Six-Chart Sunday – Rage Against the Machine

6 Infographics + 1 Video (Barry Ritholtz explains “How NOT to Invest”)

This Substack aims for the “sensible center,” a pretty lonely place when it comes to discussions about politics, economics, culture… or AI. Optimists proclaim AI is "most important discovery in human history" (Larry Ellison), “more profound than electricity or fire” (Sundar Pichai), an innovation that “will save the world” (Marc Andreessen) with a future “so bright that no one can do it justice by trying to write about it now” (Sam Altman). Pessimists assess a “10%-20% chance AI wipe[s] out humanity” (Geoffrey Hinton), fearing “the danger of AI is much greater than the danger of nuclear warheads by a lot” (Elon Musk), and even “the end of human history.” (Yuval Noah Harari).

Warnings of mass job loss and technological unemployment are particularly prominent right now, with the Anthropic CEO warning “AI could eliminate half of all entry-level white-collar jobs” within 5 years. Of course people have always feared new technologies’ impact on jobs and society. With AI, they say, “this time is different.” Is it?

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1. It's the end of the world as we know it, and I feel… scared? You can’t spell panic without an A & I (also mania, billionaire & migraine). AI doom predictions make great copy & headlines, and the media is a business fighting for share in the attention economy.

2. There’s nothing new or AI-specific about panic over “technological unemployment.” Albert Einstein saw “man made machines” as a significant cause of the Great Depression, as did John Maynard Keynes. Mahatma Gandhi feared the impact on his massive and poor population, while Karl Marx saw automation as a tool advantaging capital over labor (his go-to criticism… he was my least favorite Marx brother… he’d have objected to the wheel).

3. I like Ike. While his successor (JFK) saw “automation” as “the major domestic challenge of the Sixties,” President Eisenhower was more confident, noting how “similar fears have plagued workers for 150 years and always proved groundless… as the nation finds ways to do more work with fewer man-hours there always springs up more work to do.”

4. Americans today are more pessimistic about AI than people in most other countries. The great Noah Smith (best value-for-subscription $ on Substack) offered multiple theories why here, though I wonder whether it’s not simply because (a) AI has taken off first and fastest here and (b) “negativity sells newspapers,” with the flood of doomer stories shaping public perceptions.

5. AI negativity is greater among the general public than AI experts. Hopefully this is because experts see things the rest of us don’t yet appreciate. This could also reflect “experts” with vested economic interest in the upside cheer-leading. Or perhaps it’s our populist times, with a public reflexively distrustful of experts, institutions and technology companies.

6. Chinese citizens are the most optimistic in the world about AI leading to new job creation. Globally, citizens are slightly net pessimistic about AI + jobs.

SO WHAT? It’s also possible that AI is neither bigger than fire + the industrial revolution nor an extinction-level event for humanity, but rather a very important advance with profound but ultimately gradual (and thus manageable) impacts… see “AI as Normal Technology.” If nothing else, we can expect many more great magazine covers warning of doom, increasingly created with or by AI, at least until our machine overlords outlaw magazines.

VIDEO

Barry Ritholtz is co-founder, chairman & CEO of Ritholtz Wealth Management… host of the Masters in Business podcast… called the “blogfather” for his long-standing finance weblog, The Big Picture, that reaches over half a million readers. He joined me last week to discuss his great new book, “How NOT to Invest.”

Cover image created via ChatGPT: