Jon Reisman

Artificial Intelligence (AI) is much in the news these days as an innovation that will enhance productivity across the board while causing significant disruption and resource reallocation decisions in labor markets. AI requires significant increases in electricity generation for data centers — increases that the climate alarmists have previously worked assiduously to prevent. The promise of AI is so alluring that the climate alarmists have partially recanted their apocalyptic narrative, and all manner of electric generation is being welcomed or at least considered — nuclear, coal, natural gas, solar, and wind. Thirty years of climatista policies to raise the price of energy and ration its use were unceremoniously dumped in favor of AI cheerleading. Competition with China is often dragged out as a reason we must go full steam ahead.

Creative Destruction is the economic analysis of innovation developed by Austrian-American economist Joseph Schumpeter. Two of his intellectual heirs won the Economics Nobel Prize this year for their work on the causes and consequences of innovation. Creative Destruction holds that technological innovation (like industrialization, oil and gas use, the internet, and now AI) disrupts paradigms and systems, causing massive resource reallocations from “old” (destruction) sectors to “new” (creation). Innovation causes both growth and chaos. Growth potential stirs entrepreneurial and political spirits and optimism. Chaos potential stirs anxiety.

AI has the potential to enhance productivity across the board. That includes cyber warfare, cyber hacking, and identity theft, but also cybersecurity. AI also has the potential to enhance innovation itself — by directing research and development strategies and initiatives and applying brute force data analysis. President Trump just signed an executive order to harness AI innovation for national security, health care, energy, and medical research. Innovation causes both growth and chaos. AI can multiply all three — innovation, growth, and chaos. 

AI anxiety is likely to increase as creative destruction layoffs spread across the economy. AI can be both a substitute for human labor (destruction/chaos) and/or a complement (creation/growth). Being an AI complement as opposed to a substitute is likely the best strategy to avoid innovation irrelevance and unsustainability. Easy enough to state in general, but hard to implement in practice.

Consider the task of producing a weekly opinion/politics/policy column. I could explicitly use AI to research facts and data. This is using AI as a complement to enhance productivity. Or my publisher could use AI to produce the column. After a few iterations/model training/corrections, AI-generated Freedom Studies might be quite good, without the human foibles and drama. There is no rational reason to be anxious about SkyNet.

Jon Reisman is an economist and policy analyst who retired from the University of Maine at Machias after 38 years. He resides on Cathance Lake in Cooper, where he is a Statler and Waldorf intern. Mr. Reisman’s views are his own, and he welcomes comments as letters to the editor here or to him directly via email at [email protected].