It's not quite "expertise" that justifies the wage gap, it's supply and demand. Almost anyone can be a crossing guard--not everyone can be an air traffic controller. If AI theoretically could make anyone an air traffic controller, one would expect the salary to collapse as well.
Additionally, the notion of a middle class relies on a wage differential. If AI levels the playing field so dramatically, the notion of middle class will entirely evaporate since everyone's purchasing power equalizes.
>The contemporary challenge is the high and rising price of essential services like healthcare, higher education and law, that are monopolized by guilds of highly educated experts.
The rising cost of education and healthcare are not exactly going to the "guilds of highly educated experts" as much as they are ballooned by second-order effects from an overly complicated system. For example, the higher cost of education is not going to professors as much as it's going to the administrative costs as colleges continue to compete for a growing supply of students willing to pay (in part because the mass availability of student loans allows them an extensive line of credit and also because the labor market makes it seem like they must get a degree to be competitive).
We can study this by looking at examples!
Slovenia (where I'm from) has the 3rd lowest gini index in the world[1]. Meaning we are the 3rd most egalitarian country in the world with close to zero income inequality.
You would think this is fantastic, but in practice it means everyone's equally poor-ish. There's a lot of talent drain. Everyone in my millenial generation that's great at their job has either moved out of the country, works remotely for foreign companies, or has built a business that primarily targets foreign markets. They're starting to build a proper middle class, but there's nowhere for their money to go.
There aren't enough higher middle class folk to support all the services they'd want. So the extra money goes to foreign companies or into inflated real estate that has become unaffordable to anyone employed locally.
And there are no rich people to tax or ask for philanthropy to break the status quo. A net worth of ~$20mil puts you on the list of top 100 richest Slovenians as of 2023. Most of them made their money abroad and have also moved their wealth out of the country to avoid high taxation.
The concept of "upwards mobility" is barely worth talking about.
[1] https://en.wikipedia.org/wiki/List_of_countries_by_income_eq...
- “prompt engineer - accounting” who has vast history of accounting practices
- “prompt engineer - lawyer”. No more farming out writing up complicated EULAs to Skadden. Have your general counsel do all of this for you with the help of “AI”. Or maybe have an IPO prepared without the help of a middleman such as “JPM” or “Goldman Sachs”. Billable hours drop significantly.
- “prompt engineer - swe”. Instead of multiple teams of engineers. Have “Devin” scaffold out the basic application while you focus on architecting an end to end solution.
All of those “middle class jobs” once held by mid tier specialists have evaporated.
Then the code review will still require a human senior developer and maybe the architect. The testing after that can be fuzzed by AI but will still need to be confirmed by a human senior QA specialist.
In other words, AI can lower the bar for entry level work (not by much), but it does not eliminate or create any new jobs. It's very similar to what search did for entry level work. Search results "powered by AI" are also over a decade old.
We choose yo ignore wealth ineqaulty for delusional reasons
Yup, and that is going to be the defining problem of the next decade - IMHO even more than climate change and most other environmental issues.
The lower classes aren't going to be threatened by AI, not for a looong time until we get "I, Robot"/Star Trek TNG Data-like robots with precision dexterity comparable to a human. The jobs they do aren't automatable at all, have been automated long ago so it's not an issue any more (most of manufacturing, mining) or human labor will be cheaper than a robot replacing it (which is sad enough - shouldn't automation actually free the masses from toiling in hard and rewardless jobs?).
The higher classes (depending on definition, usually the 1-10 top % of wealth) aren't going to be threatened by AI either. Those who have the money have the power after all, and almost everyone with a fully paid off home and a second one to rent out should be set even for the worst cases.
