I’m in London this week. Before I left home, I contacted my phone company to check my rate plan. I hate talking to AI droids, so I waited for several minutes to get a human on the line.
I asked the human, what does my plan cost me when I make calls to and from London, or use other internet and text services in London? And what are the options to pay a flat rate and reduce the per-minute charges? Pretty straightforward questions. It took the human maybe half an hour to figure out what I was asking and in the end she still wasn’t clear about the options. And she couldn’t manage to send the required text message to complete the transaction. So I gave up and reluctantly “talked” with the AI.
The AI understood just what I wanted, spoke in whole sentences, weighed the pros and cons of different options, and we completed the transaction in about five minutes.
Uh-oh.
Since the last time I did this, AI conversations have gotten a lot better. But then, continuous learning is the essence of generative AI, right?
I suspect that in a very few years, call centers will be a thing of the past. And a great deal more.
I was originally somewhat skeptical of the premise that AI would take a lot of jobs. But let me quote a parable from the Nobel laureate economist Wassily Leontief from more than 70 years ago, that I’ve quoted before.
In Leontief’s parable, at some point the production economy will become so automated that there will be only one human worker, and her job will be to flip the switch. At that point, Leontief said, there will be two questions: Who will get the benefit of all that wealth? And what will everyone else do for a living?
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We already know the answer to the first question. Where AI and finance are concerned, the new wealth is going almost entirely to an oligarchy of centibillionaires who will soon include trillionaires. AI has supercharged what was already an appalling concentration of wealth and income.
As far as the second question is concerned—what will everyone else do for a living—Leontief actually understated the problem. It isn’t just the factory economy that will no longer need many human workers; much of the service economy is also at risk.
It’s clear that we need two basic policies whose essence is simple but whose details need to be the subject of inquiry and debate. First, we need to tax the living daylights out of concentrated wealth and income, so that all of the economic gains don’t go to a tiny elite, and so that there is plenty of money to create other jobs. And second, we need to consider how to create those jobs and/or to complement them with some kind of universal basic income.
On the first question, California’s November ballot Proposition 40, for a one-time 5 percent wealth tax on billionaires, win or lose, has opened the door to a national debate on taxing wealth. The tax is not perfect, but it is good enough for six Nobel laureates including Joseph Stiglitz and Paul Krugman, who recently wrote in a joint statement:
Proposition 40 offers the first opportunity for the people to start reining in the power of billionaires. It isn’t just critical for Californians. If the state that houses some of the country’s most powerful billionaires votes to tax their wealth, it will kickstart a movement to tax ultra-high-net-worth individuals in other states—and eventually at the federal level and in other countries. As Californians head to the polls, their vote may well come to be seen as a turning point in the battle between democracy and oligarchy.
There are lots of other ways of taxing concentrated income and wealth, including taxing capital gains and inheritances at the same rates as wage and salary incomes. We need to be debating and discussing them.
On the question of what everyone else will do for a living, I’ve called for a national commitment to create millions of jobs, all of which will pay middle-class incomes, taking care of the old, the young, and the sick. And while AI will displace some humans in health care, it is hard to imagine AI working with preschoolers or the elderly, or replacing stay-at-home parents.
And then there is … leisure, something hard to imagine when more and more Americans are working extra hours to make ends meet. It will take the right politics to turn unimaginable wealth for a new leisure class into a balance of useful work and leisure for everyone else.
While in London, the best thing I’ve done was to go see the new play The Standard of Living, about the life and work of John Maynard Keynes, a great humanist as well as the greatest economist. In his celebrated essay “Economic Possibilities for Our Grandchildren” (which is us), Keynes anticipated Leontief and the immense gains in automated productivity. Keynes called for a 15-hour workweek, and not just to promote leisure but to spread the available work, which he considered necessary for human fulfillment. He wrote:
For the first time since his creation man will be faced with his real, his permanent problem—how to use his freedom from pressing economic cares, how to occupy the leisure, which science and compound interest will have won for him, to live wisely and agreeably and well. …
For many ages to come … everybody will need to do some work if he is to be contented … Three-hour shifts or a fifteen-hour week may put off the problem for a great while.
