🤖 A Quick Q&A with ... economist Michael Strain on AI

'I think the history of technological change supports optimism'

In a recent column, economist Michael Strain argues that the current debate about generative AI focuses disproportionately on the negative impacts it might unleash. “Advances in AI will cause disruption,” he writes in his piece, “What the AI Pessimists Are Missing.” “But creative destruction creates as well as destroys, and that process ultimately is beneficial. Often, the problems created by a new technology can also be solved by it.”

Since Strain works just down the hallway from me at AEI — where he is the director of Economic Policy Studies — I decided to take advantage of his proximity and ask him a few questions about that insightful column. By the way, Strain is the author of The American Dream Is Not Dead: (But Populism Could Kill It). Before joining AEI, he worked in the Center for Economic Studies at the US Census Bureau and in the macroeconomics research group at the Federal Reserve Bank of New York.

Pethokoukis: You argue the debate around AI focuses too much on disruption of risks. What do you think is driving the pessimistic narrative?

Strain: I think that technological innovation leads to creative destruction, and the things that technology creates are things that, by definition, don't currently exist. And the things that innovation destroys are things that do exist. And so we have a tendency, I think, to look around at our lives, and look around at the economy, and look around at the world, and think about, “Okay, what could AI replace that we're currently doing?” And it's much harder to think about, “Okay, what are all the things that AI technology will create that don't currently exist?” And I think that drives the tendency. I think it's a lack of imagination.

What are the limitations of economic forecasts that attempt to predict the impact of AI on productivity, growth, and jobs, given the difficulty of accounting for potential new tasks, technologies, and scientific discoveries enabled by AI?

I think these sorts of forecasting exercises can be very helpful and can discipline the way that we think about the impacts of these technologies in ways that can further our understanding of them. But they are necessarily limited, for the reasons that you describe. It's very hard to predict the future. And, at this point, we are within the first two years of this new technology and we know very little about how it's going to impact the tasks that workers are currently doing in the labor market. We know even less about what new consumer goods and services it will allow businesses to create. And we know even less about what types of jobs will be created and what types of occupations will be created to provide those new goods and services. We just don't know a lot about this right now.

What reasons, beyond historical precedent, support optimism that AI will not lead to widespread job displacement?