But the wide masses? Realistically, as you said most of them will fall to lower classes in income and lifestyle, and a very few luckshotters (="AI prompt engineers") manage to raise up. We've seen in the last decade or so just how powerful and reactionary the search of these masses for a scapegoat for their externally-caused misfortune can be, and it can take on a lot of different forms: nationalism to far-right xenophobia, antisemitism, anti-muslim, anti-intellectual ("antivaxxers", a ton of "homeschoolers")... that's a lot to take on even for a stable society, and external influence (enemy nation propaganda, financially motivated propaganda such as the Macedonian troll farms hunting for ad placements, domestic media moguls) makes it even worse.
Honestly I have zero idea how the fuck humanity is supposed to continue to exist as a civilization longer than 10-20 years. Even the best of our democracies are falling apart not just at the fringes (you always had and will have loons) but in the center.
>or human labor will be cheaper than a robot replacing it
One option is to create an automation tax, which makes human labor more competitive while also supplanting the income taxes that are lost due to automation. That's just one example, but like so many problems that are of man-made origin, there are also potential solutions of man-made origin. They are not natural laws.
So if AI enables every unskilled worker to produce $132k of value instead of $33k, who gets the $99k surplus? Marxist economics teaches us that in a capitalist society, without additional state intervention, the employer gets all of it. Too bad for the worker.
The good news, though, is that most labour economists wouldn't go as far as Marx. In modern societies the working man seems to get at least some benefit from productivity gains that don't come directly from him working harder. And even if you do believe Marx, note the caveat about "without state intervention". The modern state has many tools to intervene and is not afraid to use them: taxes, minimum wage laws, mandating bullshit jobs. In this scenario, doubling minimum wage wouldn't hurt economic productivity - the workers are all producing $132k of value, so not a single one will be laid off if they need to be paid $66k each.
Of course, there are some coordination problems to solve...
This is an important distinction that the author misses. People are paid according to their value to the economy, not their value to society. So, even if the jobs were similar in expertise, the crossing guard would likely not make as much because the ATC provides more to the economy.
*FWIW, I'm not saying this is moral or fair, it's just is the way the economic cookie crumbles.
That may have been the case 30, 40 years ago in the US. In reality, the minimum wage in almost the entire US (unchanged since 2009, to add!) is not enough to afford to have a family [1]. Companies and the ultra rich aren't taxed shit - when you have people like Warren Buffett calling to tax him and his ilk more [2], it's obvious that the situation is clearly out of control.
"Recall that the advent of pre-AI computing made the expert judgment of professional decision- makers more consequential and more valuable by speeding the task of acquiring and organizing information. Simultaneously, computerization devalued and displaced the procedural expertise that was the stock-in-trade of many middle-skill workers. But imagine a technology that could invert this process: what would it look like? It would support and supplement judgment, thus enabling a larger set of non-elite workers to engage in high-stakes decision-making. It would simultaneously temper the monopoly power that doctors hold over medical care, lawyers over document production, software engineers over computer code, professors over undergraduate education, etc."
"Artificial Intelligence is this inversion technology. By providing decision support in the form of real-time guidance and guardrails, AI could enable a larger set of workers possessing complementary knowledge to perform some of the higher-stakes decision-making tasks currently arrogated to elite experts like doctors, lawyers, coders and educators. This would improve the quality of jobs for workers without college degrees, moderate earnings inequality, and — akin to what the Industrial Revolution did for consumer goods — lower the cost of key services such as healthcare, education and legal expertise."
"Moderate earnings inequality" means "fewer high-paying jobs", as someone pointed out in another comment. From where does the pressure come to raise incomes across the board? That's what unions were for. In the US, the unions were crushed. The whole idea of paying people more than they are worth as an economic unit, a key goal of the union movement, is almost forgotten. Yet that's what this paper assumes will happen. Somehow.
This is "trickle-down" economics with an "AI" label pasted on it.
The author has better papers. His "Why are there still so many jobs" (2014) [1] is worth a read. He makes predictions one can now check.
[1] https://economics.mit.edu/sites/default/files/publications/w...
