Paul Craig Roberts reviews “The Artificial Intelligence Contagion”

Many thanks to Paul Craig Roberts for this review (

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.

We Must Create Strategies to Protect Human Workers as an “Endangered Species”

Barnhizer the Elder: Our “bottom line” in The Artificial Intelligence Contagion is simple.  If we do not get a handle on the processes of change and make strong, fast and accurate decisions that at least slow or shape the transformation, then Western society as we know it is going to collapse. [BTY – or change irretrievably into a culture that will not support Western ideals such as democracy and the Rule of Law]. A mix of aggressive public and private initiatives are required to respond to the significant and growing challenges of AI/robotics.

We are experiencing quantum leaps in AI/robotics capabilities, including surveillance, military and weapons technologies, autonomous self-driving vehicles, massive job elimination, data management and privacy invasion, medical breakthroughs and even human augmentation through such things as implants, “add-ons” and the merging of people with AI and robotics. Science fiction has already become fact and the AI/robotic evolutionary process is accelerating beyond anyone’s control.  As this occurs it is transforming us as individuals, and our societies as collective entities. These changes are undermining democratic cultures and destroying jobs in extremely large numbers.  According to intellectual and business leaders such as Stephen Hawking, Bill Gates, Yuval Noah Harari, Nick Bostrom, Max Tegmark, Elon Musk and others, the rise of Artificial Intelligence accompanied by robotic systems could ultimately end up with the destruction of the human race.  Long before this happens, however, our cultures, societies, selves and political relationships will be altered profoundly in ways we are not prepared to adequately understand or cope.

There have been three major industrial revolutions before what some are now referring to as the Fourth Industrial Revolution being driven by AI/robotics. The first of the three revolutions harnessed steam power. The second was based on electricity. The third industrial revolution developed through electronics, computing power, and the Internet. In each of these previous industrial revolutions, the process took place relatively slowly compared to what we are now experiencing with the linking of Artificial Intelligence systems and robotics controlled and directed by AI. The first three industrial revolutions generated what was described by Austrian economist Joseph Schumpeter as “creative destruction” in which although significant economic and social turmoil occurred as the transformation unfolded, the eventual outcome was increased productivity, jobs, and wealth. Destroyed jobs were replaced by needs in other areas, often utilizing skill sets similar to those required in the lost jobs. 

With AI/robotics—the Fourth Industrial Revolution—destroyed employment is less likely to be replaced by new forms of work in sufficient numbers. In a 2013 study of the massive impacts of computerization on human jobs, The Future of Employment: How Susceptible are Jobs to Computerisation?Oxford economists Carl Frey and Michael Osborne indicate that the AI/robotics shift is not like others we have experienced.  Unlike other economic transformations, there won’t be a significant employment recovery on the other side of the downturn.  They highlight this fact by observing: “This raises questions about: (a) the ability of human labour to win the race against technology by means of education; and (b) the potential extent of technological unemployment, as an increasing pace of technological progress will cause higher job turnover, resulting in a higher natural rate of unemployment.” [i]

The 2013 study by Frey and Osborne put probable US job loss by 2030 at 47 percent. No society is equipped to deal with such an economic nightmare.  This is particularly so in extraordinarily complex systems such as in the US and EU. Such systems have expensive subsidy and safety net obligations that cannot be met if predictions of job loss are anywhere close to being correct. The only rational answer is to develop policies and programs that prevent or at least mitigate the impending collapse of human employment.

Like Frey and Osborne, Howard Schneider concludes that what is occurring with AI/robotics is different from past economic revolutions. [ii]  In that regard, he asks: “has the nation’s ability to generate well-paying jobs in manufacturing and other sectors been fundamentally scarred by changes in the global economy that may predate the 2008-2009 economic crisis but were more starkly revealed in its aftermath?”[iii]

Schneider then goes on to indicate that, as observed by an Atlanta Federal Reserve Bank President, we are facing something outside human experience.  The result of what is now occurring could be “a workforce based on large numbers of lower paid workers, with a few highly paid managers, professional and technology workers, and a permanent hollowing out of the middle class.[iv]There are numerous signs this radical transformation of work is real and accelerating.  The feared hollowing out of the middle class with former members of that socioeconomic niche sliding downward continues apace. Rolls Royce is cutting 4,000 middle management employees in addition to another 600 senior management workers cut loose only months ago.[v]  Citi Bank just announced that it was considering eliminating 10,000 “tech and ops” staff due to developments in AI and robots. Deutsche Bank already warned that half of its 90,000 employees could lose their jobs due to AI.[vi]  General Motors is following the same path and Ford just announced in May 2019 that it was cutting 7,000 jobs, 10% of its global managerial workforce.  

