Since returning from this year's World Economic Forum meeting in Davos, I have been asked repeatedly what the most important things I should learn are. Among the widely discussed issues this year was artificial intelligence – particularly generative artificial intelligence (“GenAI”). And with the recent adoption of large language models (like the one powering ChatGPT), there's a lot of hope – and hype – about what AI can do to boost productivity and economic growth in the future.
To answer this question, we must keep in mind that our world is much more controlled by human stupidity than by artificial intelligence. The proliferation of major threats – each an element of the broader “multi-crisis” – confirms that our policies are so dysfunctional, and so misguided, that they fail to address even the most serious and obvious risks to our future. These include climate change, which will have huge economic costs; failed states, which would increase waves of climate refugees; and recurring deadly epidemics that could be more economically damaging than coronavirus disease 2019 (COVID-19).
What makes matters worse is that dangerous geopolitical competitions are developing into new cold wars – as is the case between the United States and China – and into potentially explosive hot wars, such as those taking place in Ukraine and the Middle East. Across the world, widening income and wealth inequality, driven in part by hyperglobalization and labor-saving technologies, has sparked a backlash against liberal democracy, creating opportunities for populist, authoritarian, and violent political movements.
Unsustainable levels of private and public debt threaten to precipitate debt and financial crises, and we may see the return of inflation and negative aggregate supply shocks and stagflation. The broader trend globally is toward protectionism, de-globalization, de-linkage, and de-dollarization.
“The same brave new AI technologies that can contribute to growth and human well-being also have great disruptive potential. “
Moreover, the same brave new AI technologies that can contribute to human growth and well-being also have significant disruptive potential. They have already been used to push disinformation, deepfakes and election manipulation to extreme levels, as well as raise concerns about permanent technological unemployment and even stark inequality. The rise of autonomous weapons and AI-enabled cyber warfare is no less dangerous.
Because of the fascination with artificial intelligence, Davos attendees did not focus on most of these major threats. This was not surprising. In my experience, the World Economic Forum's zeitgeist is a counterindicator of where the world is really headed. Policymakers and business leaders are there to flog their books and spew platitudes. It represents conventional wisdom, which is often based on a background view of global and macroeconomic developments.
Hence, when I warned at the World Economic Forum meeting in 2006 that a global financial crisis was coming, I was met with harsh criticism. When I predicted in 2007 that many eurozone countries would soon face sovereign debt problems, I was verbally intimidated by the Italian finance minister. In 2016, when everyone asked me whether the Chinese stock market collapse portended a hard landing that would trigger a repeat of the global financial crisis, I claimed – rightly – that China would face a bumpy but directed landing. Between 2019 and 2021, the trending topic at Davos was the cryptocurrency bubble that collapsed starting in 2022. Then the focus shifted to clean, green hydrogen, another fad that is already fading.
When it comes to artificial intelligence, there's a very good chance that the technology will actually change the world in the coming decades. But the World Economic Forum's focus on the AI gene already seems misplaced, considering that future AI technologies and industries will go far beyond these models.
Consider, for example, the ongoing revolution in robotics and automation, which will soon lead to the development of robots that have human-like features and are able to learn and perform multiple tasks the way we do. Or think about what artificial intelligence will do to biotechnology, medicine, and ultimately human health and lifespan. Equally interesting are developments in quantum computing, which will eventually combine with artificial intelligence to produce advanced cryptography and cybersecurity applications.
The same long-term perspective should also be applied to climate discussions. It is becoming increasingly likely that the problem will not be solved using renewable energy – which is growing too slowly to make a significant difference – or expensive technologies such as carbon capture and sequestration and green hydrogen. Instead, we may witness a fusion energy revolution, provided we can build a commercial reactor within the next 15 years. This abundant source of cheap, clean energy, combined with inexpensive water desalination and agricultural technology, would allow us to feed the ten billion people who will live on planet Earth by the end of this century.
Likewise, the revolution in financial services will not revolve around decentralized blockchains or cryptocurrencies. Instead, it will contain the kind of centralized, AI-powered financial technology that already improves payment systems, lending and credit allocation, insurance underwriting, and asset management. Materials science will revolutionize new components, 3D printing manufacturing, nanotechnology, and synthetic biology. Exploring and exploiting space will help us save the planet and find ways to create off-planet lifestyles.
These technologies and many others have the potential to change the world for the better, but only if we can manage their negative side effects, and only if they are used to solve all the major threats we face. One hopes that one day artificial intelligence will overcome human stupidity. But it will never stand a chance if we destroy ourselves first.
Nouriel Roubini is Professor Emeritus of Economics at New York University's Stern School of Business and chief economist and co-founder of Atlas Capital Team. He is the author of“Major Threats: Ten dangerous trends that threaten our future, and how to survive them” (Little, Brown & Company, 2022).
This commentary was published with permission from Project Syndicate – Artificial Intelligence vs. Human Stupidity.
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