AI: Your Ally, Not Your Adversary!
Marc Andreessen, an American entrepreneur, programmer, and co-founder of venture capital firm Andreessen Horowitz, one of the world’s largest cryptocurrency funds, is confident that AI will create new jobs.
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Marc Andreessen has recently written an extensive essay explaining why he believes AI (not crypto!) will save the world. It appears that the focus of venture capitalists is evolving.
Andreessen acknowledges that a degree of AI apprehension exists amongst many in society, and the nature of these fears varies from person to person. Some are afraid of a rebellion by machines, while others dread the prospect of computers making decisions traditionally entrusted to humans – such as teaching or providing medical care. Yet, the most common concern is that AI will displace humans from their jobs, essentially taking over our livelihoods.
Concerns about job loss have persisted since the industrial revolution
Fear of job loss has been a consistent worry for people ever since the invention of the mechanical loom. Now, we face a new challenge – AI. Each wave of panic in the job market has been met with dire predictions of unprecedented consequences, but…
In reality, the narrative has played out quite differently. New technologies have historically led to the creation of more high-paying jobs, ultimately improving the standard of living.
Marc Andreessen points out that we've seen two such waves of panic recently: the fear of outsourcing in the 2000s and worries about automation in the 2010s. However, by the end of 2019, right before the COVID-19 pandemic hit, there were more high-paying jobs across the world than ever before. The pessimistic forecasts had not materialized.
Nonetheless, the notion that AI will obliterate all jobs continues to resurface persistently.
Marc Andreessen appears so exasperated hearing such arguments that he resorts to dry humor, sarcastically remarking, “Surely this time history won’t repeat, and AI will cause mass unemployment – and not rapid economic, job, and wage growth – right?”
Those warning of an AI threat assert that artificial intelligence will render humans obsolete. The misconception that underlies this pessimistic view of widespread AI-induced unemployment is known as the “lump of labor fallacy“. It suggests that there can only be a fixed volume of work in the economy. Consequently, if machines take over, people will be left with nothing to do.
AI implementation will generate new jobs
Contrary to popular belief, the integration of technology in production processes leads to increased productivity. This heightened productivity results in increased wages and concurrently, a decrease in the prices of goods and services. As people's financial capabilities improve, they indulge in shopping more than usual. This surge in demand leads to the emergence of new economic sectors, industries, and products. Hence, the final outcome is economic growth and an increase in job opportunities.
In an optimally functioning market economy where technology is freely integrated, this positive cycle can become virtually unending. With human desires being insatiable, the market, in conjunction with innovations, is always striving to fulfill these needs.
But what if we entertain the idea that this time, AI will indeed replace all human labor?
“This time, we finally have the technology that’s going to take all the jobs and render human workers superfluous – real AI” – Marc Andreessen jests about this probability.
Nevertheless, he predicts that “true AI” will result in unprecedented rates of economic productivity growth. Prices for existing goods and services will become almost negligible. Entrepreneurs, naturally, will capitalize on this opportunity. They'll establish a host of new sectors, products, and services, employing both AI and humans to cater to the rising demand.
And what if AI usurps this workforce as well?
“It would be a straight spiral up to a material utopia that neither Adam Smith or Karl Marx ever dared dream of. We should be so lucky,” sighs Marc Andreessen.
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