No, it wasn't. A company can't survive long paying all its employees more than they're worth. The goal of unions was, at least as far as pay is concerned, only to reduce the margin that was skimmed off of employee value by employers.
"What we want to consider is, first, to make our employment more secure, and, secondly, to make wages more permanent, and, thirdly, to give these poor people a chance to work. The laborer has been regarded as a mere producing machine ... but back of labor is the soul of man and honesty of purpose and aspiration. Now you cannot, as the political economists and college professors, say that labor is a commodity to be bought and sold. I say we are American citizens with the heritage of all the great men who have stood before us; men who have sacrificed all in the cause except honor. . . . I say the labor movement is a fixed fact. It has grown out of the necessities of the people, and, although some may desire to see it fail, still the labor movement will be found to have a strong lodgment in the hearts of the people, and we will go on until success has been achieved!"
Gompers was noted for answering, when asked what labor wanted, "More".
[1] http://historymuse.net/readings/GompersWhatdoestheworkingman...
To pick a few things we could do: -> criminal liability for white collar crime -> muscular antitrust -> roll back citizen's united -> public option for health insurance -> taxes on real estate as investment
I don't understand why people think this is all or nothing. Plenty of countries are doing much better than the US on these fronts.
The problem is that for the people on the 1000000 end of the spectrum, the same mechanics that encourage investment in productive activities also encourage investment in corruption, as they make no distinction between the two. With hundreds of billions in present-value-of-future-cash-flows at stake, almost any expenditure is justified. The laws of economics say that for you lobbying is a hobby, but for them it's a job with ROI (a whole office full of jobs, in fact). That's a steep advantage to overcome, but we've done it before and we'll do it again.
My understanding is that most people's understanding of "middle class" is "about 20% richer than me", and that this remains true regardless of how rich one is.
Most people, for most of the years since Joseph Marie Jacquard realised he could control a loom with punched cards, the Red Queen race of automation has given us more stuff and experiences per hour of labour — if you wanted to live the 1820s idea of a middle class life, you can retire as soon as you get around €$£ 25-50k of savings (just don't start a family, the rest of society considers this standard to be unacceptable for that, what with no electricity).
If this improvement in living standards is despite, or because of, each business trying to maximise revenue, is basically the entire disagreement between Adam Smith and Karl Marx; though it's worth also noting that neither liked rent-seeking, and if you have a completely efficient market then nobody can extract any profits because competition drives margins to zero… but also since then we've had research show that complex markets aren't and can't be efficient: https://arxiv.org/abs/1002.2284
There are better definitions.
> Karl Marx
You said Voldemort's name! Now he will surely haunt us.
In any case, your objective function dramatically changes when you own things for a living rather than work for a living. Many people would call someone with a 1MM retirement portfolio rich, but 4% returns on a 1MM portfolio is $40k/yr and probably isn't going to replace a job, not for someone who managed to amass 1MM in the first place. However, 4% returns on a 10MM portfolio is $400k/yr, and it might. 4% on $100MM is $4MM/yr, and it probably will. So the composition of incentives switches from worker-like to owner-like somewhere around $10MM net worth, and this is worth noting.
If you ever saw old timey movies from the 50s or 60s where "millionaire" was said with reverence, note that $1MM in 60s dollars is $10MM in 2024 dollars. They were aware of the class divide back then in a way that people generally are not today.
That's nonsense. It's not just businessmen that compete for consumer's money. Consumers compete for businessmen's money as well.
Suppose a widget-making enterprise made 3% profit on it's capital. What's the sensible thing a widget maker should do? Obviously, fire his employees, sell or scuttle his machines, turn everything into cash and turn the cash into 4.313% treasury bonds.
And the destruction of widget-making machines and enterprises shall continue until widgets sell at a margin that justifies their existence. And if nobody can afford widgets at the that price, there shall be no more widgets.
I find it amazing how people can talk about capitalism, without any understanding of the concept of capital, it's formation and destruction.
