include not only government and corporations, but also political norms, laws, and the media. To prevent the negative consequences of modern technologies, such as AI, from concentrating wealth and power, it's essential to recognize that a socially desirable and technically feasible alternative direction is possible. This opens up the discussion for policies that use technology to help workers, disadvantaged groups, and improve democracy, rather than making inequality and disempowerment worse.
Institutional role in shaping tech change: Institutions like workers' organizations, civil society, regulators, and policymakers play a crucial role in shaping technological change to benefit society as a whole by ensuring equitable distribution of gains and providing valuable insights into workers' needs and challenges. Policymakers can create a level playing field through specific policies and innovation subsidies.
Institutions play a crucial role in shaping technological change to benefit society as a whole. This can be achieved through countervailing powers such as workers' organizations, civil society, and regulators. These forces help ensure a more equitable distribution of gains and provide valuable insights into workers' needs and challenges. Policymakers can also create a level playing field by implementing specific policies like digital ad taxes and antitrust measures. While science and technology are evolutionary processes, it's essential to steer them in socially beneficial directions through careful policy choices and innovation subsidies. The relationship between the ideas presented in "Why Nations Fail" and "Progress" lies in the importance of institutions, as they determine whether a society is extractive or inclusive, and thus, the potential for technological advancement and social progress.
Power and institutions: The success or failure of nations depends on their institutions, which can either be extractive or inclusive. Power distribution, resources, and agenda-setting play crucial roles.
Key takeaway from this discussion with Daron Acemoglu is that the world's inequality and instability are interconnected with politics, economics, and power. The success or failure of nations depends on their institutions, which can either be extractive or inclusive. The distribution of power, resources, and agenda-setting plays a crucial role. While the world has changed since their book "Why Nations Fail" was published in 2012, the issues of power and institutions remain relevant. Today, Daron expresses less optimism about the US and its institutions, and he didn't address tech dominance in the book. However, he emphasizes that individuals have the power to persuade and construct better institutions. Daron appreciates the opportunity to discuss these important issues on the Mindscape podcast.
