Paul Craig Roberts reviews “The Artificial Intelligence Contagion”

Many thanks to Paul Craig Roberts for this review (https://www.paulcraigroberts.org/2019/05/07/are-you-ready-for-a-worse-dystopia-than-1984/):

Are You Ready for a Worse Dystopia than 1984?

Paul Craig Roberts

May 7, 2019

I have been lonely in my concern with the dire economic implications of robotics, but now Clarity Press has provided me with some company by publishing The Artificial Intelligence Contagion by David Barnhizer and Daniel Barnhizer.  It is telling as to the irrelevance of the economics profession that the coauthors are lawyers. 

The concerns about robots and artificial intelligence have come from scientists who express worries about killer robots with super intelligence taking over from dumber humans with less capabilities. Possibly, but it is more likely that these kind of concerns stem from an incorrect model or understanding of mind, consciousness, and creativity.  I do wish that Michael Polanyi were still with us to give us his take on our proclivity to attribute intelligence to machines.

The coauthors briefly mention these threats as well as the very real and already present  threats from governments armed with the intrusive surveillance and control that the digital revolution and artificial intelligence make possible.  Warnings from Stephen Hawking, Nick Bostrom, and Elon Musk of an immortal godlike superintelligence, amoral at best and immoral at worse, that will determine our fate are speculative, but the adverse economic impact of robotics are already upon us. Thus, the main focus  of the coauthors is on the massive economic dislocation that will result from making people superfluous. 

Recently, I read about a smart machine that displaces warehouse workers and also the workers at the plants that make the mechanical forklift machines that warehouse workers use to move and stack the crates and boxes. As the smart machines themselves are made by robots, the forklift production workers are also displaced.

According to the latest job report, there are 1,192,000 people employed in warehouses. Unlike the forklift, the new smart machine does not contribute to increasing the productivity of labor. Instead the smart machine displaces labor by eliminating the need for people to do the work.  Every dollar that would have been paid in wages goes instead into the profits of the warehouse owners. This is the great difference between earlier innovations that increased human productivity and living standards and the AI robotic innovation that eliminates the need for humans and makes them redundant. 

Robotics will not be implemented everywhere all at once. it will come upon us in stages. The 1.2 million displaced warehouse workers will look for other jobs. The lucky few will find one. The rest will join the unemployment ranks until they become discouraged and are dropped out of the unemployment measure.  State, local, and federal tax revenues will decline as a result of the lost jobs. But unemployment compensation and other social welfare benefits will rise. With constrained or nonexistent incomes, 1.2 million people will have less participation in the retail market. Car sales, home sales, restaurant, clothing, and entertainment sales all decline. The Social Security and Medicare payroll tax revenues decline by the earnings of 1.2 million Americans as do pension contributions. Social Security and Medicare are funded by the current work force paying for the retired work force.  As robotics eliminates the current work force, payroll tax revenues collapse.  

For an unknown period of time, as the US dollar is the world reserve currency, the federal government can print money to fill in the gap in the difference between Social Security and Medicare benefits and payroll revenues.  But large parts of the world (Russia and China) have already been driven away by sanctions from using the US dollar, and this means that the dollar will lose its reserve currency role.  Then what do we do when there are untold millions of Americans expecting Social Security pensions and medical care and there is no work force to pay the payroll tax?

These kind of questions, and there are many more, should be the primary focus of every economist, not that it would do much good as neoliberal economists are indoctrinated beings incapable of thought.  Nevertheless, that there is no concern among economists shows their irrelevance and uselessness.

Many years ago I pointed out that under present law and practice, the entirety of the GDP would flow to the handful of owners of the robotic and AI patents.  There would be no income for anyone else.  Such a situation is not possible, because it would mean that the patents would produce no income for the owners as no one would have jobs and incomes with which to purchase the products of robots and artificial intelligence.  The obvious dilemma I described received no response.

