The AI Revolution: America Leads and More Good News 

While much of the national focus in recent months has centered on the seismic economic, cultural, and international changes wrought by the calamitous policies of the Biden administration, there is yet another sweeping change that could alter the American economic and cultural landscapes for generations to come: the ascendancy of artificial intelligence (AI) technology.

In recent months, the business, finance, and political sectors both in America and abroad have been rocked by new AI capabilities. Less than five months out from the presidential election, there could be no better time to take stock of how the U.S. could shape AI development in the months, years, and generations ahead.

In a recent interview with AMAC Newsline, Casey Mulligan, a Professor of Economics at the University of Chicago and the former chief economist for the Council of Economic Advisers in the Trump White House, offered some insights.

“The U.S. is clearly leading,” Mulligan said of the global AI development race. “Microsoft came out of nowhere. They used to be a big company a long time ago, and now this one activity has really brought them back. I think, despite the words from our government leaders, we have quite a competitive tech industry—and they’re really duking out against each other, and consumers get to enjoy some amazing products. I’m sure they have others on the way.”

Mulligan noted that healthcare stands as one industry that could particularly benefit from the rise of AI. “There’s such restricted supply in healthcare—it’s hard to get a doctor appointment,” he noted. “So, if a machine can provide a lot of the advice that a doctor can provide, doctors may be upset, but it can be good for patients.”

Meanwhile, Mulligan continued, industries like manufacturing—which has long been seen as an industry that could easily suffer from an AI-infused economy—may not be as vulnerable as many think.

“AI’s been around for a long time,” Mulligan explained, noting that previous iterations of AI technology such as machine learning, data analytics, and the development of autonomous machines will likely have more impact on manufacturing than “the language processing that has wowed people in the last two years.”

When asked about fears surrounding AI and job displacement, Mulligan indicated that such concerns may be overstated. “The main thing [new inventions like AI] do is increase real wages—they make things cheaper, they allow workers to be more productive. In the big picture, the innovation is not evenly distributed, and so the innovation can be typically concentrated in a particular industry. But even then, the innovation could increase employment in the industries—or can decrease it, it can go either way.”

Mulligan pointed to the classic John Steinbeck novel The Grapes of Wrath, set during the Great Depression, as a key example of how industrial changes can yield mixed results—in that case, in the realm of agriculture. The novel portrays the Great Depression era phenomenon of agricultural supply outweighing agricultural demand. That dynamic led to fewer farmers but a higher level of food production. “So, on the whole,” Mulligan said, “real wages were going up because part of what people buy with their wages is food, but The Grapes of Wrath story was about the Oklahoma farmers, and it wasn’t so good until they could find something else to do,” thereby causing them to move westward to California.

Mulligan also mentioned taxi dispatchers as an example of the mixed results emanating from technological innovation, pointing to the 2019 Economic Report of the President, which was published during Mulligan’s tenure in the White House.

“Consider the recent history of taxi dispatchers, who take calls from individuals desiring a ride and direct a driver to the pickup point,” the report states. “About a decade ago, companies discovered how to use a smartphone to perform the tasks of the dispatcher, and these companies famously distributed such an app to millions of smartphone users. The result was a dramatic increase in the number of people working in the transportation industry, broadly understood to include drivers for Uber, Lyft, and other ride-sharing platforms.”

Or as Mulligan said to AMAC Newsline, “If you look very narrowly at the number of people dispatching taxis, it’s gone way down [since the release of the app]. But if you look at the number of people working in taxi-like industries, it’s gone way up—way, way up. And the reason is that having somebody else drive you has gotten so much cheaper, that people do a lot more of it.”

Given the generally positive results driven by innovation in technology, Mulligan warned against the threats of regulatory overreach.

“AI may increase employment in some cases,” he said. “So, I think that’s confused—and sadly, I think the confusion is used to make regulations to be like so many other regulations and protect the profits of some particular incumbent company. It’s a way of influencing Washington. So, I’m hopeful we don’t have regulation, but if we do, these sorts of fears will be used to justify what regulations almost always do: keep the companies from having competition.”

The possibility of stymying competition and outsourcing innovation to nations overseas was most recently showcased when Argentinian President Javier Milei visited California to encourage companies to invest in Argentina for its growing tech sector and pro-business agenda—specifically under the threat of a tightening U.S. regulatory landscape. Milei has also expressed his desire to make Argentina “the world’s fourth AI hub.”

“Regardless of the sinister intentions of regulators here, they may be disciplined, really, by competition internationally from holding back too much the innovation that happens here,” Mulligan observed.

“The tradition [is] when there’s a fear, the incumbents leverage that fear to get regulation to favor themselves,” he continued. “Like the Jones Act came about when the Titanic went down. But it’s still around today, really to protect a very small group of workers and companies. But on the other hand, we do have the international threat. It’s one thing to say that cars have to be made in America, but it’s pretty hard to say that intellectual property has to be made in America, because it flows so easily.”

Of course, how exactly AI technology will advance in the years ahead is unknown. But one thing remains abundantly clear: the AI revolution is only just beginning—and America is on the leading edge, for now.

Aaron Flanigan is the pen name of a writer in Washington, D.C.