AI AI Captain!

Steve Jobs said in his famous Stanford commencement speech something that has always stuck with me:

“You can't connect the dots looking forward; you can only connect them looking backward. So you have to trust that the dots will somehow connect in your future”

Jobs spoke about this from a career standpoint, but he could just as easily have been talking about AI 

AI feels new because ChatGPT arrived in November 2022. But AI has quietly shaped our world for over a decade — from Netflix recommendations to Google Maps predicting traffic.

Regardless, there is a polarizing view these days on the impact AI will have on society (jobs, quality of life, education, the list goes on). On one end, many seem to think that AI will take over the world and change everything - i.e. it’s dangerous and should be managed carefully. On the other end, the optimists think this is the best invention we’ve had since the industrial revolution and we should roll it out as fast as possible. 

So in a series of posts (maybe a couple, maybe more), I wanted to understand, write down and explain each side’s views and why they may be right. To be candid, I am optimistic on AI but I don’t think it is all sunflowers and rainbows. There will be pain in the short term, but just like any other groundbreaking inventions, the management and balance of short-term pain with long-term gain will be critical to assess the societal impact of this technology

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Today, I want to take the techno-optimist view and discuss AI’s impact on jobs with a historical lens to see what inventions of the past might tell us about the future. As Mark Twain famously said - “History doesn't repeat itself, but it often rhymes.”

AI’s impact on jobs

The biggest fear with AI and automating away a lot of the work that we do right now, is that this will lead to massive job loss. It will amplify the wealth inequality that exists in the world today and it’ll be broadly destructive to society as a whole

Fear not, fellow skeptic. For any technology to have a huge impact to jobs, you’d have to assume that the amount of work being done would have to stay the same. Which, fundamentally, it will not. The pie will expand. 

Let’s look at back at 3 historical examples to bring this point home

Wheels on Wheels

In the 1800s, at the time when the tractor was invented, 80% of the US population was working in farming. Think about this - your family’s livelihood, how you source food, make money, keep yourself employed, raise your kids, was entirely dependent on the agrarian lifestyle. And all of a sudden, there’s a breakthrough invention that is incentivizing food companies to shift towards manufacturing and build out factories to automate a lot of this. 

Such an innovation was as dangerous as it could get in terms of immediate impact to society. But what happened? 

When the tractor replaced the work of 20 people, it didn’t just auto-delete jobs. It deleted scarcity. Food became cheap. Productivity surged, food prices declined, disposable incomes rose, and entirely new industries were created due to diversified demand. And those industries absorbed the displaced labor

If AI makes getting legal advice or access to software free, or cheap (just like bread became cheap), people will diversify their consumption needs to products and services that don’t even exist yet. 

Spin Jenny Spin

If you go even further back in time, the 18th century was when the cotton industry was booming in Britain. Weavers were in high demand and the textile industry was the backbone of the British economy, involving nearly every household in one way or the other. And then - the Spinning Jenny - an automated, less laborious way of producing yarn was invented. The weavers were livid - they couldn’t foresee how they’d be able to maintain their quality of life with their jobs at risk. However, as cotton production became more efficient, the price of cotton plummeted, and this brought about explosive growth in the garment, shipping, and retail industries - ones that didn’t even exist before. 

The Spinning Jenny displaced muscle, but it didn’t displace work. It moved humans into factories for maintenance, design, management etc. 

Give me a Coal

The invention of the coal-powered steam engine produced a similar fear as what we hear today with “AI taking over”. People feared that the “Great Engine” would replace humans and horses and would lead to “mechanical tyranny.” But what happened? The next few decades led to tremendous growth in civilization and birth of non-existent industries such as railways, trade and shipping. This created millions of jobs in engineering, logistics and tourism that were unimaginable to someone standing on a coal mine a few years ago

The pattern is clear

Innovation - whether in the form of new ways of working or new technology - can destroy as well as create. And with AI, it will be no different. There will be a bit of both. 

Unlike tractors or steam engines, AI is displacing cognitive muscle, not physical muscle. And maybe that’s why this wave feels different. However, if there’s anything that history teaches us, it’s that humans will always want more - better personalization, better products/services, better access, better cures. As long as this is true, demand (and jobs as a result) won’t disappear, it’ll just shift.

The lesson is not blind optimism. It is one of adaptability. The people who suffered the most during the industrial revolution were not the ones who embraced the change, but those that assumed the world would remain the same