Last week, the Sveriges (Swedish) Riksbank awarded their Nobel Memorial Medal in Economics to three professors: Joel Mokyr of Northwestern, Philippe Aghion of the London School of Economics and Peter Howitt of Brown University.
The trio shared the prize shared the prize for their extensive research that illustrated the link between technological progress and long-term economic growth which leads to higher standards of living globally.
John Hassler, the chairman of the prize committee said: “Sustained economic growth, driven by a continuous stream of technological innovations and improvements, has replaced stagnation.” Most of our historic growth has been in the last 200 years and important discoveries lifted whole societies.
Hassler went on to stay that radical innovation is often described as “the theory of sustained growth through creative destruction….an endless process in which new and better products replace the old.”
Creative destruction was popularized by 20th century economist Joseph Schumpeter, a colorful, brilliant but controversial character who was from Austria but spent his last years at Harvard. **
Professor Howitt of Brown tipped his hat to Schumpeter but stated in an interview that there “was still conflict at the heart of economic growth” as innovation often leads to significant job losses. Dr. Howitt stated that the conflict still needs to be dealt with going forward.
Well, what does all this have to do with Media Realism? Pretty simple to me. The biggest wrecking ball to hit the status quo over the next several years in Artificial Intelligence (AI). As positive and efficient as it will likely be it should also lead to some profound job losses. Here is where I believe the mainstream media is really missing the boat.
Each time that we have had a dislocation in the economy due to a tech or industrial breakthrough, job losses tended to be at the bottom end of the skill scale. And, new doors always opened as the emerging industries picked up much of the economic slack.
With AI, it, in my opinion, will be quite different. As AI grows, many white-collar middle management and even senior management jobs will likely disappear in my opinion. These men and women will not adapt well to becoming baristas or Uber/Lyft drivers. The business media is full of questions as to whether AI stocks are in a bubble, but very little is said about the AI revolution may really upset the employment status quo.
As Bette Davis said in “All About Eve”, “fasten your seat belts, it is going to be a bumpy flight”.
**For more on Creative Destruction, see Media Realism, Schumpeter lives in 2009 media (1/30/2009) and Schumpeter revisited (8/22/22).
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com or leave a message on the blog.
