How can we maximize the upside of new technology and minimize its downside?
That’s the subject of an important new book by two prominent economists. Daron Acemoglu and Simon Johnson are professors at the Massachusetts Institute of Technology, one of the leading temples in the cult of technology. Acemoglu is the author (with James Robinson) of Why Nations Fail: The Origins of Power, Prosperity, and Poverty. Johnson was chief economist at the International Monetary Fund. In Power and Progress: Our Millennial Struggle for Technology and Prosperity, Millennials look at technological innovation to understand the potential impact of AI.
The answer they get is not a happy one – even if they come to that conclusion with annoying brahmin populism. It’s a book written for the kind of people who hang out in innovation districts like Kendall Square in Cambridge, Massachusetts, or the halls of Harvard painted across the street.
Acemoglu and Johnson reject the techno-optimism view that technology will inevitably lead to progress in the future – a view that is a certain form of liberalism. They say nothing is automatic because new technologies bring widespread prosperity. Throughout history, powerful elites have mastered new technologies and used them to enrich themselves and control their subordinates. This is not just a matter of extracting the gains from productivity improvements. It involves distorting the ways in which technology is developed and implemented to benefit one group over another.
Here are some examples from the book. Agricultural improvements in the Middle Ages—such as better plows, crop rotations, and mills—enriched landlords and clergy and often left peasants worse off. Eli Whitney, who greatly improved the productivity of the cotton industry by separating the plant fiber from the easily sticky green seed, spread the cotton gin to slavery and extended its adoption in the United States. The technological revolution since the 1980s has balanced workers’ incomes and enriched the bosses, a combination of outsourcing, reengineering and ideology.
The authors acknowledge that technological advances are often the work of those who challenge the status quo. Britain’s industrial revolution was led by self-educated artisans of the “middle class” who revolutionized production by steam, whose elites were moving everywhere. George Stephenson, the inventor of the “rocket” train, was the son of poor and illiterate parents in Northumberland. Richard Arkwright was the son of a tailor whose inventions revolutionized the textile industry. But these technologies and their makers were finally combined by the ruling class.
Countervailing forces can come together and drive technology from optimal enrichment to collective profit creation. The authors praise electoral competition, trade union power, and the coalition of reformist intellectuals and politicians. However, the authors worry that AI is bursting into a world where such powers are dispersed. Business titans enjoy more power and prestige than they have had since the days of Labor. Organized labor is very simple; And democracy is captured by money. The winning formula (innovation + guidance) has been replaced by a losing one (elite control technology).
In Acemoglu and Johnson’s view, the digital revolution has already been hijacked by self-seeking elites. The computer hackers’ dream world of decentralized power and open innovation has been replaced by a hellish oligopoly of tech giants. These use machines and algorithms to replace workers: they control workers to extract more surplus value. “One of the things we hear consistently from workers is that they’re treated like robots because they’re being controlled and monitored by these automated systems,” says one labor advocate quoted in the book.
The new oligopoly has created spy capitalism: an economic system that collects more data on all of us to sell to advertisers. These advertisers, along with media criminals, can manipulate this information more effectively than ever before, personalizing ads, shaping the information environment, and playing on people’s emotions. The result is a fundamental challenge to John Stuart Mill’s 19th-century notion of the sovereign individual.
The authors’ main worry about AI isn’t that it’ll do unexpected things like blow up the world, even though that’s undesirable. It enhances the existing monitoring, energy replacement and sensing system. Their biggest solution is to use public policy to shift the focus of new technology from “machine intelligence” to “machine utility.” But before we have the opportunity to do that, they warn that we need to educate public opinion and fill democracy.
The book offers interesting policies to create a better version of the future: provide government subsidies to develop more socially useful technologies; Refusal to patent technologies focused on employee or citizen surveillance; removing tax incentives to replace labor with machines; dismantling large technology companies that enjoy market shares not seen since the days of American industrialists John D. Rockefeller and Andrew Carnegie; Repealing Section 230 of the Communications Decency Act of 1996 protects internet platforms from legal action or regulation of content they host; And impose a digital advertising tax.
The belief that something should be done about technology is not as original as Acemoglu and Johnson think. The first sentence of the book: “Every day we hear from executives, journalists, politicians that we are moving towards a better world in an unprecedented way with technology.” In fact, most of us hear the opposite every day.
