As professor Joseph Stiglitz sees it, AI is not just another technology wave\u2014it\u2019s a force that can erode jobs and hardwire a new era of inequality. That is, unless governments and institutions deliberately push it in a different direction.\u00a0<\/p>\n
AI lets firms strip labor out of production, concentrate profits at the top, and push the risks of transition onto workers and the public\u2014exactly the trajectory the Nobel laureate warns about in his 2024 book, the recently reissued The Road to Freedom: Economics and the Good Society. Now, the economics professor argued in a recent interview with Fortune, AI is emerging as a textbook case of how technology can turbocharge inequality.<\/p>\n
\u201cIf we don\u2019t do anything about managing AI, there is a threat that it will lead to more inequality,\u201d Stiglitz said. \u201cAnd since inequality is such a bad, serious problem in our society, that is a great concern to me.\u201d<\/p>\n
Stiglitz has spent his career watching capitalism fail the people it was supposed to serve. He\u2019s studied financial crises, globalization\u2019s broken promises, and the slow hollowing out of the American middle-class. Now, at 83, he is watching the next chapter unfold in real time\u2014and he is not optimistic.<\/p>\n
The \u2018tech bros\u2019 are pulling up the ladder<\/p>\n
Here\u2019s where the politics get truly combustible: The very people driving AI adoption are simultaneously leading the charge to shrink the governmental institutions that could cushion AI\u2019s disruption. For Stiglitz, this isn\u2019t a contradiction\u2014it\u2019s a strategy.<\/p>\n
\u201cUnfortunately, the tech bros, who are obviously advocates of this, are at the same time pushing for smaller government, which will undermine the ability of the government to do exactly what is needed in order to make a successful transition,\u201d he said.\u00a0<\/p>\n
The result, he argued, is a self-fulfilling trap: \u201cIf the tech oligarchs continue in their mindset overall of downscaling government, that will impair the ability of government to facilitate the AI transition. And you know, that\u2019s the central boundary that we\u2019re facing\u2014that they are creating the conditions that make it impossible for a successful AI transition.\u201d<\/p>\n
The government \u201cneeds to to provide support for helping people move from where they\u2019re no longer needed to where they might be more productive,\u201d Stiglitz offered.<\/p>\n
However, government regulation stands directly in the way of what most company owners are looking to do: reduce overhead expenses and drive the bottom line. Technology strategist Daniel Miessler<\/a> recently argued that \u201cthe ideal number of human employees inside of any company is zero.\u201d For owners, labor has always been a cost center; AI is the first technology that credibly promises to hollow it out entirely. That is the inequality Stiglitz has been describing for years. Stiglitz\u2019s answer is that, right now, no one with power is listening.<\/p>\n Even those at the top of the financial system are starting to say it out loud. BlackRock<\/a> CEO Larry Fink, speaking at Davos earlier this year<\/a>, made a similar observation, noting AI\u2019s \u201cearly gains are flowing to the owners of models, owners of data, and owners of infrastructure.\u201d Meanwhile, the bottom half of Americans, who own about 1% of stock market wealth, are nowhere near the table. Fink asked plainly: What happens to everyone else if AI does to white-collar workers what globalization did to blue-collar workers? The answer, he implied, could be capitalism\u2019s next big failure.<\/p>\n Stiglitz said this sounded familiar. \u201cIn the Great Depression, it was partly a success of agriculture. We increased productivity enormously. We didn\u2019t need as many farmers, but we had no ability to move people out of the rural sector, and we finally did it in World War II. But it was government intervention as a result of the war that resolved that problem. We don\u2019t have the institutional framework for doing that.\u201d<\/p>\n