At Quartz Cris Tolomia reports on a joint statement released by 200 economists:
More than 200 economists and researchers, including 16 Nobel laureates, released a joint statement on Monday warning that artificial intelligence could reshape the economy at a speed and scale exceeding the Industrial Revolution, and calling on policymakers and technology leaders to begin building policies and institutions to address the disruption.
The statement, titled “We Must Act Now,” warns that AI “could bring risks, including large-scale job displacement, as well as opportunities such as major gains in living standards.” Among its core demands, the statement urges economists, policymakers, and technology leaders to expand their understanding of how AI is reshaping the economy and to develop guardrails ensuring the technology augments rather than displaces human workers.
The statement’s significance lies partly in who signed it. Erik Brynjolfsson, a Stanford economist who helped organize the effort, said there has been “a notable change in the profession,” according to The New York Times. The economics profession has long pushed back on warnings of swift AI-driven displacement, with most researchers arguing that the timeline for technological disruption is routinely overstated. Among those who put their names to the document are Daron Acemoglu and Simon Johnson — both MIT professors and 2024 Nobel economics laureates — whose earlier public skepticism about AI’s disruptive potential made their participation particularly striking, according to the Times.
with this punchline:
The statement arrives as white-collar payrolls have contracted for dozens of consecutive months, a stretch that Aaron Terrazas, a former chief economist at Glassdoor, has called without precedent outside of a recession.
The situation is even more dire in India (although it’s hard to ferret that out of the official statistics).
The timing is noteworthy. Whether or not AI is already replacing large numbers of workers, corporate managers increasingly appear to believe that it soon will, and that expectation is beginning to influence hiring decisions.
OpenAI and Anthropic are not building most of the world’s new computing infrastructure. The principal investors are the hyperscalers—Amazon, Microsoft, Google, Meta, and others. Their cloud businesses supply AI computation to everyone else. Those firms also happen to account for much of the stock market’s recent gains. And those firms are likely to be the greatest beneficiaries of artificial intelligence.
It may be the case that LLM AI will result in creating more jobs than it destroys. As John Maynard Keynes quipped, in the long run we’re all dead. Workers displaced over the next five years receive little comfort from predictions about the labor market twenty years from now. In the shorter term managers of large companies will see trimming their payrolls as a strategy for boosting their stock values. Whether those productivity gains ultimately materialize is almost beside the point. If executives believe AI allows them to operate with smaller staffs, they have every incentive to reduce payrolls now and explain the decision to investors later.
