Unemployed men lining up for a free soup kitchen in Chicago opened by Al Capone, February 1931
At the Wall Street Journal’s Tech Live Qatar this week, broadcast to an audience of executives and investors in Doha, Qatar, there was an interesting set of quotes from Sam Englebardt, a media and tech investor who is a general partner at the venture capital firm Galaxy and a board member of the right-leaning radio broadcaster iHeartMedia (formerly Clear Channel). As quoted in Chip Cutter’s “AI job losses are coming, tech execs say. The question: who’s most at risk?” published yesterday in the WSJ, Englebardt said the following about banking analysts, consultants, and legal analysts:
They’re toast…. Especially if you put a little time into understanding how to prompt these models, there’s no human team that can compete with it….
It seems likely to me that we are going to enter a period of 10-plus percent annual GDP growth, maybe higher, and 30-plus percent unemployment. We’ve never seen anything like this.
Englebardt is a smart guy (Oxford University, Harvard Law) with access to a lot of money. So what is the smart money saying here?
It’s simple: Winter is coming for most US workers, especially whitecollar workers, while the wealthy will celebrate their great fortune.
During the Great Depression the US unemployment rate peaked at 25%, the highest such rate ever recorded. Englebardt is saying AI unemployment will be worse than the Great Depression.
But if you’re wealthy he’s saying things will be fabulous. The last year the US enjoyed 10+% annual GDP growth was during the Truman administration; 1950 saw so much growth due to increased production for the Korean War. The closest we’ve come since then was 1965’s 8.5% growth rate, due in large part to increased production for the Vietnam War. Most of this earlier growth benefited the bulk of the US population. In contrast, early indications are that Englebardt’s predicted 10+% annual GDP growth will go mostly to the wealthy.
So really, Englebardt is saying for most workers it’ll be worse than the Great Depression, but the wealthy will be better off than any time during the past 75 years.
Englebardt is not the only smart person saying things like this. For example, Nobel Laureate Geoffrey Hinton, sometimes called the “godfather of AI”, said in an interview in September:
What’s actually going to happen is rich people are going to use AI to replace workers. It’s going to create massive unemployment and a huge rise in profits. It will make a few people much richer and most people poorer. That’s not AI’s fault, that is the capitalist system.
However, as far as I know Hinton didn’t forecast specific figures. Englebardt did.
In the past, 10+% annual GDP growth came only during a major war, or after a great depression that offered growth opportunities only after enormous pain. Englebardt, though, is saying that this time it’s different: AI will hit us worse than a great depression or a major war.
