Technology and Society: The Greatest Asset is People
Original Author: Chen Qinhang, The Paper Journalist
On October 14 local time, the Royal Swedish Academy of Sciences announced that the 2024 Nobel Prize in Economic Sciences would be awarded to Daron Acemoglu, Simon Johnson, and James A. Robinson for their research on "how institutions are formed and their impact on prosperity."
The review committee stated in a press release that these three economists have demonstrated the importance of social institutions for a country's prosperity. "A society with weak rule of law and exploitative institutions cannot generate growth or bring about positive change; their research helps us understand why."
Acemoglu was born in Istanbul, Turkey, in 1967 and has been teaching at MIT since 1993. He received the Clark Medal in 2005, and his research spans a wide range of fields including political economy, economic development, economic growth, technological change, inequality, labor economics, and network economics. He has co-authored numerous papers with the other two awardees and has co-written bestsellers with Robinson, including "Why Nations Fail" and "The Narrow Corridor."
In recent years, one of Acemoglu's research focuses has been on the impact of automation technologies, such as industrial robots, on the labor market. In 2023, he co-authored "Power and Progress" with Simon Johnson, discussing the dilemmas faced by AI as the most important technology of our time.
"My research focuses on the interaction between political economy and technological change, which are two major forces shaping our capabilities and growth opportunities, while also influencing our political and economic choices," Acemoglu stated in an exclusive interview with The Paper in June.
His research finds that the current trajectory of AI development is repeating and exacerbating some of the worst technological mistakes of the past few decades. For example, there is an excessive emphasis on automation without sufficient investment in creating new tasks. He believes that business leaders need to realize that their greatest asset is their workers, and instead of focusing on cost-cutting, they should seek ways to enhance workers' productivity, capabilities, and influence.
Acemoglu is very concerned that AI is becoming a means of transferring wealth and power from ordinary people to a small group of tech entrepreneurs. To break the political power of large tech companies, he argues that "relying solely on antitrust measures is not enough; we need to redirect technology towards socially beneficial directions."
He suggests considering three principles to guide AI development: first, prioritize the usefulness of machines; second, empower workers and citizens rather than trying to manipulate them; and third, introduce a better regulatory framework to hold tech companies accountable.
*The following is an exclusive interview article with Acemoglu published by The Paper on June 16, 2024, originally titled “Exclusive Interview | MIT Professor: Concerned that AI is Becoming a Tool for Transferring Wealth and Power to a Few Tech Entrepreneurs”.
According to a report by Reference News on June 15, citing CNN, Apple surpassed Microsoft on the 13th to become the most valuable publicly traded company in the U.S. Last week, the company announced a series of updates, including generative AI features for the iPhone, during its annual global developers conference, which led to a surge in its stock price.
Apple, Nvidia, and Microsoft have been fiercely competing for the title of the world's most valuable company. After redefining "AI" as Apple Intelligence, Apple regained its market value, surpassing Nvidia, which had seen its value soar due to AI chips, and overtook Microsoft to reclaim the top spot. Currently, Apple's market value stands at $3.29 trillion, slightly above Microsoft's $3.28 trillion. Generative AI has become the core driver of the market value increase for these three tech giants.
In the face of this AI boom, the National Bureau of Economic Research in the U.S. recently published a paper by MIT professor Daron Acemoglu, pointing out that the productivity gains from future advancements in artificial intelligence (AI) may not be significant, estimating that the upper limit of AI's contribution to total factor productivity (TFP) growth over the next decade will not exceed 0.66%.
Acemoglu notes in the paper that generative AI is a promising technology, but unless the industry undergoes a fundamental repositioning, including significant changes to the architecture of generative AI models (such as large language models, LLMs) to focus on reliable information and enhance the marginal productivity of workers across industries, rather than prioritizing the development of general, human-like conversational tools.
Acemoglu is skeptical about some overly optimistic predictions regarding AI's impact on productivity and economic growth. As a Turkish-born American economist known for his research in political economy, he has long focused on the interaction between political economy and technological change.
Last year, he co-authored a new book titled "Power and Progress" with British-American economist Simon Johnson, discussing the potential AI revolution that could disrupt human society. They argue that the current development of AI has gone astray, with many algorithms designed to replace humans as much as possible, "but the way to achieve technological progress is to make machines useful to humans, not to replace them."
Mira Murati, Chief Technology Officer of OpenAI, stated at an event in May regarding the controversy over developing artificial general intelligence (AGI) that they are not only focused on enhancing the functionality and utility of models but are also committed to ensuring their safety, aligning them with human values to prevent them from going out of control, thereby creating AGI that benefits humanity.
