R Street Institute

Real Solutions

The ‘fixed AI’ fallacy

by Anne Hobson
April 13, 2017
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issues: Technology and Innovation
As Andy Kessler points out in The Wall Street Journal, a tax on robots would hinder entrepreneurial activity in automation and artificial intelligence (AI). The same algorithms that make job-displacing robots smarter and more effective also make us more productive at translating documents, searching for information and streamlining daily tasks. We can’t have our cake and tax it too. As Winston Churchill once said, “I contend that for a nation to try to tax itself into prosperity is like standing in a bucket and trying to lift himself up by the handle.”

Gates and others who bemoan the changing job market fall prey to the fixed pie fallacy—the assumption that available jobs and the wages those jobs pay are fixed quantities. Developments in information technology have led to jobs unimagined by macroeconomists and technologists of previous decades, such as social-media managers, website designers, bloggers and virtual assistants. Crafting policy based on “fixed AI” thinking will prevent new jobs from arising.

Job displacement is an inevitable consequence of technological development and economic growth. Instead of taxing our digital co-workers, thought leaders such as Gates should argue for policy changes that permit experimentation in skills-based education and workplace benefits to better equip workers with the skills and financial flexibility to adapt to the changing jobs market. To realize AI’s full benefits of productivity and convenience, we need to view it as a feature, not a bug, of our tech-imbued future.

Image by Jinning Li

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