The Runaway Train of AI

The runaway train of the AI frenzy is another great example of how human nature and the free market can conspire to push humankind much faster than it can possibly adapt, likely causing major disruption and damage.

Humans love to create, and they also love to acquire wealth, fame and power.  The capitalist system and free market have accomplished many great things, but the frenetic and hurried nature of innovation and competition has often had very nasty side effects that would have been less pronounced had there been a more controlled and thoughtful path.

 

There have been multiple technological frenzies in our history that have dealt heavy blows to society.  The first may have been the conversion to large scale agriculture as hunter gatherer societies went from small tribal units to vast populations under the despotic control of a combination of religious and military tyrants.  Yuval Harari, who wrote the highly entertaining and insightful book “Sapiens”, called the agricultural revolution the biggest fraud in history!  The relatively stable and fulfilling lives of the hunter gatherers became infinitely more precarious and unpleasant with the transition to large scale agriculture.   

 

In the long run, of course, agriculture would become a reliable and powerful aide to humanity, but it took tens of thousands of years.

 

The industrial revolution, heralding the advent of true capitalism and the free market, is a perfect example of how a technological frenzy can accelerate societal change much faster than it can be accommodated.  Once the steam engine genie was out of the bottle, there was no stopping.  Soul-sucking, smoke-spewing factories spread like wildfire and entire families worked 6 or 7 days a week, 12 to 16 hours a day, including children.  The working conditions were incredibly harsh and dangerous.  Many of the artisans and skilled craftspeople lost their livelihoods, and vast numbers of people left the land to become even more enslaved in dirty, oppressive cities.

 

Of course, agricultural work was no picnic, and in the long run (a hundred years later!) factory and manufacturing work would provide a more stable and less onerous labor situation than farm life.  But the transition was brutal and it can be argued that its chaotic and cruel path led, or at least strongly contributed, to some of the most horrific events of the 20^th century – world wars and revolutions, dictatorships and genocides.

 

Another technological revolution was nuclear power.  The rapid development and proliferation of nuclear weapons came frighteningly close to annihilating the entire earth several times, and is experiencing a bit of a renaissance today as the large number of nuclear capable nations vie for dwindling resources and find themselves in an ever more confrontational geopolitical system. But at least there we have governing bodies attempting to control and restrict their use.

 

The most recent example of technological frenzy is the one-two punch of the computer and the Internet. The first punch, let’s call it a jab, put computers on everyone’s desktop and automated much of our business and commercial lives.  There was some level of displacement and job loss, but not nearly the type of hard-core unpleasantness that occurred in the industrial revolution.  Ironically, however, there was also not the dramatic increase in productivity that pundits expected.  We are still waiting for that.

 

The second punch of the digital revolution, call it a roundhouse blow, hit us hard.  The Internet, social media and smart phones developed so quickly and became so dominated by megacompanies and super wealthy individuals that the initially miraculous availability of information and connection became a nightmare of digital manipulation. It sparked a breakdown of civility, a tsunami of disinformation and populism as well as a torrent of anxiety, depression and psychological damage.  Not to mention the loss of privacy and the absurd inundation of advertising.

 

Central economic planning and control in the style of mid-twentieth century Soviet Russia or China were tragic failures.  But abandoning all civic control of the development of major societal forces and technologies and allowing the free market and human greed to dictate our future is not turning out to be a great idea either.  

 

And now we have AI.  The frenzy around AI far exceeds any previous frenzy.  The race to develop more advanced versions and facilitate ever greater processing of digital data is driven by a combination of competition, greed and a desperate fear of not staying relevant.  The primary players are all public or private companies with nothing to rein them in and huge egos at their helm.  There are prominent voices crying out for caution and a more controlled and monitored process of development.  Many of these voices are experts in the field.  But they are generally being ignored, and the cult of the totally free market and no government interference has firmly entrenched itself in the Trump autocracy and billionaire class.

 

No one can stop AI, and no one should.  But the short and long term disruptions and risks of AI progressing at a dangerous and breakneck speed may well be more than our planet and species can accommodate.  Like the arms race of the 50’s and 60’s, even if our nation were under more intelligent leadership there would be tremendous pressure to ‘beat the Chinese’.  The only effective restraint would have to come from an international movement and agreement between the key competing governments.  In the current climate of suspicion and ill will, this is, sadly, unlikely to occur.

 

Taxing the Rich: So Necessary but Almost Impossible to Achieve

The election of Zohran Mamdani as mayor of New York City has brought new energy into discussions of wealth and income inequality.  The NYT reported in an article on the French debate over imposing the Zucman tax (a wealth tax on those with more than 100M euros) that it is estimated that the wealthiest 1% in the world own 43% of the world’s wealth.

I find it difficult to understand how people cannot concede that wealth and income inequality have grown dramatically and that the superrich have far too much power in political and economic spheres.

