Why extreme inequality will magnify the social, political and economic downside of technology
Today’s post is another installment in a series of posts about AI. AI is clearly a major technological shock, and it may take years before we fully understand its economic and social impacts. What we do know, however, is that this technological shock is occurring in the context of a pre-existing environment of extreme wealth and political inequality. And this pre-existing condition will magnify the downsides of the AI shock.
Imagine for a moment what might have happened if AI had arrived in the America of the 1950s or 1960s, when income and wealth inequality were very low by historical standards. In those days, the tax code was strongly progressive and industry regulation, including antitrust policy, was robust. Under those conditions it’s very likely that the destructive effects of AI would have been limited and contained.
Instead, however, AI is emerging in an American economy and society that are already strongly oligarchic, with enormous wealth and political influence in the hands of a handful of billionaires. The current concentration of wealth at the top is not only immensely greater than in the 50s or 60s, but is in fact far greater than during the Gilded Age. This state of affairs is both a cause and an effect of policies that benefit a tiny elite, such as low effective taxes on capital and high incomes, weak or nonexistent enforcement of worker protections and anti-trust, drastic reductions in programs that benefit ordinary Americans, and so on.
And in the context of a political and economic environment that is heavily tilted towards the hyper-wealthy, the negative impacts of AI will probably be larger than if they had appeared in a country with a more level playing field. That is,unless the very impact of AI leads to a much-needed pushback against American oligarchy.
So although AI is addressed in today’s primer, the content will mostly be about oligarchy rather than AI: documenting how America has changed since our politics turned right in the 1980s, and why wealth and power have become so concentrated. At the end of the post, however, I’ll speculate about how pre-exiting oligarchy will channel the potential of AI in destructive directions — and what we could do to change that.
Beyond the paywall I will address the following:
1. Economic oligarchy: The rise of the .0002%
2. The economics of oligarchy
3. The politics of extreme wealth
4. How oligarchy will shape AI’s impact
5. Paths for policy