A Nobel Prize-winning economist has warned that persistent predictions of artificial intelligence destroying the job market could become a self-fulfilling prophecy.
Robert Shiller, who shared the 2013 Nobel Prize in economics for his work on asset prices, wrote a guest essay on Monday in The New York Times that argued the panic over AI is not a new sociological phenomenon.
In fact, he wrote, humans have been worried that new technology could replace them since the days of Aristotle, who envisioned a self-powered loom and a lyre that could play music without someone plucking the strings.
And in the 19th century, a group of English textile workers — who later became known as Luddites — intentionally destroyed machines they believed would put them out of a job.
ROBERT SHILLER: PEOPLE AREN’T AS IMPRESSED BY HOMES ANYMORE
Shiller fears that similar anxieties inherent within us are rearing their head once again.
He cited a Quinnipiac poll from March, which found that 70% of people believe AI will reduce the number of jobs. Additionally, only 16% of Americans believe AI will have a positive impact on society over the next two decades, according to a Pew Research survey conducted in June.
“Like many others, I believe AI could lower employment. But unlike most, I don’t necessarily blame the technology itself. Instead, I worry about the potency of the fear it is generating,” Shiller wrote.
“Our brains are wired to respond to stories. Narratives floating in a population can affect individuals’ economic decisions,” he continued. “When millions of people make millions and millions of decisions based upon negative expectations, there is a risk that fear can actually help birth the reality.”
THE AI REVOLUTION THREATENS OFFICE JOBS, BUT REVIVES DEMAND FOR SKILLED TRADES
Much of the negative media coverage around AI centers on speculation over how much it will impact jobs and the economy.
In late May, Anthropic CEO Dario Amodei told Axios that in the next one to five years, AI could eliminate half of all entry-level white-collar jobs and spike unemployment to as much as 20%. He later expressed uncertainty over the exact timeline.
The current unemployment rate is 4.3%, up from 4% at the beginning of President Donald Trump’s term in January 2025.
AI IS TOP REASON FOR US JOB CUTS FOR THIRD STRAIGHT MONTH
“While the job market has slowed for a host of reasons, there are reports that fear of an AI apocalypse is worsening the freeze and contributing to record lows in consumer sentiment,” Shiller argued.
Shiller implied that tech leaders like Amodei, who promote doom-and-gloom scenarios their own companies could help realize, are being somewhat short-sighted and should be reined in to prevent an economic recession.
“Perhaps the best we can do is to appeal directly to the leaders of Silicon Valley who have been promoting these negative narratives with such vigor,” Shiller wrote.
He continued: “Surely the resulting media attention highlighting how dangerously powerful your AI model is may help you sell more wares, but it may be far harder to do so in a period of recession. Try not to forget the critical lessons taught by our past.”
Read the full article here