That's just for the hypothetical streaming agency. When you add up all these little increases of just about every good and compare that to wage growth, you see that wages are stagnating relative to other metrics like cost of living or business/national productivity, in the US or the UK or just about anywhere with these sort of metrics available. You can raise minimum wages to fend of a total economic collapse every now and then but these increases find their way to these other hands reaching into your pocket before long as well. A constant sucking noise and a march to what, I'm not sure, but it won't be pretty I expect.
The world is mostly inhabited by people who work for a living but mostly run by people who own things for a living.
These two sources of income (or capital gains -- heaven forbid we tax our rich like we tax our plebs) lead to highly distinct and often directly opposed objective functions. The extent to which this leads to a self-serving policy spiral for the rich is a function of the degree to which the inhabited-by/run-by distinction is true: with a steep enough wealth distribution, yeah, it's fair for people at the bottom to say that people at the top actually are all colluding.
The self-serving policy spiral doesn't look like "Lidl hikes prices and Tesco doesn't, so you can just shop at Tesco," it looks like "merger approved between Lidl and Tesco, now listen to the surviving PR department tell you how this will surely save you money."
Ok, and I claim that the problem with the current model of capitalism, as opposed to the post-WWII model, is that it's oppositional to a middle class - the incentives are opposed.
Now the question is about the societal outcomes we expect from the systems people create. Why should we prefer greater inequity and an even more complete loss of the middle class? These things are all being imposed by human-manufactured systems - we can control them.
We don't even need to throw AI or human desperation or planned economies on this bonfire of ideas to recognize that, as initially posed, the problem is itself incorrect.
Control of these systems lies in the capital class not in the working class. They prefer greater inequality, you and I probably don't but you and I have zero agency to do anything at all about how the world works. We lack support and we lack money to advertise our position and garner support relative to the groups empowered and enriched by the status quo.
Most people are afraid of “next-level” AI, where no operator is required. If trucks can be moved without anyone at the wheel, truck driving is a job that won’t exist anymore. As simple as that.
Whether trucks can be 100% autonomous remains to see.
As technology becomes more intelligent, the human comparative advantage shrinks. But what is likely to happen? Don’t look to the past. Look at the fundamentals of the system dynamics.
Consider an analogy. The differential equation that governs blackbody radiation depends on the difference between the object and the environment. Similarly, a person’s earning capability is proportional to the difference between their capability and the next best option. As the next best option gets better and better, the human differential advantage craters.
Max Tegmark uses the metaphor of a rising ocean to signify the ever greater capabilities of intelligent machines.
AI isn’t just coming for low-skilled jobs. It isn’t just supplementing knowledge work. AI will take more and more intellectually demanding jobs. This arguably doesn’t even require AGI. This just requires industry deploying capable AI’s that can do enough tasks to replace humans one industry at a time.
So people that have an ownership stake in these AIs will do fine.
My take: The others should demand a universal basic income. How do we find ways to allow people to live good lives? People that weren’t lucky enough to be born into the right places in society don’t deserve to be displaced by AI.
If you read the AI literature, I’m not alone in what I’ve said above.
Granted, I’m also not offering particular time frames and not covering all future scenarios. But what I’m saying is more considered than the usual default ‘reasoning’ you hear people say.
A truly 100% autonomous vehicle requires a much higher level of intelligence than a self driving vehicle with a driver able to take the wheel when necessary.
Take the case when some work is happening on the road and workers make signs with their hands to tell you to go this or that way. But on the same road there is also someone who is dressed up as a policeman cause it’s Halloween, and he’s waving at some friends.
A lot of this breathless talk surrounding this turn of AI is so uncomfortably reminiscent of what I’ve seen before in the mainstream the last turns around the 1970’s and 1980’s, and the potential failure mode might not be so different: solving the last 5-10% is tantalizingly close but remains stubbornly out of reach of calls for the “more cowbell” of each era or call to action by the sales legions (currently cowbells look like NVIDIA boards and various counts of AI models be it tokens or what have you), and the last 5-10% is the necessary advance to cross the chasm.