One way of looking at our dilemma is that we need artificial intelligence because those bringing us the AI revolution have no intelligence themselves.  How intelligent is it to make humans useless? How intelligent is it to have robotic production lines when no humans have incomes from jobs with which to purchase the output of robots?  

Well, you might say, we will make the owners of the robots pay the payroll taxes from their sales revenues. We will guarantee sales by socializing the patents and sending everyone a check for their share of the GDP.  And so on.  

But why?  Why eliminate the need for human labor when no gain can accrue to the elite as there would be no consumer market for their products? The cost savings from robotics and artificial intelligence are meaningless when there are no consumers at the other end. When the patents have to be socialized in order to support a population displaced by robotics, what is the point of the robotics?

The coauthors of Contagion, and that is what artificial intelligence is, understand that humans with their limited awareness and intelligence have found intellectual interests in developing the means for their own self destruction.  Nuclear weapons, for example, are an insane accomplishment of mindless idiots, because they can not enter general use without destroying all life on the planet.  A doomsday weapon is a pointless weapon.

The same for robotics and artificial intelligence.  What is the purpose of producing threats to humans from police states and by taking away all purposes for human  existence?  This is a mindless act.  Those responsible for it are the worst criminals the world has ever known.  Yet these destroyers of humanity bask in public approval for all the benefits they are bringing to mankind.

Read The Artificial Intelligence Contagion and then tell me about the benefits.

Paul Craig Roberts has had careers in scholarship and academia, journalism, public service, and business. He is chairman of The Institute for Political Economy.

Dr. Roberts was awarded the Treasury Department’s Meritorious Service Award for “his outstanding contributions to the formulation of United States economic policy.”

In 1987 the French government recognized him as “the artisan of a renewal in economic science and policy after half a century of state interventionism” and inducted him into the Legion of Honor.

Dr. Roberts has held academic appointments at Virginia Tech, Tulane University, University of New Mexico, Stanford University where he was Senior Research Fellow in the Hoover Institution, George Mason University where he had a joint appointment as professor of economics and professor of business administration, and Georgetown University where he held the William E. Simon Chair in Political Economy in the Center for Strategic and International Studies.

He has contributed chapters to numerous books and has published many articles in journals of scholarship, including the Journal of Political Economy, Oxford Economic Papers, Journal of Law and Economics, Studies in Banking and Finance, Journal of Monetary Economics, Public Choice, Classica et Mediaevalia, Ethics, Slavic Review, Soviet Studies, Cardoza Law Review, Rivista de Political Economica, and Zeitschrift fur Wirtschafspolitik. He has entries in the McGraw-Hill Encyclopedia of Economics and the New Palgrave Dictionary of Money and Finance.

He has contributed to Commentary, The Public Interest, The National Interest, Policy Review, National Review, The Independent Review, Harper’s, the New York Times, The Washington Post, The Los Angeles Times, Fortune, London Times, The Financial Times, TLS, The Spectator, The International Economy, Il Sole 24 Ore, Le Figaro, Liberation, and the Nihon Keizai Shimbun. He has testified before committees of Congress on 30 occasions.

Dr. Roberts was associate editor and columnist for The Wall Street Journal and columnist for Business Week and the Scripps Howard News Service. He was a nationally syndicated columnist for Creators Syndicate in Los Angeles. In 1992 he received the Warren Brookes Award for Excellence in Journalism. In 1993 the Forbes Media Guide ranked him as one of the top seven journalists in the United States.

President Reagan appointed Dr. Roberts Assistant Secretary of the Treasury for Economic Policy and he was confirmed in office by the U.S. Senate. From 1975 to 1978, Dr. Roberts served on the congressional staff where he drafted the Kemp-Roth bill and played a leading role in developing bipartisan support for a supply-side economic policy. After leaving the Treasury, he served as a consultant to the U.S. Department of Defense and the U.S. Department of Commerce.

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