Daron Acemoglu: evaluation

Transcript context

…What are we worried about? Even the labor share, if you adjust for equity compensation, it’s gone from 62 to 60. That might be modestly unfortunate, but it’s hardly a tragedy from 62 to 60. Hold onto that thought because it’s a great question, Tyler, but I want to come back to the first part of your earlier question because that’s very important. What’s my view of automation? How should we view it? Let me first tell you my view and then we can talk about whether it’s justified or not. I am not, 100 percent not, against automation. Automation has been ongoing since at least the beginning of the Industrial Revolution. It enables us not to do some of the harder, more manual, more routine, more back-breaking tasks. That’s fantastic. If the only type of technological change out of that many diverse types of technologies, if the only thing that we do is automation, then that’s not going to be a firm basis for shared prosperity. When you talk about the US economy has high wages—for example, wage growth was very high in the ’40s, ’50s, ’60s, ’70s—that’s not, in my mind, just because of automation. Automation was a contributing factor, but more because of other kinds of technologies that created new opportunities, new tasks where workers that were displaced from the more mundane things could go, so that combination. What I am really worried about in the age of AI, and robots’ entry into the manufacturing sector illustrates this very well, if you prioritize automation and don’t do enough of the new task creation, new opportunity creation for labor, that’s when the labor share decline is going to become more severe, and the wage growth is going to be not there, or in fact, it could be negative. The thing about automation is that you’re right, automation could increase the real wage, but it could even reduce it. Well, it could. How many cases are there, say since post-World War II—Western Europe, Japan, South Korea, United States—where automation has on the whole decreased real wages?…

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