Climate change: A risk assessment

Abstract

Inequality is one of the crucial challenges posed by the proliferation of artificial intelligence (AI) and other forms of worker-replacing technological change. This paper provides a taxonomy of the associated economic issues. First, redistribution is generally needed to ensure that technological progress generates Pareto improvements. Second, worker-replacing technological change may lead to technological unemployment through efficiency wage effects as well as slow adjustment processes. Lastly, technological progress may lead to the technological singularity whereupon machines come to dominate human labor. Under plausible conditions, non-distortionary taxation can be levied to compensate those who otherwise might lose. Fourth, the paper discusses the two main channels through which technological progress may lead to inequality – pecuniary and non-pecuniary externalities. Fifth, worker-replacing technological change is explored in a stark form in which machines act as perfect substitutes for human labor. Finally, the paper speculates on how technologies to create super-human levels of intelligence may affect inequality and on how to save humanity from the Malthusian destiny that may ensue – AI-generated abstract.