There is a lot of popular and media anxiety over AI. Elon Musk has joined dozens of technologists to “pause” for six months after creating the most advanced forms of technology, as he reaches the implications. Chief strategist Henry Kissinger, who turns 100 this week, worries that AI, as an efficiency-maximizer, will drive future military conflicts in a direction of unparalleled brutality. Rather than a one-way trip to hi-tech destruction as put together by the authors, we may be in the midst of making an important choice—indeed, maybe we’ll finally prove Mill again.
There is a kind of deliberate myopia to the book. Acemoglu and Johnson say little about the benefits that technological innovation brings to consumers. The most surprising thing about the inventions of the 19th century, for example, is not their effect on wages – as the authors point out – but their effect on the overall quality of life. People who live in darkness can summon light after sunset, thanks to electricity. Thanks to the train, people never traveled more than a few miles from home.
The liberating role of technology was accelerated in the 20th century: think of the role of the radio in bringing entertainment to isolated farms, or the role of the washing machine and vacuum cleaner in reducing the time spent on household chores. These benefits are not benevolent intellectuals dividing profits for the common good, but capitalists chasing profits by selling people what they want.
The authors have an interesting way of dividing the world into the elite (bad) and the people (good). In fact, the elite included many reformers—free traders like Robert Pell whose repeal of the Corn Laws in 1846 ushered in a reasonable breakfast time. The people are not always angels. Labor unions have become an obstacle to the introduction of new technologies. British publishing houses, which have fought for years to prevent electronic publishing from taking off, are notorious for restrictive practices and hiring dead workers.
Acemoglu and Johnson fail to realize how much “the people” can sometimes do for personal gain rather than apostolate for the common good. The difficult trick is to strike a balance between allowing the market to produce the (often unexpected) benefits of competition and preventing the distortion of special interests. This can only be done by keeping a clear eye on both “the people” and “the elite”.
For all its sins, Big Tech has given us electronic marvels that put much of the world’s knowledge at our fingertips. AI is already starting to do the opposite of what the authors say oligopoly is plotting: make it easier to find and present data, empowering regular workers and giving us all our own research assistants.
The authors are rightly concerned about the way the Chinese government is using the digital revolution to control and oppress the people. But what about India? Thanks to technology billionaire and chairman of Infosys Ltd. Nandan Nilekani, India has introduced the largest biometric identification system that will provide a digital identity to 1.3 billion Indians. People who once had no way to verify their identity now have access to unemployment benefits, bank accounts and cell phone service. This simultaneously revolutionized the lives of the poor and increased the government’s ability to monitor the population.
The story mentioned in the book as part of the argument is also decent. The assertion that “England produced little lasting benefit throughout the Middle Ages” may surprise admirers of the universities of Oxford and Cambridge, the writings of Chaucer, or indeed the Magna Carta.
Too bad the book is so sketchy. That’s because Acemoglu and Johnson show great concern about the evolution of the technology industry. The liberating power of the Internet was diminished by the marriage between Google and advertising (something founders Larry Page and Sergey Brin didn’t think about as students). The internet is now used to tempt us to buy things we don’t need and to democratize information. AI’s emancipatory power will certainly be limited and similarly skewed.
But the authors’ attitude limits the book’s appeal. In their view, “hate speech” is always spewed from “white nationalists,” never from the anarchists and Antifa activists who turned Portland into a riot zone. There are many people on the right who worry about the power and direction of technology. Conservatives are concerned about the ability of tech companies to get rich by connecting directly to the fundamental aspects of our nature. The best way to create a new regulatory system is to build a broad coalition that includes rights.
There is nothing inevitable about the direction of technology. Powerful people can direct it toward narrow interests rather than the common good. Organizations with a clear vision of the relevant sections of the society can guide it in a more enlightened way. Given the speed of AI advancement, time may be short, but there is still time to free ourselves from digital slavery.
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This column does not necessarily reflect the views of the editorial board or Bloomberg LP and its owners.
Adrian Wooldridge is a global business columnist for Bloomberg Opinion. A former writer at The Economist, he is the author, most recently, of “The Aristocracy of Talent: How Meritocracy Made the Modern World.”
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