AI Economics Must Avoid The Ethical Mistakes Of Climate Economics

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Artificial intelligence (AI) has garnered significant public attention in recent months, especially since the groundbreaking launch of the large language model, ChatGPT. Some of that newfound attention has centered around the notion of an impending “AI apocalypse.” While these ideas emerged from online communities peddling fear-mongering theories unbacked by substantive evidence, the ideas are increasingly going mainstream, supported by journalists and moneyed interests intent on influencing policy debates. In an attempt to lend credibility to their narratives, there is now burgeoning interest in academic research that aligns with the doomsayers’ predictions.

While academic research is a cornerstone of intellectual progress, there is a balancing act to be struck so that it doesn’t morph into a tool that politicizes science in order to advance a preset policy agenda. We have already seen these dynamics play out extensively in the realm of climate change economics, and there is now increased danger that AI economics research will follow a similar path.

A case in point is a recent paper penned by the esteemed MIT economist Daron Acemoglu along with MIT grad student Todd Lensman. Acemoglu, a highly-influential figure in economics, has contributed considerably to the field with his scholarship. However, the same cannot be said for his latest paper, which presents a model that attempts to explain how transformative technologies like generative AI augment “social welfare,” and subsequently how regulation could improve the situation.

Acemoglu’s model hinges on the “Ramsey economic growth” framework, a modelling approach that has, regrettably, embedded itself deeply in the field of economics. The model wields considerable influence, underpinning cost-benefit analysis and also utilized extensively in climate change economics. For example, it is used in determining the “social cost of carbon”— a concept that aims to capture the welfare impacts of CO2 emissions.

Born out of the intellectual pursuits of mathematician Frank Ramsey in the 1920s, the original model was later picked up and amended by economists like Tjalling Koopmans and Kenneth Arrow in the mid-20th century. Despite the undeniable academic stature of these economists, the Ramsey framework stands on shaky scientific ground.

Read the full article on Forbes.