Acemoglu on Technology, Power, and Progress

Daron Acemoglu, a renowned economist and professor at MIT who has previously published best-selling books such as “Why Nations Fail: The Origins of Power, Prosperity, and Poverty” (2012) and “The Narrow Corridor: States, Societies, and the Fate of Liberty” (2019), recently co-authored a book titled “Power and Progress: Our Thousand-Year Struggle Over Technology and Prosperity” with Simon Johnson, newly published in May 2023.

At present, the astonishing development of artificial intelligence has become a global hot topic, and ChatGPT symbolizes a major turning point in human history. Earlier, I published two books, respectively, titled “Dystopia: Four Futures of Humanity in the Age of AI” (2022) and “Catastrophe and Reconstruction: Human Future under the Impact of ChatGPT” (pen named, 2023). Currently, comparing Acemoglu’s arguments not only further broadens the perspective on related issues but also brings various reflections to mind.

Despite being a weighty work of 500 pages, “Power and Progress” is quite accessible and easy to understand. Acemoglu, a globally renowned economist, begins by pointing out the fundamental fallacy of mainstream economics, which blindly believes that technology, while increasing productivity, will inevitably raise labor demand and overall wage levels (similar to Hong Kong’s inconvenient understanding of the “trickle-down effect”). However, the reality is that technology can either increase or reduce employment, and raise or suppress wage levels, depending on the visions of the technological and industrial elites, as well as the political maneuvering and institutional environment at the time.

The author first cites the example of Count Ferdinand de Lesseps in 19th-century France. With visionary and pioneering determination, he overcame numerous obstacles and successfully built the Suez Canal. However, when applying the same model to the Panama Canal, he encountered disastrous consequences and the project had to be suspended. This example clearly demonstrates that it is not the technology itself but rather the worldview, vision, and approach to applying technology that have the most decisive impact. The author then devotes a significant portion of the book to explaining why certain charismatic leaders can turn seemingly impossible tasks into possibilities, and what political and institutional conditions contribute to their achievements.

This theory that emphasizes the agency of individual actors inevitably brings to mind Robert Shiller, the Nobel laureate in economics in 2013. Whether in his early proposition of “irrational exuberance” or his recent exploration on “narrative economics,” Shiller highlights the non-rational aspect of economic behavior, reflecting an anti-scientific, anti-authority, or even a “post-truth” economic world view. The ability to weave stories, engage in rhetoric, and put on a show is seen as the primary source of power and wealth.

Returning to “Power and Progress,” the author further cites various examples of technological revolutions throughout history, which cannot all be detailed here. However, these different cases point to a similar proposition: that technological visions put forth by extraordinary elites having been seen as guiding lights for the future, some visions only benefit a small privileged class, while others are compatible with the interests of the majority. As with the earlier example of the labor market, the same technology can be used to exploit or empower workers, often depending on a slight shift in perspective.

In this regard, it is worthwhile to compare “Power and Progress” with “Capital and Ideology” (2020) by the equally prominent economist Thomas Piketty, which is also currently highly regarded. The cover designs of both books are surprisingly similar (see image). The latter has long understood and accurately pointed out that the inequality system is not based on technology and resources, but rather on ideology and politics. Every society attempts to provide justifications for inequality in order to establish and maintain a specific institutional order.

What insights does the above discussion bring to the current AI revolution? As Acemoglu points out in Chapter 8 of the book, information technology was once expected to liberate humanity, but it has greatly weakened the bargaining power of workers through process automation and offshore supply chains. Information technology has facilitated the trend of so-called “globalization” that mainstream economists have touted as a “flat world,” resulting in an unlimited expansion of power for multinational corporations and a significant exacerbation of global wealth disparities.

Chapter 9 further focuses on the current AI revolution, which will automate more non-routine, complex and variable tasks, posing a threat to highly educated and highly skilled workers. However, as the author points out, the metaphor of “artificial intelligence” as computers being comparable to human brains has significantly diminished the scope and meaning of human intelligence, reinforcing the misconception that machines are like entirely new life forms. In reality, under the pervasive surveillance of intelligent systems, workers are forced to submit to some mysterious, black-box-like operational logic, reducing living, breathing individuals to mere cogs in the intelligent machinery.

As I have mentioned in my two recent works, contemporary AI, relying on big data and machine learning, appropriates personal data through intelligent surveillance. Computers themselves do not possess any “intelligence”; they simply make use of collective wisdom. This raises fundamental questions about “data ownership”…Mainstream economists have always extolled the virtues of private property rights, so why are they so silent on the issue of data ownership?

In Chapter 10, the author extends the discussion to the political realm, pointing out that intelligent surveillance not only alters production processes but also seeks to regulate people’s thoughts and habits. Computers and algorithms have access to every word and action, and can even comprehend everyone’s thoughts, providing tailored information (including false information) to manipulate everyone’s behavioral patterns. This example vividly illustrates that it is not the technology itself but the stance of the privileged elite that is most crucial.

Similarly, as I mentioned in my two recent works, in the past, authoritarian politics relied on bloated bureaucratic structures or massive party-state machinery, involving significant internal transaction costs (otherwise named political struggles). However, at present, political elites are benefiting from the AI revolution to establish a highly centralized and collectivized governance foundation. With the rapid advancement of surveillance technology and algorithms, a small class of elites can now control a large population, even clearly understanding the thoughts of each individual, creating an authoritarian or even totalitarian regime that manipulates people’s behaviors.

In the final chapter, the author reviews the power balance between elite and subordinate classes since the Industrial Revolution, which directly affects the visions and models of technological applications. In this regard, labor organizations, media monitoring, and community movements have all played a significant role in shaping the technological “agenda setting”, and the subsequent impact on institutional reforms. The book also touches on proposals regarding data ownership, suggesting that users can form alliances and engage in “collective bargaining” with tech companies to protect their rights as data owners.

In any case, “Power and Progress” consistently emphasizes that technology does not have a singular predetermined development direction, and is not performing the golden rule spoken of by economists. It is merely the outcome of the interaction and competition among different interest groups. Historical trends are always variable and subject to change, depending on how humanity collectively shapes them. This aligns well with the arguments in my two recent works.

After reading Acemoglu’s new book, I increasingly have reason to believe that the assertions of other mainstream economists are essentially providing cover for the privileged class, and go against the interests of the general public. They are undoubtedly a bunch of despicable and shameless individuals!

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