Martin Ford@MFordFuture
At 35:00 in this @dwarkesh_sp podcast, they discuss the possibility that job losses from #AI could cause a recession. This is something I devoted an entire chapter to in #RiseoftheRobots, and @Citrini made a similar case in their viral scenario a few months ago.
The economist acknowledges that elevated unemployment is possible, but suggests there is little or no concern this could lead to negative economic growth. He almost seems to suggest that negative economic growth is somehow extraordinary. This seems very complacent. We have negative economic growth in every recession, and recessions occur every 6-7 years or so on average. A commonly used rule is that a recession is defined as two consecutive quarters of negative GDP growth.
Recessions can begin for many reasons, but rising unemployment along with falling consumer confidence are certainly among them.
Try asking your favorite AI model this question:
"If workers/consumers become worried that they might lose their jobs, could psychology alone cause a recession?"
The answer, of course, is Yes. In other words, you don't even necessarily need large numbers of actual job losses. Fear alone could generate a recession--a self-fulling prophesy.
It is also the case that a recession could begin as a result of something other than job losses from AI--for example, an energy shock if the Iran deal falls through and/or the popping of the AI investment bubble--and it will be during the downturn that businesses will have the greatest incentive to cut costs. They may lay workers off for economic reasons and then find that AI allows them to avoid rehiring those workers in the future.
This is exactly what happened with the permanent loss of many middle class jobs in the past. In "Rise of the Robots," I cite a 2012 paper by Jaimovich and Siu that points out that fully 92 percent of the job losses in
mid-range occupations have occurred within a year of a recession.
I don't think economists should just dismiss these concerns.
