TLDL: The Economics of the AI Revolution, with David McWilliams and Eric Lonergan

TLDL, by Culture3
November 23, 2023
'Too Long Didn't Listen' is our summary series for your favourite podcasts around technology, creativity, society.

The board of ChatGPT may be firing its CEO, but that doesn't mean this revolution is slowing down. A whistle-stop tour from the dawn of time with Stanley Kubrick, to Gutenberg in 1453, and up to now, we look at the economics of innovation. Here's our bullet-point summary of the podcast between David McWilliams and Eric Lonergan.

Welcome to TLDL, our ten bullet-point summary of your favourite podcasts around technology, creativity, society — and how to direct emerging tech to unlock human flourishing. Today we tuned into the eponymous David McWilliams Podcast, where host David McWilliams, a professor at Trinity College Dublin, Ireland, speaks to fellow economist Eric Lonergan about The Economics of the AI Revolution.

The board of ChatGPT may be firing its CEO, but that doesn't mean this revolution is slowing down. A whistle-stop tour from the dawn of time with Stanley Kubrick, to Gutenberg in 1453, and up to now, we look at the economics of innovation. With AI are we now facing catastrophe or a creative surge? Here's our summary.

  • Technology and Human Evolution: The discussion begins with an analogy to Stanley Kubrick's "Space Odyssey," highlighting how technology (even by a bone used by apes as a tool) fundamentally changes the human experience. This analogy underscores the co-evolution of technology and humanity, emphasising that humans not only develop technology but also teach its usage, thereby passing knowledge across generations.
  • AI as a Problem Solver: AI is a natural progression in the human story of problem-solving. By solving problems, technology like AI makes humans more efficient and productive, freeing up mental resources for other tasks. This is an example of the broader concept of technological determinism, where technology is a primary driver of societal change. At the same time, it also raises critical questions about the future balance between human intuition and machine intelligence in driving societal progress.
  • AI's Impact on Productivity and Creativity: The discussion emphasised AI's role in enhancing productivity and creativity. This mirrors the impact of previous technologies like the printing press, which not only made book production more efficient but also democratised knowledge. AI's potential to aid in artistic endeavors suggests a future where technology is seamlessly integrated into the creative process, perhaps even sparking new art forms. Already, Adobe, Figma, and Canva have integrated AI solutions into their design products, whilst AI creative tools startup Runway has quickly reached a $1.5 billion valuation, showing how excited investors are about the sector.
  • The Threat to Middle-Class Jobs: The fear that AI might replace white-collar jobs echoes the historical anxiety seen during the Industrial Revolution when machinery began replacing manual labor. This highlights a recurring theme in technological evolution: the displacement of existing job roles, necessitating a workforce that can adapt and learn new skills. At the same time, the future is difficult to predict: half a century ago, there was widespread concern that automation of the 1960s would lead to chronically high levels of unemployment. So widespread that new US President John F. Kennedy created a National Commission to understand the effects of “automation and industrial change” on “chronic unemployment.” In retrospect, we know that fear was unfounded, and the Commission’s insight that technology automates skills, not people, is a reminder that the way to navigate new technology is to help people learn new skills to thrive in jobs that leverage that new tech.
  • Availability Bias in Assessing AI's Impact: Indeed, our psychological ‘availability bias’ underlies a common hurdle in understanding AI's impact. It’s crucial to recognise this bias to fully comprehend AI's long-term implications: history shows that initial reactions to new technologies often miss their eventual transformative effects, emphasising instead the disruption that is more immediate, obvious, and thus ‘available’, as seen with early skepticism about cars or computers.
  • AI's Role in Expanding Human Capability: The discussion also draws parallels between the societal conversation about AI creating new job opportunities to the advent of the internet, which led to entirely new career fields. This suggests a future where the definition of work may evolve, with AI handling routine tasks and humans engaging in more complex, creative endeavors.
  • AI and Financial Markets: The potential for AI to influence financial markets brings to mind the dot-com bubble, illustrating how technological enthusiasm can lead to irrational market behavior. This raises questions about the balance between technological advancement and financial stability, especially now that trading algorithms can drive significant market movements. Algorithmic trading represents up to 75% of the $40 trillion trading market by some estimates.
  • The Potential of AI in Healthcare and Legal Systems: AI's role in improving healthcare and legal systems is promising, yet it also raises ethical and practical questions. For instance, while AI can aid in diagnostics, it also brings up concerns about data privacy and the need for robust, error-free algorithms in life-critical applications. Some of AI’s most impressive advancements have come in healthcare, most notably AlphaFold, an AI system developed by Google that is able to predict protein structures, unlocking a new realm of disease treatments and biological understanding.
  • AI and Economic Growth: The discussion’s comparison of AI to the printing press in its economic impact underscores the transformative potential of technology. Just as the printing press ushered in an era of enlightenment and growth, AI could herald a new age of innovation and prosperity, provided its challenges are managed effectively.
  • Regulatory Challenges and the Future of AI: The discussion on regulatory challenges echoes the historical struggle to balance innovation with public welfare. Just as regulations were developed for automobiles and the internet, AI will require thoughtful governance to ensure its benefits are maximised while minimising potential harms. Today, regulation of AI is beginning to kick into gear, with the President Biden’s Executive Order exacting restrictions on those building at the frontier of artificial intelligence, whilst observers hope that the EU’s AI Act will pass in 2023, despite lobbying efforts by big tech companies, like OpenAI, Microsoft, and Google to shift the legislation in their favour, such as by making it harder for competitors to build similar products.

Every technological advancement brings a mix of opportunities and challenges. The key takeaway is the need for adaptability, both in individuals and societies, to harness their full potential whilst mitigating their risks. Listen to the full podcast here, and tap to subscribe on Spotify or Apple Podcasts.

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Don't have 60 minutes? Who does. TLDL is our our ten bullet point summary series of your favourite podcasts around technology, creativity, society — and how to direct progress to unlock human flourishing.