I love and use the tech myself every hour, but it has deep gaps I don’t see being resolved even incrementally between versions or competitors.
I don't doubt that, but the timeframe is unknown. 5 years? 10 years? Within our lifetime?
You're right to be skeptical. Don't believe them. Demand a greater slice of the created value for yourself, and until you get it (and it manages to have a positive impact on your finances - see inflation), tell these people to shove their whitepapers where the sun doesn't shine.
Note that in this analysis, if you are a software engineer, you are not the "middle class" as most signs point to. Rather you are a member of an elite that the middle class must wrest power from.
The identity of the middle class is another question. You might assume that it's made of the people you know, but more likely it's underpaid workers from developing countries.
Healthcare should be free for all. UBI. And of course continued education provided to train workforce into something else.
We have people and companies with so much power that it rivals governments, and in the US we also have a large segment of the population who has been conditioned to believe that the government is bad and having less of it will make it better, but it seems to me like better government that actually supports the needs/desires of the populace at large is required to make our society better for everyone.
Yes, AI will lower the barrier for entry level positions (IMO a good thing; more chances for smart creative people to get in the game who may have been failed by more traditional systems). But it will also allow the creation of projects by much smaller teams, who no longer need to stress the details and have a focus on making a thing just to try it out.
Individuals will be able to get much more experimental and iterate way faster; if the amount of investment to build an MVP is less than the investment to research and assess all that crap that usually has to go into a commercial product (market fit, funding, marketing, sales, etc.) then you can just make the damn thing and see if the pasta sticks to the wall. This could be a really great environment for testing out weird ideas, some of which might be completely novel and break the mold in ways that are simply not feasible if you have to manage all that other stuff.
I'm also excited to see what new stuff pops into the OSS space as a result of devs-with-jobs being able to hack out a proof of concept in a couple hours and smacking some stuff together over weekends.
No. Empirically, has it?
It will do the opposite. It removes trust, therefore making existing powers more powerful. Ain’t going to democratize anything but cybercrime.
It hasn't really been around long enough for an empirical analysis of effects. It's also incredibly hard to measure effects with the systems themselves being in such flux.
For what it's worth, I think categorical statements of any stripe are a little premature. Even the EA folks speak in probabilistic margins.
I knew a very comfortably well-off lady who made a fine point of how she never used the automatic machines in the supermarket, because she wanted to ensure that those poor cashiers didn't lose their jobs.
How noble!
Generally speaking, this is an oxymoron.
Sorry, I've become very pessimistic these days. If something can be used to permanantly reduce FTEs, it will be done.
How long can this state of affairs stay afloat? Does a business require the ability to exploit workers in order to succeed and be useful?
> The unique opportunity that AI offers humanity is to push back against the process started by computerization
Yes. More automation and computers will clearly solve the problems created by automation and computers.
I can't find where he probably says something like "outsourcing of these jobs will also improve middle class outcomes" but I assume it's in there through some kind of weasel-wording.
https://kottke.org/21/04/ted-chiang-fears-of-technology-are-...
So long as the dominant theology in this country is extractive capitalism, nothing that tilts the cost balance towards capital and away from labor will be good for the middle class or the average person.
Actual title of PDF: "Applying AI to Rebuild Middle Class Jobs"
Let's look at history. The industrial revolution was predicted to create copious leasure time for the working class. How did that turn out?
The steam engine, the cotton gin, the automobile, the computer...
Every single technological advance that was predicted to improve the lives of the working class due to massive increases in productivity, was used instead to almost exclusivly bennefit ownership.
This is exactly what will happen with current LLM tech (please don't call the bullshit generators "AI")
If the tech cannot be deployed so as to exclusively bennefit ownership, it won't be deployed at all...