Tesla just announced it will cut 9% of its 40,000 worker staff and that those losing their jobs will be in salaried and management positions, not production.[vii]  China is in the process of eliminating 1.8 million jobs in its steel industry, shifting a significant part of its production activities to AI/robotics systems, and roboticizing significant parts of its higher tech production industries, cutting 40 to 50% of the workers in those sectors.  This pattern continues in many large companies.  Given that many production line workers have already been cut loose as companies adopt AI/robotics manufacturing systems, continuing improvements in AI systems have allowed manufacturing and service companies to eliminate substantial numbers of middle managers. The normally optimistic Jack Ma, the CEO of the Chinese technological giant Alibaba, recently stated that Artificial Intelligence will cause people more pain over the coming decades rather than bringing them happiness and a feeling of social and economic security.  Ma warns: “Social conflicts in the next three decades will have an impact on all sorts of industries and walks of life. … Ma adds: “A key social conflict will be the rise of artificial intelligence and longer life expectancy, which will lead to an aging workforce fighting for fewer jobs.”[viii]

[i]  Carl Benedikt Frey and Michael A. Osborne, “The Future of Employment: How Susceptible Are Jobs to Computerisation?” 9/13/13.   

[ii] Joel Kotkin, “Today’s Tech Oligarchs Are Worse Than the Robber Barons”, 8/11/16. 

[iii]  Howard Schneider, “For largest U.S. companies, jobs growth has lagged profits, revenues”, Business News, 8/11/14.  

[iv]Schneider, “For largest U.S. companies, jobs growth has lagged profits, revenues”, Business News, id.  

[v]  “Rolls-Royce set to announce more than 4,000 job cuts: Aero-engine maker attempts to increase profits by losing middle-management posts”, Simon Goodley, 6/10/18.

[vi]  “10,000 jobs could be lost to robots says Citi”,6/12/18.  “US bank Citi has warned that it could shed half of its 20,000 tech and ops staff in the next five years due to the rise of robotics and automation.”

[vii] “Tesla to cut 9% of staff as Elon Musk’s electric car company seeks profitability: CEO says thousands of job losses are part of a ‘difficult, but necessary’ restructuring.”  Julie Carrie Wong, 6/12/18.

[viii]  “Alibaba founder Jack Ma: AI will cause people ‘more pain than happiness’:”, Olivia Solon, 4/24/17.

On the impossibility of time travel as a tool for understanding humans and AI.

While the possibility of time travel can be explored mathematically (and the maths are actually pretty cool — E.g., “Do Tachyons Exist?” — I tend to prefer an argument based in the human condition. Basically, if meaningful time travel backwards is ever possible in the future, then at some point in the future some person will use it to destroy the world in the past. Since we still exist, meaningful time travel backwards is not possible.

The point of this argument is not actually to show the impossibility of time travel, but rather to illustrate the heterogeneous nature of human beings. This is the technological progress version of Rule 34 (if something exists then there is porn about it; if there is no porn about it, there will be soon): If something can be done technologically, then someone, somewhere is going to try to do it.

The implications of this for AI are fascinating and chilling. In the short and medium term, AI and similar technologies have incredible potential for improving human productivity and well being. But we are already seeing the seeds of the long term – China’s social credit ranking system, for example, demonstrates the potential for AI and Big Data tools to create an Orwellian system of autocratic political, economic, and social control. There will always be a human being out there somewhere who, if given the technological tools, will use those tools to exploit and oppress others.

What is the Artificial Intelligence Contagion?

Welcome to Artificial Intelligence Contagion, the blog of Professor Emeritus David Barnhizer (“Barnhizer the Elder” or “BTE”) and Professor Daniel Barnhizer (“Barnhizer the Younger” or “BTY”). This blog continues the exploration we begin in our book, “The Artificial Intelligence Contagion: Can Democracy Withstand the Imminent Transformation of Work, Wealth and the Social Order?