Simon Johnson: belief

Transcript context

…If we look at wealth, if we look at the very wealthiest people in this country — Elon Musk, Mark Zuckerberg — it seems they’re much less wealthy than they were two or three years ago. More than cut in half. Maybe they’ve lost three-quarters of their wealth. If market returns are a random walk, that’s more or less our best forecast for the future. So, hasn’t this problem largely fixed itself in the last few years? Top wealth has really been cut down a lot. I’ve never been bothered by the top wealth, Tyler. It’s never been a major concern of mine. What bothers me more is lack of good wages, rising wages for people who haven’t completed college, let’s say, or didn’t go to college. I think it’s the stagnation of that since the 1970s, which was quite different, of course, from what happened for the 30 or 40 years before that. I think that’s unnecessary and we can do better, but it’s a very hard process to reverse. It’s not a new process, and it’s a process very rooted in the fact that in early Industrial Revolution, people like Henry Ford — when they brought in automation, they also created a lot of new tasks for workers that didn’t previously exist. Workers even without a lot of skill became much more productive. That productivity was shared with them through higher wages, through unions and other things. That whole mechanism has broken down more recently. I think with AI, there’s a lot of obviously huge discussion about all kinds of dimensions, but the piece that we really focus on and are concerned about is that more workers may be displaced from previously well-paying jobs, and without creating new tasks. Therefore, worker productivity doesn’t go up. You may pay some people — maybe the designers of AI algorithms — more money, but most people may well be paid less in real terms. You’ve probably seen estimates that ChatGPT is the most rapidly adopted computer application in all of human history compared to any technology. Now, if that’s the case, why is it that Open AI has only a market valuation of about $30 billion? Which is high, but it’s not close to Apple. In a way, it’s remarkably low. Doesn’t that suggest most of the gains from AI will go to other parties and not to the people who own and design the algorithms?…

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