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UPDATE: Daron Acemoglu, along James A. Robinson and Simon Johnson, shared the 2024 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, for “studies of how institutions are formed and affect prosperity.” Robinson is also a past guest on Social Science Bites.

Listening to the ongoing debate about artificial intelligence, one could be forgiven for assuming that the technology is either a bogeyman or a savior, with little ground in between. But that’s not the stance of economist Daron Acemoglu, professor at the Massachusetts Institute of Technology and the author, with Simon Johnson, of the new book Power and Progress: Our Thousand-Year Struggle Over Technology and Prosperity. Combining a cogent historical analysis of past technological revolutions, he examines whether a groundbreaking new technology “augments” the status quo, as opposed to merely squeezing out human labor.

“[M]y favorite term is ‘creating new tasks’ because I think it really clarifies what the quote unquote augmenting needs to take the form of,” he tells interviewer David Edmonds in this Social Science Bites podcast. “It’s not just making a worker more productive in tightening the screws, but it’s really creating new jobs that didn’t exist.” And so, he explains to those perhaps afraid that a bot is gunning for their livelihood, “Automation is not our enemy. Excessive automation is our enemy.”

This is not to depict Acemoglu as an apologist for our new silicon taskmasters. Current trends such as the consolidation of power among technology companies, a focus on shareholder returns at the expense of all else, a blind trust in companies to somehow muddle through to societal equilibrium, and a slavish drive to automate everything immediately all leave him cold: “I feel AI is going in the wrong direction and taking us down with it.”

His conversation doesn’t end there, thankfully, and he offers some hopeful words on how we might find that modus vivendi with AI, including (but by no means only relying on) “the soft hand of the state in tipping the scales one way or another.”

Acemoglu is an elected fellow of the National Academy of Sciences, the American Philosophical Society, the British Academy of Sciences, the Turkish Academy of Sciences, the American Academy of Arts and Sciences, the Econometric Society, the European Economic Association, and the Society of Labor Economists. He is also a member of the academic-cum-policymaker group of economic movers and shakers known as the Group of 30.

Besides Power and Progress, his books include the popular bestseller Why Nations Fail: Power, Prosperity, and Poverty written with James Robinson. Acemoglu has received a number of prizes, including two inaugural awards in 2004, the T. W. Shultz Prize from the University of Chicago and the Sherwin Rosen Award for outstanding contribution to labor economics. He received the John Bates Clark Medal in 2005, the Erwin Plein Nemmers Prize in 2012, and the 2016 BBVA Frontiers of Knowledge Award, as well as the Distinguished Science Award from the Turkish Sciences Association in 2006 and a Carnegie Fellowship in 2017.

To download an MP3 of this podcast, right-click this link and save. The transcript of the conversation appears below.

David Edmonds: According to the doomsters, artificial intelligence is going to wipe out most of our jobs: Social Science Bites will be brought to you by an advanced chat bot. But Daron Acemoglu, co-author of Power and Progress, and a professor of economics at MIT, says such an AI dystopia is not inevitable. Daron Acemoglu, welcome to Social Science Bites.

Daron Acemoglu: Thank you. It’s my great pleasure to be here. Thanks for inviting me.

Edmonds: We’re talking today about the economic impact of artificial intelligence. But before we get there, let’s take a step back and talk about technology more generally. There’s a common view that, despite worker resistance to technologies throughout history – most famously, one thinks of the Luddites – that in the end, technology benefits almost everyone. Is that how technology works? Is it true that it’s almost always advantageous to all of us?

Acemoglu: Yeah, I think you’re right about the common belief, and probably journalists, economists and technologists are equally to blame for this view. I think the world we live in is, comparatively speaking, a fortunate one. We are much more prosperous, healthier, comfortable than those who lived 300 years ago, and we are surrounded by technology, and there is a general techno optimism around us. And all of that implies a particularly strong default position for most people, that technology is an amazingly useful tool, and just let it rip, and everybody will ultimately benefit, and that ultimately means something different to different people. And yes, indeed, that’s why ‘Luddite,’ for a while, and even today, has been used as a term of abuse. So, if you are questioning technology, you’re a Luddite, and it’s not a good thing to be.

So, at the risk of sounding like a neo-Luddite, which I’m not, I do see the benefits of technology. But I would also say that who benefits from technology is always up for grabs, and there is no guarantee that technologies in general will benefit humanity. I mean, think of the knowledge to make much, much more powerful bombs or much, much more deadly biological weapons. That’s knowledge; it expands what we can do. But on the whole, it wouldn’t help humanity greatly. And there are many technologies in the age of Luddites, like exactly the weaving machines that the Luddites were exercised about, which tend to be good for business owners, factory owners, but not so good for workers whose wages are cut. So, it’s all up for grabs.

Edmonds: But the Luddites objected to these mechanized looms, and as a result, we all have cheap clothing. You’re not suggesting that it would be better if clothes were made by hand?

Acemoglu: No, absolutely, I’m not suggesting that clothes should be made by hand, nor that we should give up diggers and excavators and go on using shovels. But some of the Luddites may have had the view that, yes, break all the machines and let’s keep on doing things the way we have been for ages. By the way, which is also not quite correct, because the weavers were doing so much better in the early 19th century, precisely because spinning had been mechanized, and that had increased the demand for weaving. But that’s a different story.) But there were others within the broad Luddite tent that were saying, “No, let’s try to find a way of introducing the new technology, but in a way that’s good for workers as well.” And I think that’s the emphasis that is very important and sometimes gets lost.

Edmonds: It’s difficult to imagine what that would mean in terms of the mechanized looms, other than perhaps introducing it more slowly so that workers have time to adapt.

Acemoglu: Yeah, I think that’s one possibility, but that’s not the one that I am actually about. That’s not the right perspective. The right perspective is: can we also do other things with technology at the same time so that we introduce new tasks, new capabilities for workers? So, the world would be a very different one in the early 19th century if, instead of just rapidly throwing out weavers because the power looms took their jobs, at the same time you also introduced other technologies that could re-employ these workers, especially re-employ them at relatively high wages.

And if you look at periods in which the UK economy or the American economy have generated rapid, robust wage growth, such as, for example, the three decades that followed World War II, those weren’t characterized by lack of automation. In fact, automation was quite rapid. There were a lot of machines, just like the power looms, that took tasks that workers used to perform. But what the secret sauce of these periods was that at the same time as that automation was going on, employers also introduced new technologies that increased the contribution of workers to the production process, and that’s why they were actually willing to hire the workers and pay them high wages.

Edmonds: And you talk about three decades after World War II, something happens at around 1980, late 1970s, where the benefits of technology stop being evenly distributed. Can you tell me how dramatic a phenomenon that is and exactly what explains it?</