{"id":229808,"date":"2026-01-12T13:22:07","date_gmt":"2026-01-12T13:22:07","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/229808\/"},"modified":"2026-01-12T13:22:07","modified_gmt":"2026-01-12T13:22:07","slug":"the-dangerous-paradox-of-a-i-abundance","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/229808\/","title":{"rendered":"The Dangerous Paradox of A.I. Abundance"},"content":{"rendered":"

Even if A.I. doesn\u2019t greatly accelerate economic growth, there\u2019s the issue of how it affects employment and wages. The key issue here is whether A.I. primarily complements or substitutes<\/a> for human labor. If it enables office workers to carry out their tasks more quickly and effectively, for example, it could raise their wages, preserve many existing jobs, and create well-paid new positions for people who are adept at working with A.I. agents. In a recent article, S\u00e9b Krier, a manager for policy development and strategy at Google DeepMind, argued<\/a> that \u201cfuture workers will likely function as orchestrators of intelligence,\u201d overseeing what A.I. does. Over the longer term, A.I. could also create new jobs and new professions that we can\u2019t currently envision, which is what other transformative technologies have done.<\/p>\n

But the fact remains that if A.I. agents can eventually carry out virtually all cognitive tasks without human intervention\u2014a possibility touted by their promoters\u2014many workers could be displaced, and firms may be reluctant to take on new ones. Given the evolving capacities of models like OpenAI\u2019s ChatGPT, Google\u2019s Gemini, and Anthropic\u2019s Claude, it\u2019s perhaps unwise to wholly discount the prediction from Dario Amodei, the C.E.O. of Anthropic, that within five years A.I. could eliminate half of all entry-level white-collar jobs. Elsewhere in the economy, who knows what could happen? But if the marriage of A.I. and robotics proceeds, in other sectors, along the lines that it seems to be moving in the automotive industry, where autonomous vehicles are already being deployed in some places, taxi-drivers and truck drivers likely won\u2019t be the only blue-collar workers whose jobs are affected.<\/p>\n

\u201cIt\u2019s clear that a lot of jobs are going to disappear: it\u2019s not clear that it\u2019s going to create a lot of jobs to replace that,\u201d Geoffrey Hinton, one of the pioneers of the deep-learning models that underpin generative A.I., remarked at a conference<\/a> last month. \u201cThis isn\u2019t A.I.\u2019s problem. This is our political system\u2019s problem. If you get a massive increase in productivity, how does that wealth get shared around?\u201d If A.I. abundance does materialize, that will be a central question.<\/p>\n

In a recent Substack article, Philip Trammell, an economist at the Stanford Digital Economy Lab, and Dwarkesh Patel, a tech podcaster, pointed out<\/a> that in standard economic theory deploying more capital raises workers\u2019 productivity and their wages, but reduces the rewards of further capital investment as diminishing returns set in. This \u201ccorrection mechanism\u201d keeps the over-all shares of income that accrue to labor and capital pretty constant over time. But if A.I. is easily substitutable for labor throughout the economy, and a potential shortage of workers is no longer a bottleneck to production, the stabilization effect disappears, capital incomes \u201ccan rise indefinitely,\u201d and the owners of capital receive an ever-growing share of the economic pie, Trammell and Patel write. How far can this process go? \u201c[O]nce A.I. renders capital a true substitute for labor,\u201d Trammell and Patel write, \u201capproximately everything will eventually belong to those who are wealthiest when the transition occurs, or their heirs.\u201d<\/p>\n

Trammel and Patel relate their analysis to Thomas Piketty\u2019s book \u201cCapital in the Twenty-First Century<\/a>,\u201d from 2014, which argued that, under certain conditions, rising inequality is inevitable under capitalism. To address this problem, Piketty called for a global tax on wealth. Trammell and Patel argue that Piketty\u2019s pessimistic analysis hasn\u2019t applied until now, but \u201che will probably be right about the future.\u201d They also endorse Piketty\u2019s policy solution, writing, \u201cAssuming the rich do not become unprecedentedly philanthropic, a global and highly progressive tax on capital (or at least capital income) will then indeed be essentially the only way to prevent inequality from growing extreme.\u201d (The tax would have to be global, the authors argue, because if capital doesn\u2019t need much labor to produce things it would be even more mobile than it is now, which would enable it to evade national levies.)<\/p>\n

The article by Trammell and Patel has already received some pushback online, largely on the ground that its assumption that capital is perfectly substitutable for labor is unrealistic. Brian Albrecht, the chief economist at the Portland-based International Center for Law & Economics, argues that the process of A.I. machines replacing workers is likely to take a long time<\/a>, and during that transition \u201cstandard economic principles apply.\u201d Krier argued that the mere fact A.I. can do something more cheaply or effectively than human workers doesn\u2019t mean it will inevitably replace them. \u201cPeople pay a lot to go see concerts and Olympic races even if in principle a model can generate the same song and a robot can run faster,\u201d he wrote.<\/p>\n","protected":false},"excerpt":{"rendered":"Even if A.I. doesn\u2019t greatly accelerate economic growth, there\u2019s the issue of how it affects employment and wages.…\n","protected":false},"author":2,"featured_media":229809,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[15173,365,363,72530,364,9323,3911,136854,136855,111,139,69,145],"class_list":["post-229808","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-a-i","tag-ai","tag-artificial-intelligence","tag-artificial-intelligence-a-i","tag-artificialintelligence","tag-capitalism","tag-inequality","tag-john-maynard-keynes","tag-karl-marx","tag-new-zealand","tag-newzealand","tag-nz","tag-technology"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/229808","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=229808"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/229808\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/229809"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=229808"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=229808"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=229808"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}