Political Economy in the Age of AI

We have to start thinking seriously about the potential implications of AI on our governance structures and our systems of power. In case you haven’t noticed, the AI race is fully on and moving fast. While we are all so busy worrying about the usual problems of politics—things like the wars in Ukraine and Gaza, whether abortion should be legal, and what to do about rising immigration—companies around the world are racing to develop the most powerful technology ever and they are doing so with no public oversight whatsoever.

This is as serious as the race to create atomic weapons, if not more. Except this time around, the effort is being led by private multinational companies rather than the government. What could go wrong? 

Microsoft and OpenAI announced recently that they were investing $100B into a data center and an AI supercomputer called Stargate, which, by the way, sounds way too similar to Skynet, right? Anyway, it is an unprecedented investment and something we should watch closely, especially in light of all strange developments at OpenAI’s safety division. On two occasions now OpenAI’s safety team has resigned en masse. It makes you wonder just what they have seen? The conspiracy theory here is that Open AI has discovered something big, something wildly powerful and frighteningly so—perhaps Artificial General Intelligence itself. The singularity may be closer than we all think.

To give you all some context, as of now, the largest supercomputer in the world cost something like $1B to make. So, here we are talking about something 100x more powerful. Just what are they going to do with this thing?

Recently, I had the opportunity to sit down with prominent AI expert, Nathan Labenz, for a forthcoming episode of The Nick Halaris Show and was blown away by what I learned. I don’t want to reveal too much because it’s an episode you should definitely listen to all the way thru, but I will say this for now: the rise of AI is going to challenge everything we know about our world. It’s not just about the jobs and the economy, although the impacts there will be monumental. AI is about to challenge everything—our governance systems, our culture, and even our social contract. And it’s not at all clear right now what an AI dominated world will look like. 

Hands Down Some of the Best
Credit Cards for Balance Transfers

Did you know some credit cards can actually help you get out of debt faster? Yes, it sounds crazy. But it’s true. The secret: Find a card with a “0% intro APR" period for balance transfers. Then, transfer your debt balance and pay it down as much as possible during the intro period. No interest means you could pay off the debt faster. Check out the full list of cards you can use to do this here.

The AI landscape is at once both incredibly optimistic and existentially frightening. It’s crazy to think that we may be on the verge of creating something that is more intelligent than we are. This may be the greatest moment in human history, our crowning achievement, and the start of the first true Golden Age of humanity. It may also be our Tower of Babel moment. 

Now, before we actually go and create this thing, we should probably start thinking seriously about questions like:

Just who is going to own and control AI?

If AI-powered robots eliminate a bunch of jobs, how are people going to make a living? What are people going to do with their time? How are we going to ensure a just and equitable world?

What does the social contract look like in an AI dominated world?

Here’s what we know today. 

If we do nothing and just let the status quo play out, AI technologies are going to be owned and controlled by a handful of powerful profit-seeking multinational corporations, none of which have a great track record when it comes to considering the true best interests of ordinary citizens. And eventually, because everything gets copied and stolen, these technologies will make their way into the hands of governments around the world (just like the atomic bomb did). 

That being said, there’s still a lot of upside here. The most optimistic AI accelerationists are forecasting nothing less than the end of all human drudgery and the eradication of wealth inequality. The idea is that AI will drive down the costs so much that even if everyone isn’t rich or equally wealthy, their material needs will be so well covered that people won’t be looking to money or material things to bring them happiness. We can only hope!

Well, if that happens, just what will people do all day and what will they care about?

It’s hard to tell. They probably won’t work as much, that’s for sure. In a world of abundance and mass prosperity, something like Universal Basic Income could actually work. To date, the main problem with UBI is that it is dangerously inflationary. Whether it’s the late Roman Empire experimenting with “bread and circuses” or the COVID-era UBI trial balloons, the end result has always been a nasty bout of inflation. That being said, AI has the potential to be the most deflationary technology of all time. Imagine a world where there’s not one single person on Earth doing manual labor. Imagine a world where you hardly need to consult a human doctor, lawyer, or accountant. Things would be a lot cheaper, that’s for sure. Labor as a share of global GDP is something like 50%-60%. 

I’m not blind, by the way, to the moral question here. It’s not entirely clear at all that not having to work for a living would be the best outcome for us. However, I do think there’s no question that we modern people have way over-indexed economic aspects in the calculus the ideal human life. If AI can help us move towards a more balanced existence, that’s probably a good thing.

We also know there’s real theoretical concern that advanced AI could be really bad for humanity, perhaps existentially so. What I learned from Nathan is that we don’t really know how these large language models work on the inside. That, in and of itself, should give us pause. Is it really a good idea to unleash a technology that we don’t understand? Just because we can, doesn’t mean we should! 

For what it’s worth, I find myself more concerned about the question of who is going to control AI than the Terminator moment. By now, we know enough about ourselves to know that we are the real threat here. Is there anything more dangerous on Earth than the power-crazed human being? Not really…Not even close!

The real reason AI frightens us so much is that we know it represents a huge threat to our existing social contract. Since the onset of the Industrial Revolution, the focus of political economy has been all about fostering ever-more economic growth. The core thesis of the social contract has been the promise of happiness via the sacrifice our time, creativity, and energy in pursuit of economic productivity. If AI produces mass prosperity, we’ll have to think of something else.

Sitting here today, it’s hard to imagine what that might be. We are so culturally conditioned to believe in the primacy of work and money. We measure ourselves on those terms as individuals, as communities, and as Nations. We judge our leaders primarily on how well the economy did during their time in office. Our moral sense is even tied up in this. Finance has become the altar for our prayers. 

But it hasn’t always been that way and maybe it won’t be in the future as well. 

Perhaps we can replace economic pursuits with education and create a society where people very deliberately work their whole lives to expand their understanding and improve their consciousness. Maybe there’s a creative component to this as well and instead of trying to make money we seek every more authentic expressions of our true selves. Perhaps, there will be a spiritual component to this and the whole world will become an ashram. It could also just be the same as ever and our latest Utopian dreams will fade away under the harsh realities of a new AI-dominated power structure.  

Who knows! 

The only thing I know is this: for the sake of freedom and the future, we better make sure we win this race and do so in a way that doesn’t involve sacrificing our integrity for profits or power. 

Like what you’re reading? Join us on our socials for more content throughout the week. 🙏 Thank you!