Luke Drago: recommendation

Transcript context

…Yeah, so the resource curse is not guaranteed doom. It's a curse, but it's breakable. And there are, of course, great examples of countries that did break it. The obvious one here is Norway. Norway is a state that has a sovereign wealth fund. It is fueled by oil revenues. It does have a real economy on top of that. And I think one of the things to be careful in this comparison is that, of course, oil is not a one-to-one replacement from all human labor. It's a very tempting investment target if you already have a lot of it. You still need humans somewhere in the chain, and you can get a more diverse economy. More diverse economies tend to win than these oil states in like direct comparisons, but it's a very tempting curse. But what happens in Norway? Norway is, you know, by many, many metrics, one of the best countries in the world to live in. Excellent education, excellent social services, really stable government, really democratic government. How does this happen? Well, we use some of the quotes. from officials at the time. And we looked at some of the case studies in the paper. But a core thing here is Norway had extremely resilient institutions before the resource curse was possible. Before they discovered oil, they had an excellent civil service that was really good at understanding what to do when this happened and a very low corruption society. The question for me is, do we think we currently live in a world with excellent institutions and exceptionally low corruption? I don't think so. I think basically every American that has looked at our government has said something here is fundamentally broken. And it's been that way for decades. And it seems like every time we think we get a reformer in, what we get is increasing brokenness. I don't think we're at the case right now where we have selfless members of Congress and extremely resilient institutions. And I think what it's going to take to withstand the pressures if you actually get total automation is stronger. It's more resilience than you would need to withstand the kind of oil pressures here. Of course, another thing going from Norway is that there is still room for a dynamic human economy on top of that. And so you can reinvest that money. Saudi Arabia is a great example of this, where as Saudi Arabian officials have become increasingly concerned that we are near peak oil and that renewable energy is going to be increasingly the way of the future, they are trying to invest their into creating a more sustainable and not like uppercase S environmentally sustainable, just like a more dynamic economy that attracts large businesses. Dubai's in this as well. Now, of course, important question here, while the economics are now starting to move towards democratizing, you'll notice that these states I'm mentioning here that are sometimes cited for high quality of life for some people, Saudi and the UAE, have high quality of life for certain kinds of people. tizing, you'll notice that these states I'm mentioning here that are sometimes cited for high quality of life for some people, Saudi and the UAE, have high quality of life for certain kinds of people. for people that are economically important to the state. But of course, they also rely on an underclass. And in Saudi's case, I wouldn't say it's the beacon of gender equality in the world. For half the population, I wouldn't say those freedoms are well afforded. Now, as it has been the case that Saudi Arabia in particular, I want to zone in on them, has moved towards this more diverse economy, they've also concurrently started liberalizing their gender relations. I mean, you've seen under MBS, there's been, I'm not going to call it heaven or anything, but there's been a real effort to somewhat liberalize this relationship in an otherwise pretty conservative society. It is not on accident that these things are happening concurrently. And I think one of the things you should be wary of is arguments that we're going to centralize all power in the hands of a couple of actors. We're going to automate the entire economy, but the incentives are going to exist for the state to really care about you. The examples that we have of states where this is true is Norway. In other states, if you're not economically useful, it's a bit harder of a sell. It's not always true. There are exceptions. We talk about this case study in Amman, where like there was a credible threat of revolution, and this helps, you know, this helps force. the state to dole out its rents. The argument is that like rent seekers would like, or the rentiers would like to have all of the rents, but they also really want to remain in power and continue to get some rent. And so if it's cheaper for them to capitulate than to lose, well, then that's an easy out for them. But of course, when we're talking about AI that can automate every job, we're also talking about the automation of repression and increasing surveillance. As we make things more legible, it's easier for governments to trend towards this despotic realm where they can also put down dissent and prevent these kinds of forces that would otherwise force states to capitulate. So increasingly, by increasing the state's ability to such a dramatic degree, you have this moment where states are very weak, and then once they're able to automate repression, they're suddenly very strong. In both outcomes, you risk losing the ability for democratic processes to work. Do you think we'll be able to shape the future economy using our culture, using our values? Or do you think that what matters most in the end is the underlying features of AI as a technology and the economic incentives that it causes?…

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