Original author: Chen Qinhan, reporter of The Paper
On October 14, local time, the Royal Swedish Academy of Sciences announced that the 2024 Nobel Prize in Economics will be awarded to Daron Acemoglu, Simon Johnson and James A. Robinson, in recognition of their "research on how institutions are formed and their impact on prosperity".
The jury said in the press release that these three economists have shown the importance of social institutions to a country's prosperity. "Societies without the rule of law and institutions that exploit the population cannot generate growth or bring about positive change, and their research has helped us understand the reasons."
Acemoglu was born in 1967 in Istanbul, the capital of TRON, and has been teaching at the Massachusetts Institute of Technology since 1993. He received the Clark Award in 2005 and his research covers a wide range of fields including political economy, economic development, economic growth, technological change, inequality, labor economics and network economics. He has co-authored numerous papers with the other two economists who are co-recipients of this award, and has co-authored bestsellers such as "Why Nations Fail" and "The Narrow Corridor" with Robinson.
In recent years, one of Acemoglu's research focuses has been the impact of industrial robots and other automation technologies on the labor market. In 2023, he co-authored a book with Simon Johnson titled "Power and Progress" which discusses the dilemmas facing AI as the most important technology of the current era.
"Much of my research has focused on the interaction between political economy and technological change, which are the two great forces shaping our capabilities and growth opportunities, while also shaping our political and economic choices," Acemoglu said in an interview with The Paper in June this year.
His research has found that the current trajectory of AI development is repeating and exacerbating some of the worst technological mistakes of the past few decades. For example, over-emphasizing automation without sufficient investment in creating new tasks. He believes that corporate leaders need to recognize that their greatest asset is their workers, and instead of focusing on cost-cutting, they should find ways to increase the productivity, capabilities and influence of their workers.
Acemoglu is very concerned that AI is becoming a way to transfer wealth and power from ordinary people to a small group of tech entrepreneurs. To break the political power of large tech companies, he believes that "relying solely on antitrust is not enough, we need to redirect technology to be more beneficial to society".
He proposes three principles to guide the development of AI: prioritizing the usefulness of machines, empowering workers and citizens rather than trying to manipulate them, and introducing a better regulatory framework to hold tech companies accountable.
*The following is an interview article with Acemoglu published by The Paper on June 16, 2024, with the original title Interview | MIT Professor: Concerned that AI is becoming a tool to transfer wealth and power to a small group of tech entrepreneurs.
According to Reference News on June 15, citing a report from CNN, Apple surpassed Microsoft on June 13 to become the highest-valued publicly traded company in the US. Last week, the company announced a series of news including generative AI features for the iPhone at its annual Worldwide Developers Conference, causing its stock price to soar.
Apple, NVIDIA, and Microsoft have been fiercely competing for the title of the world's most valuable company. After redefining "AI" as "Apple Intelligence", Apple's market capitalization surpassed that of NVIDIA, which had skyrocketed due to AI chips, and then overtook Microsoft, regaining the top spot. Apple's current market value is $3.29 trillion, slightly higher than Microsoft's $3.28 trillion. Generative AI has become the core driver behind the surge in the market values of the three tech giants.
Faced with this AI frenzy, the National Bureau of Economic Research recently published a paper written by MIT professor Daron Acemoglu, which points out that the productivity gains from future AI progress may not be as large as expected, estimating that the upper limit of AI's contribution to total factor productivity (TFP) growth over the next decade will not exceed 0.66%.
Acemoglu argues in the paper that generative AI is a promising technology, but unless the industry undergoes a fundamental rethinking, including major changes to the architecture of generative AI models (such as large language models, LLMs) to focus on reliable information and improve the marginal productivity of workers in various industries, rather than prioritizing the development of general, human-like conversational tools.
Acemoglu, a Turkish-born American economist known for his research in political economy, has long been concerned about the interaction between political economy and technological change.
Last year, he co-authored a new book with British-American economist Simon Johnson titled "Power and Progress", which discussed the AI revolution that could disrupt human society. They believe that the current trajectory of AI development has gone astray, and many algorithms are designed to replace humans as much as possible, "but the way to make technological progress is to make machines useful to humans, not to replace humans".
Mira Murati, Chief Technology Officer of Open AI, stated at an event in May that in developing general artificial intelligence (AGI), they not only focus on enhancing the functionality and usefulness of the models, but also on ensuring their safety and alignment with human values, so as to create an AGI that benefits humanity.
"As I delve deeper into the capabilities and development trajectory of AI, I am increasingly convinced that its current path is repeating and exacerbating some of the worst technological mistakes of the past few decades," Professor Acemoglu told The Paper (www.thepaper.cn) in a recent interview. He said that most of the leading players in the AI field are driven by unrealistic and dangerous dreams, such as achieving general artificial intelligence, "which is to place machines and algorithms above humans".