"As I delve deeper into the capabilities and development direction of AI, I become increasingly convinced that its current trajectory is repeating and exacerbating some of the worst technological mistakes of the past few decades," Professor Acemoglu said in a recent interview with The Paper, noting that most leading players in the AI field are driven by unrealistic and dangerous dreams, namely the dream of achieving general artificial intelligence, "which places machines and algorithms above humans."
Some analysts view Acemoglu as a pessimist regarding AI. He responded to The Paper, stating that as a social scientist, he is more concerned about some negative social impacts.
Acemoglu often collaborates with his wife, Professor Asu Ozdaglar, who heads the Department of Electrical Engineering and Computer Science at MIT. Although their fields differ, the couple generally shares a consistent view on the direction of AI development, though Acemoglu admits that his perspective may be more pessimistic than his wife's.
As the commercialization of artificial intelligence accelerates, many companies are competing in the AI model race, but it is undeniable that tech giants like OpenAI, Microsoft, Google, and Nvidia have already seized the initiative in AI development. Acemoglu expresses deep concern that AI is becoming a means of transferring wealth and power from ordinary people to a small group of tech entrepreneurs, and the "inequality" we see now is a "canary in the coal mine," indicating that worse things are to come.
Technology and Society: The Greatest Asset is People
***Q1: *Your research covers various fields, including political economy, technological change, and inequality. Under what background and circumstances did you begin to focus on the role of technological development in inequality? What was your initial view on technological development, and how has it evolved into your current stance that "the current path of AI development is detrimental to both the economy and democracy"?
Acemoglu:
Much of my research focuses on the interaction between political economy and technological change, which are two major forces shaping our capabilities and growth opportunities, while also influencing our political and economic choices.
AI has become the most important technology of our time, partly because it has attracted significant attention and investment, and partly due to some remarkable advancements, especially with the improvement of GPU performance. Additionally, the pervasive influence of AI has prompted me to research this field.
As I delve deeper into the capabilities and development direction of AI, I become increasingly convinced that its current trajectory is repeating and exacerbating some of the worst technological mistakes of the past few decades—overemphasizing automation, just as we prioritized automation and other digital technologies without sufficient investment in creating new tasks; and social platforms attempting to profit from people's data and interests, leading to all the mistakes made.
I am particularly concerned about the fact that most leading players in the AI field are driven by unrealistic and dangerous dreams, namely the dream of achieving general artificial intelligence, which places machines and algorithms above humans, and is often a way for these leading players to dominate others.
***Q2: *Advanced computer technology and the internet have enabled many billionaires to transfer wealth and have empowered tech giants like never before. Nevertheless, we still embrace such technological innovations because they also bring positive impacts. Technological change has its pros and cons, and historically, society has always found ways to adapt to new technologies. With a new wave of technological advancements sweeping in, why do you believe the issue of inequality is particularly concerning?
Acemoglu:
When it comes to social platforms and artificial intelligence, I agree with the above statement, but I have a different opinion regarding the internet. I believe the internet has been misused in certain ways, though I do not deny that it is a very beneficial technology that plays a crucial role in connecting people, providing information, and creating new services and platforms.
Regarding artificial intelligence, I am very concerned that it is becoming a means of transferring wealth and power from ordinary people to a small group of tech entrepreneurs. The problem is that we lack any necessary control mechanisms to ensure that ordinary people benefit from AI, such as strong regulation, worker participation, civil society, and democratic oversight. The "inequality" we see is a "canary in the coal mine," indicating that worse things are to come.
***Q3: *You pointed out that the inequality caused by automation is "the result of choices made by businesses and society on how to use technology." As the market power and influence of tech giants grow and may even become uncontrollable, what is the key to our response? If you were the CEO of a large tech company, how would you utilize AI to manage the company?
Acemoglu:
My advice to CEOs is to recognize that their greatest asset is their workers, and instead of focusing solely on cost-cutting, they should seek ways to enhance workers' productivity, capabilities, and influence. This means using new technologies to create new tasks for workers and expand their capabilities.
Of course, automation is beneficial, and we will inevitably apply more automation in the future, but that is not the only thing that can be done to improve productivity; automation should not be the sole pursuit and priority of CEOs.
***Q4: *U.S. antitrust enforcers have publicly expressed a series of concerns about artificial intelligence. The U.S. Department of Justice and the Federal Trade Commission are reportedly reaching an agreement to pave the way for antitrust investigations into Microsoft, OpenAI, and Nvidia. Will these antitrust actions against large tech companies genuinely increase market competition and prevent AI development from being dominated by a few companies?
Acemoglu:
Absolutely, antitrust is very important, and some of the issues in the tech industry stem from the lack of antitrust enforcement in the U.S. The five major tech companies have established strong monopolies in their respective fields because they can acquire potential competitors without any regulation. In some cases, they purchase and then shut down technologies that could compete with them to solidify their monopolies. We absolutely need antitrust measures to break the political power of large tech companies, which has become very strong over the past thirty years.
