The remarkable success of ChatGPT and other generative A.I. has inflamed the already roiling debate about how the rise of machines will affect workers, and ultimately shape our societies. Doomers predict that robots will replace people and, perhaps, even destroy the human civilization. Optimists argue that, after the inevitable growth pangs, new intelligent machines will make our life better. After all, humanity has successfully digested previous technological revolutions without particularly dire consequences.
But learning from history is not a straightforward matter. The A.I. revolution will impose new and unanticipated stresses on our society. A key dimension missing in the current debate is the role of social power, which determines not only the winners and losers of such technological shifts, but also how much social and political disruption will come in the wake of a technological shift.
An extreme illustration of this principle is the fate of one special class of workers, the horse. As the Nobel Prize-winning economist Wassily Leontief pointed out forty years ago, between 1900 and 1960 the equine population in the U.S. collapsed from 21 million to only 3 million.[i] The culprit was the internal combustion engine, which enabled the automobiles and tractors to replace horses in transportation and agriculture.
The horse is a physically powerful animal, but its social power is zero. Horses’ life and death are entirely under control of humans. As a result, the technological shift brought about by the internal combustion engine resulted in, essentially, horse genocide. But at the societal level, the demise of the workhorse caused hardly a ripple—no horses rebelled on the way to the glue factory.
What about humans? Consider the “workhorse” of the industrial era—men without college degrees. They fared better than horses, but worse than other segments of the population. The proportion of American men aged 25-54 in the labor force has declined by nearly 10 percent from its peak in the late 1960s.[ii]
Real wages of men without college degree have stagnated since the late 1970s. More recently, life expectancy of men without college degrees has decreased.[iii]
Of course, technological change was only partially responsible for this disturbing development. I am making a larger point here—about the key role of social power. Recent research by economists provides strong evidence that declining worker power has been a more important factor in depressing their wages than the interplay of labor supply and demand.[iv] The erosion of collective bargaining rights, weaker labor standards, and new employer-imposed contract terms together account for the bulk of the divergence between productivity and median hourly compensation growth.[v] There is a growing consensus among economists that unequal power has played the most important role in suppressing pay increases for non-elite workers since the 1970s.[vi]
An important dimension in the declining social power of American workers is the evolution of the Democratic Party, which was a party of the worker class during the New Deal, but by 2000 became the party of the credentialed “ten percent”.[vii] The rival party, Republicans, primarily served the wealthy 1%. The 90% were left out in the cold. Amory Gethin, Clara Martínez-Toledano, and Thomas Piketty studied hundreds of elections and found that political parties in other western democracies also increasingly cater to only the well educated and the rich.[viii]
Workers didn’t accept their immiseration meekly. There are many signs of growing popular discontent. But history teaches us that revolutions are not made by the “masses.” Popular immiseration and resulting discontent needs to be channeled against the governing regime, and this requires organization by breakaway elites, so-called “counter-elites”.[ix] Without such leaders and organization, non-elite workers have been reduced to voting for populist, anti-systemic politicians, like Donald Trump.
