Tyler Cowen & Alex Tabarrok on AI, Jobs, and Economic Growth
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In a world with strong AI, there's a kind of moral nervousness that sets in.
So I'm much more likely to tell people, like, hey, you'd better fasten your seat belt. Like, you don't wanna miss out on what's coming, how
many years you might live. Suppose I tell you that AI is going to create 50% unemployment. Half of the people in the workforce will lose their jobs. That sounds terrible. You know, that's catastrophic. Suppose, however, that I tell you that the work week will be cut in half. People will do half as much work. That actually sounds glorious. You know, that sounds great. And yet, these are almost the same thing. The problem with social media isn't that it stores information. The problem is that it stores information instead of you storing the information. Every time you screenshot something instea
One of the biggest questions surrounding AI is what happens to work. Will increasingly capable systems eliminate jobs, create new ones, or fundamentally change the relationship between labor, productivity, and economic growth? Economists Tyler Cowen and Alex Tabarrok take a long view. Looking across centuries of technological change, they argue that growth itself is often the most important variable. It creates new industries, expands opportunity, and raises living standards, even when the specific jobs of the future are difficult to predict. Wyatt Thompson of OpenAI speaks with Tyler Cowen an
So one of the fears I hear most often is that strong AI or AGI is just going to put everyone out of work. I have a much more optimistic view than that, and I think most economists do. And one way to think about it is just to realize AI creates many, many jobs, even though it will take away some jobs. So one of the neatest properties of current AI models is they allow a small number of individuals working with AI to really do a lot more work than was possible previously. So this will mean more companies, more projects, more nonprofits, just more ventures, more attempts to entertain people, and
All right. Let me give a little bit of
a big picture. Productivity. Productivity just means getting more output from the same inputs. Productivity growth is really the entire secret to economic growth and to improving the standard of living. You know, in 1970, not that long ago, but 1970, half of the world's population was living in extreme poverty. That means less than $3 per day, half of the world's population. Today that number is 8.5% and it's falling. And that's what productivity growth did. It has eliminated or greatly reduced extreme poverty. Now extreme poverty is not the only part of the story. The median American today ha
the
vacation. The vacation was a nineteenth century invention of the rich, which became democratized in the twentieth century. Think the two day weekend, the twentieth century invention. The very idea that somebody of working age would stop working before their body gave out and spend fifteen to twenty years enjoying leisure, that would have blown the minds of almost anybody in the turn of the century, 1850, 1870. The very idea of retirement is a new idea for most people. When So you're thinking about what is the effect of AI going to be, I think the place to begin is not to think about 50% unempl
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