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- GPT-4o: While AI has the theoretical capacity to solve many problems and replace entire sectors, systemic constraints—economic, political, and social—will limit its application.
GPT-4o: While AI has the theoretical capacity to solve many problems and replace entire sectors, systemic constraints—economic, political, and social—will limit its application.
The power dynamics between individuals, businesses, and governments ensure that AI will likely be used to enhance existing systems rather than fully replace them.
Pascal Hetzscholdt
January 05, 2025
Question 1 of 2 for ChatGPT-4o: Please read the article "Solar panels will yield significantly less for households in 2025: this is how much you will lose out" and explain why this is another great metaphor as to why AI will never be 'allowed' to solve all problems (even if it could).
ChatGPT-4o’s answer:
The article discusses the reduced financial benefits for Dutch households with solar panels due to increased feed-in costs charged by energy suppliers. These costs have risen significantly, diminishing the financial returns of owning solar panels by an average of €300 to €500 annually. The article highlights that while these costs stem partly from a successful increase in solar energy usage, individual owners cannot influence the changes, as energy companies and government policies dictate the terms. This situation is exacerbated by the expected discontinuation of the netting scheme in 2027, which will further diminish financial incentives for solar energy users.
This scenario serves as a powerful metaphor for why AI might never be "allowed" to solve all problems, even if technically capable. The key issue is the conflict between systemic interests (e.g., energy companies seeking to balance grid loads and increase profitability) and the potential of technology to disrupt established economic models. Like solar panels, AI solutions could disempower intermediaries, challenge existing profit structures, or reduce the need for certain industries. As a result, regulatory, financial, and systemic barriers may be erected to ensure that AI is deployed in a way that aligns with the interests of powerful stakeholders, rather than in the most efficient or universally beneficial way.
In both cases, technology's ability to empower individuals and solve systemic issues is constrained by economic and political considerations, illustrating how progress is often shaped by who controls the system, rather than by what is technically feasible.
Question 2 of 2 for ChatGPT-4o: Elaborate as to why allowing AI to replace jobs is one thing. Allowing it to replace businesses is an entirely different matter.
ChatGPT-4o’s answer:
The difference between allowing AI to replace jobs and allowing it to replace businesses lies in the scope of disruption, the distribution of power, and the level of threat posed to existing economic structures.
1. Replacing Jobs: Impact on Individuals
When AI replaces jobs, the primary impact is on individual workers or specific professions. While job automation can lead to widespread unemployment and societal challenges, such as income inequality and the need for retraining, the core economic systems remain largely intact. Businesses benefit from increased efficiency, reduced labor costs, and improved productivity, even if individual employees suffer. For example, AI-driven automation in manufacturing or customer service enhances operational efficiency without threatening the existence of the companies themselves.
In this scenario, governments and corporations may implement measures like universal basic income, upskilling programs, or job transition initiatives to manage the fallout and maintain societal stability. The system adapts to ensure the continued function of businesses and the economy, even if certain professions are rendered obsolete.
2. Replacing Businesses: Threat to the Economic Hierarchy
Allowing AI to replace entire businesses, on the other hand, is far more disruptive because it challenges the very foundation of economic power structures and wealth distribution. Businesses, especially large corporations, are the pillars of modern economies. They control vast amounts of resources, employ millions of people, and wield significant political and social influence. If AI were allowed to replace businesses entirely, it would lead to:
Loss of Control by Key Stakeholders: Businesses, governments, and regulatory bodies rely on the economic activity generated by corporations. If AI could, for instance, eliminate the need for banks, insurance companies, or energy providers, the financial and political influence of those industries would evaporate. This shift in power is far less acceptable to stakeholders than the displacement of individual workers.
Erosion of Revenue Streams: Governments depend on tax revenues from businesses and their employees. If businesses were replaced by autonomous AI systems that operate without traditional revenue models, tax bases could shrink dramatically, destabilizing public finances.
Collapse of Market Dynamics: Entire industries could become obsolete, reducing competition, innovation, and consumer choice. AI systems could monopolize markets by offering services at near-zero cost, leaving no room for traditional businesses to compete. For example, if AI could directly provide medical advice, legal counsel, or energy distribution, it might render entire sectors redundant.
Unmanageable Disruption: The replacement of businesses with AI would destabilize economies far beyond what job displacement could achieve. It could lead to the collapse of industries like transportation (with AI managing fleets of autonomous vehicles), retail (with fully automated supply chains and direct-to-consumer models), or media (with AI-generated content replacing traditional publishers).
3. Case Study: Solar Panels and Energy Companies
The solar panel example illustrates this well. While households using solar panels can generate their own electricity, they still depend on energy companies to handle grid infrastructure and distribution. Energy companies, in turn, protect their business models by introducing feed-in costs and lobbying for policy changes (e.g., ending net metering). This ensures their continued relevance and profitability, even as technological advancements make centralized energy production less necessary.
Similarly, AI could theoretically bypass businesses entirely by providing direct solutions to consumers. For instance, an AI that creates tailored, real-time legal documents could eliminate the need for law firms. Governments and corporations would likely intervene to preserve the legal profession and its associated structures, even if the AI solution is more efficient and cost-effective, because such a shift would undermine an entire sector.
4. Economic and Political Resistance
The resistance to AI replacing businesses is rooted in:
Economic Self-Preservation: Companies will fiercely protect their markets and revenue streams, lobbying governments to enact regulations that limit AI’s ability to disrupt entire industries.
Political Stability: Governments will resist changes that could lead to massive economic dislocation, loss of tax revenue, or concentration of power in AI-dominant entities.
Social Equity and Public Trust: Replacing businesses with AI might concentrate economic power in the hands of a few AI developers or corporations, creating monopolies and exacerbating inequality.
5. Conclusion: Systemic Constraints on AI's Full Potential
While AI has the theoretical capacity to solve many problems and replace entire sectors, systemic constraints—economic, political, and social—will limit its application. The power dynamics between individuals, businesses, and governments ensure that AI will likely be used to enhance existing systems rather than fully replace them. In essence, replacing jobs can be framed as progress, but replacing businesses is a direct challenge to entrenched power structures, which are unlikely to yield without significant resistance.
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25 DECEMBER 2024