So much for history. What about the future? The rise of intelligent machines will undermine social stability in a far greater way, than previous technological shifts, because now A.I. threatens elite workers—those with advanced degrees. But highly educated people tend to acquire skills and social connections that enable them to organize effectively and challenge the existing power structures. Overproduction of youth with advanced degrees has been the main force driving revolutions from the Springtime of Nations in 1848 to the Arab Spring of 2011.[x]
The A.I. revolution will affect many professions requiring a college degree, or higher. But the most dangerous threat to social stability in the U.S. are recent graduates with law degrees. In fact, a disproportionate share of revolutionary leaders worldwide were lawyers—Robespierre, Lenin, Castro—as well as Lincoln and Gandhi. In America, if you are not one of super-wealthy, the surest route to political office is the law degree. Yet America already overproduces lawyers. In 1970 there were 1.5 lawyers per 1000 population; by 2010 this number had increased to 4.[xi]
Too many lawyers competing for too few jobs didn’t depress all lawyer salaries uniformly. Instead, competition created two distinct classes: winners and losers. The distribution of starting salaries obtained by law school graduates has two peaks: the right one around $190k with about a quarter of reported salaries, and the left one around $60k with about half salaries, and almost no salaries in between.[xii] This “bimodal” distribution evolved from the usual (“unimodal”) one in just one decade, between 1990 and 2000. Here’s what it looked like by 2010:
What this development means is that those in the right peak have succeeded in getting into the pipeline to elite status. Most of those in the left bulge, on the other hand, will become failed elite aspirants, especially considering that many of them are crushed by $160k or more of debt they incurred to pay for law school.[xiii]
If the outlook for most people holding new law degrees looks dire today, the development of new A.I. will make it much worse. A recent Goldman Sachs report[xiv] estimates that 44% of legal work can be automated—lawyers will be the second worst-hit profession, after Office and Administrative Support. If market forces are allowed to have their way, we will create a perfect breeding ground for radical and revolutionary groups, feeding off the vast army of intelligent, ambitious, skilled young people with no employment prospects, who have nothing to lose but their crushing student loans. Many societies in the past got into this predicament. The usual outcome is a revolution or a civil war, or both.[xv]
Unless the worst fears of the doomers are realized, in the long run, undoubtedly, we will learn how to race with smart machines, rather than against them.[xvi] But in the short-medium term (say, a decade), the generative A.I. will deliver a huge destabilizing shock to our social systems. Since we can foresee the effect of ChatGPT and its ilk on potentially creating large numbers of counter-elites, in principle, we can figure out how to manage it. The problem is that I have no confidence that our current polarized, gridlocked political system is capable of adopting the policy measures needed to defuse the tensions brought about by elite overproduction and popular immiseration. I hope I am wrong; but if not, prepare for a rough ride.
[i] Brynjolfsson, E. and A. McAfee (2015). Will Humans Go the Way of Horses? Foreign Affairs. New York, Council on Foreign Relations NY. 94: 8-14.
[iii] Case, A. and A. Deaton (2020). Deaths of Despair and the Future of Capitalism, Princeton University Press.
[iv] Stansbury, Anna and Lawrence Summers. “Declining Worker Power and American Economic Performance,” Brookings Papers on Economic Activity, March 19, 2020, https://www.brookings.edu/wp-content/uploads/2020/03/stansbury-summers-conference-draft.pdf.
[v] Mishel, Lawrence and Josh Bivens, “Identifying the policy levers generating wage suppression and wage inequality,” Economic Policy Institute, May 13, 2021, https://www.epi.org/unequalpower/publications/wage-suppression-inequality/.
[vi] Noam Scheiber, “Middle-Class Pay Lost Pace. Is Washington to Blame?” New York Times, May 13, 2021, https://www.nytimes.com/2021/05/13/business/economy/middle-class-pay.html.
[vii] Frank, T. (2016). Listen, Liberal: Or, What Ever Happened to the Party of the People? New York, Picador.
[viii] Amory Gethin, Clara Martínez-Toledano and Thomas Piketty, “How politics became a contest dominated by two kinds of elite,” The Guardian, August 5, 2021, https://www.theguardian.com/commentisfree/2021/aug/05/around-the-world-the-disadvantaged-have-been-left-behind-by-politicians-of-all-hues.
[ix] Turchin, P. (2016). Ages of Discord: A Structural-Demographic Analysis of American History. Chaplin, CT, Beresta Books.
[x] Goldstone, J. A. (1991). Revolution and Rebellion in the Early Modern World. Berkeley, CA, University of California Press.
[xi] Ages of Discord, Figure 4.5.
[xii] Data for 2020 from National Association for Law Placement, NALP.
[xvi] Brynjolfsson, E. and A. McAfee (2016). The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies. New York, WW Norton.