Stop Pretending You Know What AI Does to the Economy
Source: https://noahpinion.substack.com/p/stop-pretending-you-know-what-ai Author: Noah Smith Date: 2025-08-18
Summary
Noah Smith’s critique of confident predictions about AI’s economic impact. Argues that both “AI will destroy jobs” and “AI will create jobs” camps are overconfident — the uncertainty is genuinely large.
Key Claims
- The overconfidence problem: economists and technologists make confident predictions about AI’s labor market impact, but history shows we’re bad at predicting technology’s labor effects.
- Historical lesson: automation has consistently surprised economists — sometimes destroying jobs (some manufacturing), sometimes creating entirely new ones (internet).
- The genuine uncertainty: AI is qualitatively different from previous automation — it affects cognitive tasks, not just physical ones. Historical analogies may not hold.
- What we can say: AI will create significant disruption and adjustment, regardless of the net effect. Transitional costs are real.
- Policy implication: uncertainty should increase support for safety nets and transition assistance, not reduce it.
Concepts
- Cognitive Debt — economic uncertainty about AI connects to individual uncertainty about career trajectory