Ai - What is it really costing us?
It's hard to know who to believe at the moment amid all the commentary. Some technocrats like Musk are positively messianic about Ai while some of the OG architects (like Yoshua Bendgio, Stuart Russell, Tristan Harris, Roman Yampolskiy) are growing louder in their warnings that we are not headed for utopia.
It seems likely that the benefits of Ai will be so great that we ignore or minimise the risks. A bit like those gambling adds - that spend 27 seconds telling you how great their gambling platform is and the last 3 seconds asking "gambling, what is it really costing you." What is Ai really costing us?
Some of the best writing on this in recent months has come from Dario Amodei, the CEO of Anthropic- according to his website "a public benefit corporation dedicated to building AI systems that are steerable, interpretable and safe."(here)
I have a level of trust in Amodei as a leader and Anthropic as an organisation because they were recently blacklisted by the US Government as "supply chain risk" because Anthropic, in good conscience could not agree to Pentagon demands to remove safety restrictions from its AI models regarding fully autonomous weapons and mass domestic surveillance. Way to go Anthropic! For their insolence, the government ordered a six-month phase-out of Anthropic AI technology across government - which may put them out of business (here).
Amodei's recent essay (here) "The Adolescence of Technology- Confronting and Overcoming the Risks of Powerful AI" is well worth a read. In this essay he asks the reader to imagine the scenario of a new nation suddenly appearing. This new nation is only populated by people, all of whom are much more capable than any Nobel Prize winner, statesman, or technologist that ever lived - and it has a population of 50 million of these geniuses. Amodei asks what might be the risks of such a nation of geniuses emerging?
He theorises that that such a nation may want to politically and militarily dominate the world through its superior technologies - and that would be bad. Alternatively it may be leveraged or manipulated by existing rogue nations who have that intent - and that would be really bad. But even if neither of these happened, and the nation was benevolent - the third, more likely scenario is rapid technological change that "disrupts the global economy, causing mass unemployment or radically concentrating wealth."
I think all three scenarios are really bad, but the most immediate is the economic impact of the third- which is already in motion (here). Software giant Atlassian recently announced it is cutting 1,600 jobs as it accelerates its Ai transformation. WiseTech Global reveals its plans to cut 2,000 (1/3) of its staff with the same rationale. Block Inc. (Afterpay) is cutting 4,000 jobs globally. The major banks are all undertaking "structural resets" of their workforces. White collar jobs are on the chopping block in all sectors as businesses scramble for the efficiencies of agentic Ai. "Structural resets" is a nice way of saying, people are inefficient and expensive so lets cut them out of our business so we make more money.
I have a level of trust in Amodei as a leader and Anthropic as an organisation because they were recently blacklisted by the US Government as "supply chain risk" because Anthropic, in good conscience could not agree to Pentagon demands to remove safety restrictions from its AI models regarding fully autonomous weapons and mass domestic surveillance. Way to go Anthropic! For their insolence, the government ordered a six-month phase-out of Anthropic AI technology across government - which may put them out of business (here).
Amodei's recent essay (here) "The Adolescence of Technology- Confronting and Overcoming the Risks of Powerful AI" is well worth a read. In this essay he asks the reader to imagine the scenario of a new nation suddenly appearing. This new nation is only populated by people, all of whom are much more capable than any Nobel Prize winner, statesman, or technologist that ever lived - and it has a population of 50 million of these geniuses. Amodei asks what might be the risks of such a nation of geniuses emerging?
He theorises that that such a nation may want to politically and militarily dominate the world through its superior technologies - and that would be bad. Alternatively it may be leveraged or manipulated by existing rogue nations who have that intent - and that would be really bad. But even if neither of these happened, and the nation was benevolent - the third, more likely scenario is rapid technological change that "disrupts the global economy, causing mass unemployment or radically concentrating wealth."
I think all three scenarios are really bad, but the most immediate is the economic impact of the third- which is already in motion (here). Software giant Atlassian recently announced it is cutting 1,600 jobs as it accelerates its Ai transformation. WiseTech Global reveals its plans to cut 2,000 (1/3) of its staff with the same rationale. Block Inc. (Afterpay) is cutting 4,000 jobs globally. The major banks are all undertaking "structural resets" of their workforces. White collar jobs are on the chopping block in all sectors as businesses scramble for the efficiencies of agentic Ai. "Structural resets" is a nice way of saying, people are inefficient and expensive so lets cut them out of our business so we make more money.
This is not a new idea.
The industrial revolution began somewhere in the mid 18th century and lasted for at least 100 years. During that tumultuous period three things happened:
The industrial revolution began somewhere in the mid 18th century and lasted for at least 100 years. During that tumultuous period three things happened:
- Short term, unemployment rapidly rose in traditional agrarian and trade sectors where skills were made redundant.
- Medium term jobs shifted and new ones were created, but conditions worsened for workers.
- Long term total employment types and scale increased significantly with rapid economic growth.
