Democratic economic policy in the age of AI

Let’s continue with the AI theme. We’ve done the dire warnings of doom, so now let’s be a little more pragmatic and optimistic.

A friend called me up the other day and asked me what I thought Democrats could offer Americans in terms of economic policy in this day and age. We discussed the limitations of the progressive economic program that coalesced in the late 2010s and was implemented during the Biden years. We then talked about possibilities for how AI might affect the economy, and what Democrats could offer in various scenarios. I promised my friend I would write a post outlining my thoughts, so here you go.

My basic argument is that the next Democratic policy offering should be robust to uncertainty. AI technology is changing very fast, and it will probably end up changing other technologies very quickly as well — robotics, energy, software, and so on. That rapid technological progress creates great uncertainty. Looking even just 10 years into the future, we basically don’t know:

1. What kind of jobs humans will be doing (and which will pay well)

2. What the macroeconomy — inflation, growth, and employment — is going to look like

3. How the distributions of income and wealth will change

Those are essentially all of the biggest questions in economics, and we don’t really know any of them. So what do you do when you can’t predict the future? You come up with ideas that will be likely to work no matter what the future ends up looking like. In other words, you try to be robust. AI is like a storm that’s buffeting the whole economy; Democrats need to be the rock in that storm.

In fact, I have several ideas for how Democrats can create a robust economic offering even in the face of radical uncertainty. My three basic principles are:

1. Abundance

2. Government taking an ownership stake in the corporate system

3. Policies to promote human work

Before I talk about those, however, I want to briefly go over what the 2010s progressive program looked like, and why Democrats can’t just keep pushing that.

The failures of the 2010s progressive economic program

The progressive economic ideas of the 2010s were, in large part, a reaction to the Great Recession and to the rise of inequality since the 1970s. But they also had their roots