Bruce Rattner argues that we need to embrace AI, as it is the key to increased economic growth in the foreseeable future. He acknowledges, however, that AI will create millions of losers, and notes that the previous wave of globalization and technological change that started in the 1990s led to higher levels of inequality and a dangerous populist backlash. He consequently thinks we need to plan to redistribute the wealth added by AI in order to prevent another backlash. Is he right?
In order to answer that question, we need to consider why efforts to redistribute the wealth created by the last wave of change were a failure. The GOP was, and still is, essentially a coalition of businessmen and retirees. The former group views taxation as theft and any effort, however paltry, to redistribute wealth as socialism; the latter group lives on existing government transfer payments and investments and is consequently insulated from the impacts of creative destruction. Neither has any incentive to support programs that help the victims of technological change. Together, they fought off attempts to expand the welfare state by using culture war issues to flip the votes of just enough reactionary white workers to win elections. The losers fought back; hence, the growth of right-wing populism in America and in Europe.
What part of that equation has changed? If anything, it’s worse today than it was 20 years ago. What Rattner is proposing makes economic sense, but is impossible in the real world, at least in the absence of a major change in the GOP.