 

The super rich, surrounded by sycophants and unimaginable wealth, become deluded about their accomplishments.  They interpret their success as evidence of superior wisdom and capability.  They imagine themselves as humankind’s heroic class.  Like emperors, kings and robber barons of the past, they define their role as that of demi-Gods, chosen by destiny.

 

A subset of the billionaire class believes that they are more capable of solving the world’s problems than governments that they view as paralyzed by partisan rancor and boxed in by outmoded ideologies and platforms.  They are convinced that their control of much of the world’s wealth is warranted.  Many see massive investment in technology (under their control of course!) as more likely to provide long term benefits than any redistribution of wealth or other government programs.

 

But there is no technology quick fix for the world.  Neither Musk’s robots nor Altman’s Super Intelligent AI nor Zuckerberg’s meta-world will substitute for the slow, but steady international improvement of conditions on planet earth.  Indeed, it is more likely that these overwrought technology investments and frenetic races to dominate AI will cause more harm than good.

 

The French economist Thomas Piketty, in his book on this topic, Capital in the Twenty-First Century, recommends much higher taxes on both the income and wealth of the rich. But how likely is that to occur? 

 

In the USA, the subject of taxation has been highly controversial since before the birth of our nation.  Even when it is emphasized that tax increases would only affect the top 10% of incomes and wealth a significant percentage of those in the middle or lower classes side with their wealthier compatriots in strongly opposing such taxes.

 

The main arguments against increasing taxes on the wealthy are the following:

• Large tax increases will cause an exodus of those affected to countries with low tax rates (what Piketty calls ‘the race to the bottom’)
• Tax increases will hobble the economy by decreasing technology research, investment and expansion of businesses. It will decrease the incentive of entrepreneurs, inventors and job creators.
• The real economic problem is overspending by governments and increasing taxes will only make this problem worse.
• The rich already pay a majority of the taxes.
• Redistribution of wealth will only encourage sloth and dependency in the lower classes.

I will address each of these arguments and then explain why I sadly have almost no hope for any sizable wealth distribution outside of a major catastrophic chain of events.

 

First of all, let’s face it.  Almost everyone fights like hell to keep what they have.  And when you are a billionaire or have a few hundred million, then you have quite an arsenal for battling anyone or any group planning to take money from you.  The argument that higher taxation will cause capital flight is very valid.  Wealthy people already hide part of their wealth offshore.  Many New Yorkers already live half the year in Florida to escape NY city and state taxes.  But more on that later.

 

The long-lived argument that higher taxes on the wealthy will cripple the economy, stifle innovation, etc. etc. may have some validity at certain levels.  But today’s plutocrats have so much wealth that it is ludicrous to claim that having to give up some of it would cause them to stop investing or innovating. Exempting smaller entrepreneurs and business owners where increased taxation might hamper their efforts would need to be part of a larger tax concept.

 

The argument that governments are overspending and that higher taxation will simply encourage more profligate spending may have a germ of truth in some cases.  Any significant tax increases must go hand in hand with earnest bi-partisan efforts to analyze government programs, reduce where possible and eliminate waste. I think it is reasonable to aggressively pursue both revenue and expenses.  But a chaotic, vengeful and slapdash gutting of government departments a la DOGE is clearly not the right way to do it.

 

The argument that the rich already pay a majority of the taxes is specious.  The amount of taxation should be based on how much the taxpayer can bare without serious consequences, not by the percentages, especially in times of rising inequality.  Significant increases in taxes on both income and wealth would not change the lifestyles or the business decisions of the superrich and would barely impact even the top 10%.  As Jesus said, to whom much is given is much required! 😉

 

And the final argument, that wealth redistribution would only encourage sloth and dependency, is a fallback to the weary, old claim that the world will always have rich and poor and that the rich propel the world forward, while the poor drag it down.  Yes, human nature has elements of sloth and opportunism, and it also has elements of avarice and arrogance.  No one is advocating a scheme to completely eliminate poverty or inequality.  

 

To counter this line of argument, I would avoid using increased tax revenue for direct transfers to low earners.  Instead, I would invest in quality-of-life areas such as healthcare, education, transportation, network access, housing and urban renewal. This would defang the concerns about creating more dependencies and entitlements.  Creating a better quality of life so that there is less cost for healthcare, transportation, childcare and housing could make lower wage earners more productive, more stable and less vulnerable.

 

But there has rarely been a move to significantly raise taxation in advanced societies.  The great majority of the wealthy will never embrace it and they have ever more power to obstruct it.  Capital flight would certainly occur and it is highly unlikely that all nations will agree to avoid the ‘race to the bottom’ of providing tax shelters for those fleeing taxation.

 

The only times in history where redistribution of wealth has been achieved and inequality has decreased occurred after major wars or brutal economic depressions.  Unfortunately, this is probably the only likely scenario for rectifying the current disparity of wealth in this world.  And all signs point to one or the other occurring in the not-too-distant future.  I vote for depression, being the less catastrophic of the two.  But maybe climate change will trump them all!