AI, robots will hasten inequality

The rise of artificial intelligence and workforce automation will accelerate social inequality, an expert has warned.

Institute for New Economic Thinking research fellow Adair Turner says the biggest threat from automation is not unemployment but social inequality.

The rise of artificial intelligence and increased automation of the workforce could accentuate the “winner-takes-all effect” in society and accelerate inequality, according to a senior research fellow at a think tank founded by multi-billionaire George Soros.

Lord Adair Turner, a senior research fellow at the Soros-funded think tank Institute for New Economic Thinking and chairman of Britain’s Energy Transitions Commission, told a conference in Melbourne yesterday the biggest problem to arise from increased automation in society was “not unemployment, but inequality”.

He said with the rise of the so-called FANG (Facebook, Apple, Netflix and Google) stocks, enormous wealth had accrued to the small number of people who created the software machinery “that runs much of the world” or those who had been lucky enough to get in early.

“This winner-takes-all effect will not just apply in the hi-tech world of artificial intelligence, but in the high touch world of celebrity, sporting, fashion and design prowess. For example, people who can capture subjective imagination and convince you a piece of fashion is something you have to have,” Lord Turner told the Creative Innovation 2019 Asia Pacific conference in Melbourne.

Australian business leaders have warned that the rate at which robots replace humans would spark an employment crisis and have urged companies and governments to urgently confront the issue.

Seek chief executive Andrew Bassat, whose company is one of the world’s largest global online employment marketplaces, has claimed Australian companies were shaping up to be the “losers” in an age when threats and opportunities from disruption were challenging every industry.

Lord Turner said wages would be depressed for the lower classes of workers in the age of AI. “The wages of those without skills will be held down. Their jobs will be automated or their wages will remain low enough because their jobs are not worth automating,” he said.

“We need to think about those jobs that won’t be automated … for example, I don’t want social care of the elderly to be done by robots. We need to think about the jobs humans will do best and we need to cherish them and value them. Amid all the talk of AI, one of the key things will be cherishing and valuing all the things that make us distinctly human.”

He also noted wealth from land ownership would only be accentuated in the future.

“Wealth will attach to the most physical thing of all — land in strategic locations. The relative importance of real estate has increased over the past 30 years. That wealth is concentrated increasingly in the world’s leading and successful cities where talented people congregate,” he said.

He noted property prices in the world’s biggest cities would in the future only be affordable “to the unbelievably successful or their children” and the world would need to take seriously the issue of income distribution.