Some analysts view Acemoglu as a pessimist about AI. He responded to The Paper that as a social scientist, he is more concerned about some of the negative social impacts.
Acemoglu often collaborates with his wife, Professor Asu Ozdaglar, who is the head of the Department of Electrical Engineering and Computer Science at MIT. Although their fields are different, the couple's views on the development of AI are largely aligned, though Acemoglu admits that his views may be more pessimistic than his wife's.
As the commercialization of artificial intelligence intensifies, the AI large models are in fierce competition, but there is no doubt that tech giants like Open AI, Microsoft, Google, and NVIDIA have already seized the initiative in AI development. Acemoglu says he is very concerned that AI is becoming a way to transfer wealth and power from ordinary people to a small group of tech entrepreneurs, and the "inequality" we are seeing now is just the "canary in the coal mine".
Technology and Society: The Greatest Asset is People
Q1: Your research covers areas such as political economy, technological change, and inequality. In what context and under what circumstances did you start to focus on the role of technological development in inequality? What was your initial view on technological development, and how did it evolve into the current position that "the current trajectory of AI development is not beneficial to either the economy or democracy"?
Acemoglu:
Much of my research has focused on the interaction between political economy and technological change, which are the two great forces shaping our capabilities and growth opportunities, while also shaping our political and economic choices.
AI has already become the most important technology of this era, on the one hand because it has attracted a lot of attention and investment, and on the other hand because it has made some eye-catching progress, especially with the improvement of GPU performance. Another reason is the ubiquitous impact of AI. These factors have prompted me to conduct research in this field.
As I delve deeper into the capabilities and development direction of AI, I am increasingly convinced that its current development trajectory is repeating and exacerbating some of the worst technological mistakes of the past few decades - over-emphasis on automation, just as we prioritize automation and other digital technologies without sufficient investment in creating new tasks; and social platforms trying to profit from people's data and interests, and thus committing all the mistakes.
I am also particularly concerned about the fact that most of the leading players in the AI field are driven by unrealistic and dangerous dreams, namely the dream of achieving general artificial intelligence, which is to place machines and algorithms above humans, and is also often a way for these leading players to override others.
Q2: Advanced computer technology and the Internet have enabled many billionaires to achieve wealth transfer, and have made tech giants more powerful than ever before. Nevertheless, we still accept such technological innovations because they also have positive impacts. Technological changes have both advantages and disadvantages, and from a historical perspective, society has always found ways to adapt to new technologies. As a new wave of technological revolution sweeps in, why do you think the issue of inequality is particularly worrying?
Acemoglu:
When it comes to social platforms and artificial intelligence, I agree with the above statements, but the situation is different when it comes to the Internet, and I have a different opinion. I believe that the Internet has been misused in some ways, but I do not deny that the Internet is a very beneficial technology, playing a very important role in achieving human-to-human connectivity, providing information to people, and creating new services and platforms.
As for artificial intelligence, I am very concerned that it will become a way to transfer wealth and power from ordinary people to a small group of tech entrepreneurs. The problem is that we do not have any necessary control mechanisms to ensure that ordinary people benefit from AI, such as strong regulation, worker participation, civil society and democratic oversight. The "inequality" we see is the "canary in the coal mine", indicating that worse things are to come.
Q3: You pointed out that the inequality caused by automation is "the result of choices made by businesses and society in how to use technology". As the market power and influence of tech giants grow to the point of possibly getting out of control, what is the key to addressing this? If you were the CEO of a large tech company, how would you use AI to manage the company?
Acemoglu:
My advice to CEOs is to recognize that their greatest asset is their workers, rather than focusing on cost-cutting, they should look for ways to increase the productivity, capabilities and influence of their workers. This means using new technologies to create new tasks and develop new capabilities for workers.
Of course, automation is beneficial, and we will certainly apply more automation in the future, but this is not the only thing that can be done to improve productivity, and automation should not be the only thing that CEOs pursue and prioritize.
Q4: US antitrust enforcement officials have publicly expressed a range of concerns about artificial intelligence, and the US Department of Justice and Federal Trade Commission are said to have reached an agreement that paves the way for antitrust investigations into Microsoft, OpenAI and Nvidia. Will these antitrust actions against large tech companies truly increase market competition and prevent AI development from being dominated by a few companies?
Acemoglu:
Absolutely, antitrust is important, and the root of some of the problems in the tech industry is the lack of antitrust enforcement in the US. The big five tech companies have all established a firm monopoly position in their respective fields, because they have been able to acquire potential competitors without any regulation. In some cases, they have purchased and shut down technologies that could have competed with them, and we absolutely need antitrust to break the political power of large tech companies, which has become very strong over the past three decades.
