Economists blame technology more for increasing inequality
Yet the technological shift evolved as the growth of post-secondary education slowed and businesses began to spend less on training their workers. “When technology, education and training move together, you achieve shared prosperity,” said Lawrence Katz, labor economist at Harvard. “Otherwise, you don’t. “
The increase in international trade has tended to encourage companies to adopt automation strategies. For example, companies worried about low-cost competition from Japan and later China invested in machines to replace workers.
Today, the next technological wave is artificial intelligence. And Mr. Acemoglu and others say it can be used primarily to help workers, make them more productive, or to supplant them.
Mr. Acemoglu, like other economists, has changed his view of technology over time. In economic theory, technology is almost a magic ingredient that both increases the size of the economic pie and makes nations richer. He remembers working on a textbook over ten years ago that included standard theory. Soon after, while doing further research, he had some doubts.
“It’s too restrictive a way of thinking,” he said. “I should have been more open-minded.”
Mr. Acemoglu is not an enemy of technology. Its innovations, he notes, are needed to tackle society’s biggest challenges, such as climate change, and to ensure economic growth and rising living standards. His wife, Asuman Ozdaglar, heads the Electrical and Computer Engineering Department at MIT.
But as Mr. Acemoglu delved deep into economics and demographics, the displacement effects of technology became increasingly apparent. “They were more important than I thought,” he said. “It made me less optimistic about the future.”
Mr Acemoglu’s estimate that half or more of the growing wage gap in recent decades has come from technology was released last year with his frequent collaborator, Pascual Restrepo, an economist at the University. from Boston. The conclusion was based on an analysis of demographic and business data that details the decreasing share of economic output that goes to workers in the form of wages and the increase in spending on machinery and software.