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Foreign.
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Today, we overestimate the importance of intelligence. Silicon Valley is a virtual cathedral for the worship of geniuses. Initially people like Steve Jobs, Bill Gates and Elon Musk, who have built world beating companies through the applications of technology.
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That technology has now moved on to
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AI, where Sam Altman, Denmas Hassabis, Yann Lecun and others have become the new icons of brilliance. And what this generation is building is indeed intelligence. There's a raison currently for AGI, or Artificial General Intelligence, a machine that will have the cognitive capabilities of a human being. Indeed, cutting edge machines are reportedly capable of modifying themselves and will not stop at human intelligence, but will become smarter than human beings. This type of super intelligence will then supposedly lead to huge advances in science, technology and the economy. There are serious speculations now about a future future not that far away, where advanced economies using superintelligent AI will be able to achieve substantially higher growth rates. 10, 15, 20% per year, compared to the 2 to 3% that's considered substantial today. There are several problems with these speculations. The first one is one that I'm not going to be able to evaluate whether AGI or superintelligence are even possible. But let's assume for the moment that it will come about. There are powerful reasons to believe that this case capability will be transformative in many ways, but it may not produce the explosive economic growth as the AI cheerleaders expect. The reason for this skepticism is that the binding constraint today on economic growth is simply not insufficient intelligence or cognitive ability. Even absent smart machines, human beings today collectively have more cognitive ability than at any prior point in human history. The binding constraint has to do with how that intelligence interacts with material world in a myriad of ways. Economic growth depends ultimately on the ability
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to build real objects in the real world.
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A smart machine may be able to come up with a design for a better mousetrap, but to actually fabricate that mousetrap requires capabilities beyond any machine's control. At a macro level, we are already running into the constraint of too many dollars chasing too little stuff. As environmental doomsayers have been arguing for years, there are ultimately material limits to growth. The one most obviously in front us is global warming.
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But there are many others.
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The planet does not have the resources
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to sustain 8 billion people living at
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an American standard of living. Indeed, China and America by themselves, if they experience 10% annual growth, would soon
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run out of everything from agricultural, land, water, energy, and almost everything else at a micro level as well. There's a problem translating the work of smart machines into material goods. Product innovation has always depended on a prolonged iterative process whereby a designer tries out ideas, fails, and modifies the design in response. No amount of superintelligence will ever be sufficient to stimulate the behavior of material objects under the conditions of the existing material world, as generations of builders and tinkerers know. Finally, there's the political and social level. I attended a presentation by an engineer at a leading AI firm who suggested that in the near future AGI would be able to, for example, provide clean drinking water to struggling cities in the developing world. The problem is that the failure to provide such basic services in poor countries is not lack of knowledge of what a good municipal water system looks like. The problem is entirely political and social. People do not want to pay the higher costs engendered by a new water system. Unionized workers in the municipal water authority don't want to lose their jobs to automation. Business owners don't want the disruption that will occur as streets are torn up for new pipes. The Finance Minister believes that there are other priorities and can't raise taxes to pay for the new system in many poor countries. Indeed, there are water mafias that buy water where it's cheap and resell it at extortionate prices. They're armed and ready to use violence if you get in their way. A super intelligent machine may be able to diagnose these problems, but it will have no way of overcoming them. Our understanding of the role of intelligence has been distorted by the kind of technological change that has occurred over the past couple of decades. The Internet, social media and related technologies are all based on software. They don't require fabricating complex new devices that have never been tested or built before. As a result, software scales very easily. There is now Google, Meta and other countries that have been able to turn into giants very, very quickly. By contrast, companies that make money by building material objects in the material world have much more difficulty scaling up. They too benefit from economies of scale, but reach a point of diminishing returns much faster than a SOFTW company. This is not to say that AI will not lead to huge productivity gains. But intelligent people like those in Silicon Valley tend to overestimate the importance of intelligence more generally. There are many other abilities other than intelligence that make for a good and successful human being, and many other inputs other than what AI can provide that are required to produce high economic growth.