But I also want to emphasize that relying solely on antitrust is not enough; we need to redirect technology towards socially beneficial directions. Simply breaking up Meta into Facebook, Instagram, and WhatsApp will not achieve (increasing market competition and preventing a few companies from dominating AI development). In the field of AI, if there are concerns that AI technology is being used for manipulation, surveillance, or other malicious purposes, antitrust alone will not be the solution; it must be combined with a broader regulatory agenda.
Technology and People: How to Avoid Repeating Mistakes
***Q5: *You have consistently emphasized "machine usefulness," meaning "trying to make machines more beneficial to humans." How do you think this goal should be achieved? What consequences might arise if such a goal cannot be reached?
Acemoglu:
This relates to the advice given to CEOs. What we want are machines that can expand human capabilities, and there is a significant possibility of achieving this with AI. AI is an information technology, so we should consider what kinds of AI tools can provide useful, context-dependent, real-time information to human decision-makers. AI tools can help humans become better problem solvers and perform more complex tasks. This applies not only to creative workers, scholars, or journalists but also to blue-collar workers, electricians, plumbers, healthcare workers, and all other professions. Better access to information can lead to wiser decisions and the execution of higher-level tasks, which is the essence of machine usefulness.
***Q6: *You suggest fair tax treatment for labor. Taxing equipment and software like human employees or reforming taxes to encourage employment rather than automation—are these practical solutions?
Acemoglu:
Yes, Simon Johnson and I proposed in "Power and Progress" that a fairer tax system could be part of the solution. In the U.S., the marginal tax rate faced by businesses when hiring labor exceeds 30%. When they use computer equipment or other machinery to perform the same tasks, the tax rate is less than 5%, which provides excessive incentives for automation while hindering employment and investment in training and human capital. Aligning the marginal tax rates for capital and labor at the same level is a reasonable policy idea.
***Q7: *You propose tax reforms to reward employment rather than automation. How would such reforms affect companies' application and investment in automation technologies?
Acemoglu:
We must be cautious in this regard to avoid discouraging investment, especially in many countries that need rapid growth and require new investments in areas like renewable energy and healthcare technology. However, if we can encourage technology to develop in the right way, it will also benefit businesses. Therefore, my proposal is to eliminate excessive incentives for automation while hoping to achieve this in a way that does not broadly discourage business investment.
***Q8: *The rapid development of social platforms has led to some negative impacts, such as information bubbles and the spread of misinformation. How do you think we can avoid repeating the same mistakes in the further development of artificial intelligence?
Acemoglu:
There are three principles that can help avoid repeating mistakes: (1) prioritize machine usefulness, as I advocate; (2) empower workers and citizens rather than trying to manipulate them; (3) introduce a better regulatory framework to hold tech companies accountable.
Technology and Industry: Digital Advertising Tax Makes the Industry More Competitive
***Q9: *Tech expert Jaron Lanier emphasizes the issue of data ownership for internet users. How do you think personal data ownership and control should be better protected in policy?
Acemoglu:
I believe this is an important direction. First, we will need more high-quality data, and the best way to produce this data is by rewarding those who create high-quality data; a data market can achieve this. Second, data is currently being plundered by tech companies, which is both unfair and inefficient.
However, the key is that a data market is not like a fruit market, where my data can usually be highly substitutable for your data. If tech companies can negotiate with individuals to purchase their data, it will lead to a "race to the bottom," and the administrative costs of doing so will be very high. Therefore, I believe that a well-functioning data market requires some form of collective data ownership, which could be in the form of data unions, data industry associations, or other collective organizations.
***Q10: *What is your view on introducing a digital advertising tax to limit the profits made from algorithm-driven misinformation? What impact might such a tax policy have on the digital advertising industry and information dissemination?
Acemoglu:
I support a digital advertising tax because the business model based on digital advertising is highly manipulative, and it aligns with strategies that create emotional outrage, digital addiction, extreme jealousy, and information silos. It also synergizes with business models that exploit personal data, leading to negative consequences such as mental health issues, social polarization, and a decrease in democratic citizenship.
Worse still, if we are to redirect AI development as I suggest, we need to introduce new business models and new platforms, but the current digital advertising-based business model makes this impossible. You cannot launch a new social platform based on user subscriptions; you cannot replicate the success of Wikipedia because you are competing against companies that provide free services and have a large customer base. Therefore, I see the digital advertising tax as a way to make the tech industry more competitive: if the "low-level means" of profiting from user data through digital advertising can be curtailed, new business models and more diverse products will emerge.
***Q11: *Can you share some positive changes you believe future technological developments may bring, and how we should prepare for and promote these changes?
Acemoglu:
If we use artificial intelligence correctly, it can enhance the professional skills of workers across various industries and improve the process of scientific discovery. I also believe there are ways to use AI democratically.
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