Fve years after releasing his book in French, “From the Dream of Globalization to the Nightmare of Populism,” economist Bruno Colmant, a member of the Royal Academy of Belgium, underscores the danger of artificial intelligence exacerbating the crisis of today’s economic and social systems.
Is a new economic model emerging with the rise of artificial intelligence?
The critical issue revolves around productivity gains. These are vital because economic growth is fundamentally driven by a combination of demographic trends and productivity improvements. Productivity gains are typically distributed between two production factors: capital and labour. The development we’ve seen since the early nineteenth century, with the initial manufacturing economy and machinery replacing human labour, is now amplified to a much greater extent by artificial intelligence.
These productivity gains will likely be predominantly, if not entirely, absorbed by capital at the expense of labour. As a result, the relative value of wages per unit of service or time will decline.
This situation echoes Sismondi’s early 19th-century theory. A historian and political economist, Sismondi warned against the dangers of unchecked industrialism, noting the disappearance of certain types of work and their replacement by machines. He proposed that anyone permanently displaced by machines should receive a lifelong pension. Capitalism has already largely triumphed. We are now entering an era of hypercapitalism, where social and f iscal systems may become unsustainable if labour remuneration continues to decline.
What measures should be taken to mitigate this risk?
We must regulate companies and ensure they pay taxes to restore balance to the tax system. Additionally, following Sismondi’s logic, we could consider requiring these companies to contribute to social security.
What kind of relationship have GAFAM companies established with the US government concerning AI investments?
Historically, US capitalism was built on free competition, with easy market entry and exit, and a focus on combating monopolies. Today, however, the opposite is true. Old principles have been abandoned, and monopolies are thriving. The problem is that these monopolies self-reinforce. Their valuation relies on the belief that they will continue to uphold their dominance, having the necessary resources to achieve their goals.
Moreover, the US government strongly supports privately-led technological development. The belief that government influence is waning might be true for Europe but not for the United States. Without US government backing, Elon Musk would not have achieved his current success.
Without US government backing, Elon Musk would not have achieved his current success
Furthermore, in the US, there is virtually no social safety net, and labour is viewed as an externality. For instance, Amazon has ordered 750,000 robots. The share of labour in GDP is decreasing in favour of capital income.
China, on the other hand, follows a different approach, aiming for overperformance, such as by increasing the population’s IQ levels.
Will global competitiveness increasingly rely on automation?
Yes. French President François Mitterrand observed in 1995, «the 21st century will be characterised by a struggle to the death, but without deaths, between China and the USA.» This competition will be driven by automation and AI.
How can this technology-driven future be socially accepted?
All scenarios are possible. If hypercapitalism continues to impoverish people, major social conflicts are inevitable. People will resist having their lives «deterritorialised,» or dissolved into an intangible sphere that allows some to exploit others without any protective geographic framework.
T he Great Depression, as a crisis of capitalism, led to a world war. If technological progress ends up stifling humanity, we could face an era of immense violence.
In the short term, what concerns me is that governments no longer act strategically; they primarily accommodate market demands.
Do you foresee social unrest erupting even before geo-strategic conflicts, such as in Taiwan?
I am more concerned about social and civil unrest than anything else. Consider what might happen in the USA if Trump wins the election…
Could new, virtuous economic and social models emerge?
How can we envision a stable world when productivity gains are monopolised by global corporations that wield more power than governments, and the erosion of purchasing power is constrained solely by the necessity to sustain the next purchase?
To navigate this new world, governments must now conceive systems of social and fiscal solidarity. For example, Europe faces the challenge of integrating an ageing population. Automation should not equate to reduced social contributions. Governments should consider taxing machines, as Sismondi suggested. Do we have to wait for a revolution to bring this about?
By Marion Moreau
This interview also appeared in French language in Hors Normes, a syndication partner of World Economic Journal
PHOTO: CHRISTINNE MUSCHI/BLOOMBERG VIA GETTY IMAGES
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