Think about the AI revolution - does the social contract need rewriting to fit humans and AI?

Think about the AI revolution - does the social contract need rewriting to fit humans and AI?

Author: Miruna Suciu

The traditional social contract theory, as developed by thinkers like Hobbes, Locke, and Rousseau, was conceived around relationships between humans and human institutions. It dealt with how individuals agree to cede certain freedoms to a governing authority in exchange for security, rights protection, and other social goods.

The introduction of AI systems raises novel questions about this framework. For instance:

1. Rights and responsibilities - what obligations, if any, do we have toward AI systems? And what obligations might they have toward humans? This becomes especially complex as AI systems become more sophisticated and potentially develop greater capabilities for autonomous decision-making.

2. Representation and governance - how should AI development and deployment be governed? The traditional social contract assumes participants can meaningfully consent and participate in governance structures. 

3. Distribution and benefits - how do we ensure AI advances benefit society broadly rather than exacerbating existing inequalities? The social contract traditionally aimed to create fair terms of cooperation. 

4. Power dynamics - as AI systems take on more significant roles in society, how do we maintain meaningful human agency and democratic control? The traditional social contract assumed human actors as the primary wielders of power.

I think we need to evolve our social frameworks, but not necessarily completely rewrite them. The core principles of the social contract - consent, reciprocity, protection of rights, and promotion of the common good - remain relevant. However, we need to carefully consider how to apply and adapt these principles to account for AI's unique characteristics.

Many economic policy questions arise, especially as AI and automation potentially shift more economic value toward capital ownership. In this context, the case for shifting taxation toward capital becomes relevant, for the following reasons:

1. As AI/automation increases, returns increasingly flow to capital owners rather than workers. Taxing capital more heavily could help redistribute these gains more broadly.

2. Current tax systems often favor capital (e.g., lower rates on capital gains than wages), which can exacerbate inequality as technology advances.

3. Labor mobility is generally more limited than capital mobility, making labor taxation potentially more economically distortionary in some ways.

As such, the following key challenges and considerations are of reference:

1. Implementation complexity. Capital is often more mobile internationally than labor; valuation of non-liquid assets can be difficult and capital can be restructured to avoid taxation.

2. Economic effects. AI and automation could reduce investment if not carefully designed; also, might affect small business owners and entrepreneurs and could impact retirement savings depending on the structure.

3. Transition issues. It is necessary to consider impacts on existing investments; also, it may require international coordination to be effective. AI and automation might face political resistance from affected groups.

In terms of potential approaches, the following may be of interest:

1. Progressive capital taxation that maintains incentives for small-scale investment while capturing more revenue from large concentrations of wealth.

2. Combining capital taxation with policies to broaden capital ownership (e.g., sovereign wealth funds, employee ownership schemes).

3. Using capital tax revenue to fund programs that help workers adapt to technological change (education, retraining, etc.).

While not a complete solution to AI-driven economic changes, thoughtfully designed capital taxation could be one tool among many to help ensure technological gains are broadly shared. The key would be careful design to balance redistribution goals with maintaining incentives for productive investment.

However, the following key dimensions need our attention in the short run rather than the long run:

1. Workplace transformation, in terms of skill requirements (i.e., continuous learning becoming not just beneficial, but essential) and work structure (i.e., potential for more flexible, project-based work arrangements, growing importance of human-AI collaboration skills).

2. Societal changes, in terms of economic structure (i.e., potential concentration of wealth in tech-oriented sectors), education (i.e., need to reimagine education systems for AI-integrated world, lifelong learning becoming crucial), and social relationships (i.e., changes in how we communicate and interact, questions about authenticity in an AI-mediated world).

As such, we can address some future expectations in terms of career paths, progress and innovation, and social mobility. 

1. Career paths: less linear career trajectories; multiple career changes becoming normal; growing uncertainty about long-term job security; new types of jobs and roles emerging.

2. Progress and innovation: accelerating pace of change; higher expectations for technological solutions; growing awareness of both opportunities and risks; need to balance innovation with ethical considerations.

3. Social mobility: potential for both increased opportunities and wider gaps; important role of access to technology and education; new pathways to economic advancement emerging; risk of growing divide between tech-savvy and tech-limited populations.

The changes described above present both opportunities and challenges. Opportunities include the potential for increased productivity and wealth creation, new solutions to long-standing problems, and more flexible and personalised ways of working and learning. Challenges include ensuring a fair distribution of benefits, managing the pace of change and adaptation, maintaining social cohesion and addressing ethical concerns and risks.

The key issue isn't just technological change itself, but how we as a society choose to shape and respond to it. The decisions we make now about regulation, education, economic policy, and social support systems will significantly influence whether these changes lead to broadly positive outcomes or exacerbate existing inequalities.

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