Rogoff: Artificial Intelligence and Globalization

Ken Rogoff wonders if replacing people with intelligent machines, e.g. pocket economics professors complete with holographic images instead of university professors, will be a bigger factor than globalization and outsourcing in explaining changes in global job and wage patterns in coming decades:

Artificial Intelligence and Globalization, by Kenneth Rogoff, Project Syndicate: Today’s conventional wisdom is that the rise of India and China will be the single biggest factor driving global jobs and wages over the twenty-first century. High-wage workers in rich countries can expect to see their competitive advantage steadily eroded by competition from ... Asia, Latin America, and maybe even some day Africa. ... But I wonder whether ... another factor will influence our work lives even more: the exponential rise of applications of artificial intelligence.

My portal to the world of artificial intelligence is a narrow one: the ... game of chess. You may not care a whit about chess... But the stunning developments coming out of the chess world ... should still command your attention. Chess has long been the centerpiece of research in artificial intelligence. While in principle, chess is solvable, the game’s computational complexity is almost incomprehensible. It is only a slight exaggeration to say there are more possible moves in a chess game than atoms in a universe.

For most of the twentieth century, programmers were patently unsuccessful in designing chess computers that could compete with the best humans. ... The computers gradually improved, but they still seemed far inferior... Or so we thought. Then, in 1997, ... IBM’s “Deep Blue” computer stunned the world by defeating the world champion Garry Kasparov. Proud Kasparov, who was perhaps more stunned than anyone, was sure that the IBM team must have cheated... But the IBM team had not cheated. ... Since 1997, the computers have only gotten better, to the point where computer programmers no longer find beating humans a great challenge.

Only a game, you say? Perhaps, but let me tell you this: when I played professional chess 30 years ago ..., I felt I could tell a lot about someone’s personality by seeing a sampling of their games... Until a short while ago, I could certainly distinguish a computer from a human opponent. Now everything changed like lightning. The machines can now even be set to imitate famous human players – including their flaws – so well that only an expert eye (and sometimes only another computer!) can tell the difference.

More than half a century ago, the godfather of artificial intelligence, Alan Turing, argued that the brain’s function could all be reduced to mathematics and that, someday, a computer would rival human intelligence. He claimed that the ultimate proof of artificial intelligence would be met if a human interrogator were unable to figure out that he was conversing with a computer. The “Turing test” is the holy grail of artificial intelligence research. Well, for me, a chess game is a conversation of sorts. From my perspective, today’s off-the-shelf computer programs come awfully close to meeting Turing’s test. Over the course of a small number of games on the Internet, I could not easily tell the difference. ...

What’s next? I certainly don’t feel safe as an economics professor! I have no doubt that sometime later this century, one will be able to buy pocket professors – perhaps with holographic images – as easily as one can buy a pocket Kasparov chess computer today.

So let’s go back to India and China. Globalization proceeded at a rapid pace through much of the last century, and at a particularly accelerated rate during its last two decades. Yet the vast body of evidence suggests that technological changes were a much bigger driver in global wage patterns than trade. That is, technology, not trade, was the big story of the twentieth-century economy (of course, the two interact...) Are we so sure that it will be different in this century? Or will artificial intelligence replace the mantra of outsourcing and manufacturing migration? Chess players already know the answer.