Why I'm Worried About Job Loss and Thoughts on Comparative Advantage
7 days ago
- #Comparative advantage
- #AI displacement
- #Labor economics
- Comparative advantage does not guarantee fair wages, job numbers, or distribution of gains, potentially leading to wage collapse and capital concentration.
- AI primarily replaces codified knowledge, sparing senior workers with tacit knowledge, but this protection may shift upward over time, leaving juniors vulnerable.
- Organizational bottlenecks slow AI displacement but are not static; AI-native structures may bypass these, accelerating job losses.
- Elastic demand (Jevons paradox) may absorb productivity gains in some sectors but can still lead to catastrophic distributional effects for specific labor markets.
- Previous technological transitions created new cognitive jobs, but AI automates cognitive work itself, raising concerns about transition paths, income levels, and surplus ownership.
- The critical issue is who captures the surplus from AI productivity gains, with potential for unprecedented inequality if gains flow narrowly to capital owners.
- Policy must address ownership structures, redistribution, and transition support to ensure broad sharing of AI-driven productivity gains, as history shows benign outcomes require deliberate design.