But I also want to emphasize that antitrust alone is not enough, we need to redirect technology to be more beneficial to society. If we simply split Meta into Facebook, Instagram and WhatsApp, it would not be possible to (increase market competition and prevent AI development from being dominated by a few companies). In the field of AI, if we are concerned that AI technology is being used for manipulation, surveillance or other malicious purposes, antitrust alone will not be the solution, antitrust must be combined with a broader regulatory agenda.
Technology and People: How to Avoid Repeating the Same Mistakes
Q5: You have always emphasized "machine usefulness", that is, "trying to make machines more beneficial to humans". How do you think this goal can be achieved? What consequences will there be if this goal cannot be achieved?
Acemoglu:
This is related to the advice I gave to CEOs. What we want are machines that can expand human capabilities, and in the case of AI, there is a great possibility of achieving this. AI is an information technology, so we should consider what kind of AI tools can provide useful, context-dependent real-time information to human decision-makers, and how we can use AI tools to make humans better problem solvers and able to perform more complex tasks. This applies not only to creative workers, scholars or journalists, but also to blue-collar workers, electricians, plumbers, healthcare workers and all other occupations. Better access to information can drive more informed decision-making and the performance of higher-level tasks, and this is the essence of machine usefulness.
Q6: You suggest providing fair tax treatment for worker labor. Is it actually feasible to tax equipment and software the same way as human employees, or to reform the tax system to encourage employment rather than automation?
Acemoglu:
Yes, Simon Johnson and I have proposed in "Power and Progress" that a fairer tax system can be part of the solution. In the US, the marginal tax rate faced by businesses when hiring labor is over 30%. When they use computer equipment or other machinery to perform the same tasks, the rate is less than 5%, providing excessive incentives for automation while hindering employment and investment in training and human capital. Unifying the marginal tax rates on capital and labor to the same level is a reasonable policy idea.
Q7: You propose tax reforms to reward employment rather than automation. How would such reforms affect businesses' application and investment in automation technologies?
Acemoglu:
We must be careful in this regard not to dampen investment, especially in many countries that need rapid growth and need to inject new investment into areas like renewable energy and healthcare technology. But if we can encourage technology to develop in the right way, it will also benefit businesses. So my proposal is to eliminate the excessive incentives for automation, and hope to achieve this in a way that does not generally undermine business investment.
Q8: The rapid development of social platforms has brought some negative impacts, such as information bubbles and the spread of misinformation. How do you think we can avoid repeating the same mistakes as AI further develops?
Acemoglu:
There are three principles that can help avoid repeating the same mistakes: (1) prioritizing machine usefulness, as I have advocated; (2) empowering workers and citizens, rather than trying to manipulate them; (3) introducing a better regulatory framework to hold tech companies accountable.
Technology and Industry: Digital Advertising Tax Makes the Industry More Competitive
Q9: Tech expert Jaron Lanier has emphasized the issue of data ownership and control for Internet users. In terms of policy, how do you think personal data ownership and control should be better protected?
Acemoglu:
I believe this is an important direction. First, we will need more and more high-quality data, and the best way to produce this data is by rewarding people who create high-quality data, which a data market can achieve. Second, data is currently being plundered by tech companies, which is unfair and inefficient.
However, the key is that a data market is not like a fruit market, where my data can usually be highly substitutable for your data, so if tech companies can negotiate with individuals to buy their data, there will be a "race to the bottom", which would be very administratively costly. So I believe that a well-functioning data market requires some form of collective data ownership, which could be in the form of a data union or industry association, or other collective organization.
Q10: What do you think about introducing a digital advertising tax to limit the profitability of algorithmically-driven misinformation? What impact might such a tax policy have on the digital advertising industry and information dissemination?
Acemoglu:
I support a digital advertising tax because the business model based on digital advertising is highly manipulative, and it is synergistic with strategies that create emotional outrage, digital addiction, extreme envy, and information cocoons. They can also synergize with business models that exploit personal data, leading to mental health issues, social polarization, and a decline in democratic citizenship.
Worse, if we want to reorient the development of AI as I have suggested, we need to introduce new business models and new platforms, but the current business model based on digital advertising makes this impossible. You cannot start a new social media platform based on user subscriptions, you cannot replicate the success of Wikipedia, because you are opposed to companies that provide free services and have a large user base. So, I see the digital advertising tax as a way to make the tech industry more competitive: if the "low-level trick" of acquiring user data and profiting from digital advertising can be curbed, new business models and more diverse products will emerge.
Q11: Could you share some of the positive changes you believe future technological developments may bring, and how we should prepare for and drive these changes?
Acemoglu:
If we use AI correctly, we can improve the occupational skills of workers in all industries, and also improve the process of scientific discovery. I also believe there are ways to use AI democratically.