The problem we face in the Ai revolution is that the technological change will be exponentially greater and will happen in 10 years, not 100 years. Perhaps the industrial revolution script may play out with a happy ending - but how happy will it be for 99.5% of the global population?
Either way we are already in the early days of mass "structural resets" which will make hundreds of professions, thousands of skillsets and millions of people redundant. No happy ending for especially white collar workers - who make up about 50% of the Australian workforce.
So let's play this out. What happens if half these people have no job in 10 years time? What happens if unemployment modestly rises so say 15%? What does history tell us?
Either way we are already in the early days of mass "structural resets" which will make hundreds of professions, thousands of skillsets and millions of people redundant. No happy ending for especially white collar workers - who make up about 50% of the Australian workforce.
So let's play this out. What happens if half these people have no job in 10 years time? What happens if unemployment modestly rises so say 15%? What does history tell us?
- After WW1 the "roaring 20's" was a time of unfettered social and economic optimism. By the decades end in 1929, that bullish optimism had swelled Wall Street to unprecedented highs. Then suddenly late in 1929 the wheels fell of the market and by 1932 had lost 85% of its value plunging the world into the great depression - a time where unemployment tipped 20%. This was a period of great misery and suffering across the western world.
- After WW2 the global economy for the most part experienced that same rebound and an endless summer of growth and low unemployment with many markets around the world growing by 300-400% in value between 1982 and 1987. Then in October 1987 Stock markets crashed worldwide, first in Asian markets, then Europe, then the US, and finally Japan. $1.7 trillion dollars in losses. Australian stocks fell by 40% and by 1990 Australia was in the recession Paul Keating said "we had to have" - and unemployment tipped 10%.
- The lead up to the 2008 Global Financial Crisis was much the same story of loose borrowing and hedonistic consumption. Then like a house of cards, the economy broke under the weight of dodgy loans, and inflated valuations - markets crashed and unemployment again nudged 10% while central banks scrambled to bail out banks and big business to keep the economy moving and people in jobs.
- For the most part, global economies then experienced a decade of growth till you guessed it, Covid. The world faced a new kind of economic crisis. In Australia, unemployment momentarily tipped 10% as state and federal governments spent billions propping up businesses in an effort to keep people in jobs while the world nervously waited for a vaccine.
So is 15-20% unemployment possible in the next decade with the Ai revolution? Probably, and with it, much misery. And not just here but everywhere, especially in more vulnerable economies who no longer represent the cheap off-shore alternative for wealthy nations. The call centre in Mumbai is now empty, the web designers and software engineers in Bangalore have closed down, the textile workers in Bangladesh have been replaced by robotics - all are caught up in this revolution.
If the industrial revolution saw a shift from blue to white collar workers, the Ai revolution will see a shift from white to blue collar, or no collar. But without the wealthy white collar salaries and taxes driving the economy, who can afford to employ the blue anyway? Perhaps blue collar jobs will be more defensible in the short term, but only with the assumption that we have an economy that is not broken (and longer term, where Ai powered robotics will go).
Meanwhile back in 2026 we are happy to play with our spooky new genius friend who flatters us and tells us what we want to hear. But for how long and at what cost?
I know if you want clicks as a writer you say something outrageously polarising or sensational. Meh, I'd rather take the hope filled middle ground wherever possible. That said, of all the issues I've written about for almost a decade now, this one has me most concerned. Not so much for myself, but my kids and their kids. How do you have a conversation with your kids about the future and their vocational choices?
If you are a parent, I think it is essential we are literate to the emerging Ai world so that we can help the next generation navigate the world they are entering - their vocational choices, their emotional and functional boundaries, their discernment of what is real and what is fake, the nurturing and deepening of exclusively human experiences, and appreciating the gift of having a soul.
If the industrial revolution saw a shift from blue to white collar workers, the Ai revolution will see a shift from white to blue collar, or no collar. But without the wealthy white collar salaries and taxes driving the economy, who can afford to employ the blue anyway? Perhaps blue collar jobs will be more defensible in the short term, but only with the assumption that we have an economy that is not broken (and longer term, where Ai powered robotics will go).
Meanwhile back in 2026 we are happy to play with our spooky new genius friend who flatters us and tells us what we want to hear. But for how long and at what cost?
I know if you want clicks as a writer you say something outrageously polarising or sensational. Meh, I'd rather take the hope filled middle ground wherever possible. That said, of all the issues I've written about for almost a decade now, this one has me most concerned. Not so much for myself, but my kids and their kids. How do you have a conversation with your kids about the future and their vocational choices?
If you are a parent, I think it is essential we are literate to the emerging Ai world so that we can help the next generation navigate the world they are entering - their vocational choices, their emotional and functional boundaries, their discernment of what is real and what is fake, the nurturing and deepening of exclusively human experiences, and appreciating the gift of having a soul.
Worst thing we can do is passively let it all just happen around us.
