We need to design a system that embraces this technological future and taxes the assets that will make up most of the value in that world–companies and land–in order to fairly distribute some of the coming wealth.
moores.samaltman.com
Moore's Law for Everything
by Sam Altman · March 16, 2021
My work at OpenAI reminds me every day about the magnitude of the socioeconomic change that is coming sooner than most people believe. Software that can think and learn will do more and more of the work that people now do. Even more power will shift from labor to capital. If public policy doesn’t adapt accordingly, most people will end up worse off than they are today.
We need to design a system that embraces this technological future and taxes the assets that will make up most of the value in that world–companies and land–in order to fairly distribute some of the coming wealth. Doing so can make the society of the future much less divisive and enable everyone to participate in its gains.
In the next five years, computer programs that can think will read legal documents and give medical advice. In the next decade, they will do assembly-line work and maybe even become companions. And in the decades after that, they will do almost everything, including making new scientific discoveries that will expand our concept of “everything.”
This technological revolution is unstoppable. And a recursive loop of innovation, as these smart machines themselves help us make smarter machines, will accelerate the revolution’s pace. Three crucial consequences follow:
- This revolution will create phenomenal wealth. The price of many kinds of labor (which drives the costs of goods and services) will fall toward zero once sufficiently powerful AI “joins the workforce.”
- The world will change so rapidly and drastically that an equally drastic change in policy will be needed to distribute this wealth and enable more people to pursue the life they want.
- If we get both of these right, we can improve the standard of living for people more than we ever have before.
Because we are at the beginning of this tectonic shift, we have a rare opportunity to pivot toward the future. That pivot can’t simply address current social and political problems; it must be designed for the radically different society of the near future. Policy plans that don’t account for this imminent transformation will fail for the same reason that the organizing principles of pre-agrarian or feudal societies would fail today.
What follows is a description of what’s coming and a plan for how to navigate this new landscape.
Part 1
The AI Revolution
On a zoomed-out time scale, technological progress follows an exponential curve. Compare how the world looked 15 years ago (no smartphones, really), 150 years ago (no combustion engine, no home electricity), 1,500 years ago (no industrial machines), and 15,000 years ago (no agriculture).
The coming change will center around the most impressive of our capabilities: the phenomenal ability to think, create, understand, and reason. To the three great technological revolutions–the agricultural, the industrial, and the computational–we will add a fourth: the AI revolution. This revolution will generate enough wealth for everyone to have what they need, if we as a society manage it responsibly.
The technological progress we make in the next 100 years will be far larger than all we’ve made since we first controlled fire and invented the wheel. We have already built AI systems that can learn and do useful things. They are still primitive, but the trendlines are clear.
Part 2
Moore's Law for Everything
Broadly speaking, there are two paths to affording a good life: an individual acquires more money (which makes that person wealthier), or prices fall (which makes everyone wealthier). Wealth is buying power: how much we can get with the resources we have.
The best way to increase societal wealth is to decrease the cost of goods, from food to video games. Technology will rapidly drive that decline in many categories. Consider the example of semiconductors and Moore’s Law: for decades, chips became twice as powerful for the same price about every two years.
In the last couple of decades, costs in the US for TVs, computers, and entertainment have dropped. But other costs have risen significantly, most notably those for housing, healthcare, and higher education. Redistribution of wealth alone won’t work if these costs continue to soar.
AI will lower the cost of goods and services, because labor is the driving cost at many levels of the supply chain. If robots can build a house on land you already own from natural resources mined and refined onsite, using solar power, the cost of building that house is close to the cost to rent the robots. And if those robots are made by other robots, the cost to rent them will be much less than it was when humans made them.
Similarly, we can imagine AI doctors that can diagnose health problems better than any human, and AI teachers that can diagnose and explain exactly what a student doesn’t understand.
“Moore’s Law for everything” should be the rallying cry of a generation whose members can’t afford what they want. It sounds utopian, but it’s something technology can deliver (and in some cases already has). Imagine a world where, for decades, everything–housing, education, food, clothing, etc.–became half as expensive every two years.
We will discover new jobs–we always do after a technological revolution–and because of the abundance on the other side, we will have incredible freedom to be creative about what they are.
Part 3
Capitalism for Everyone
A stable economic system requires two components: growth and inclusivity. Economic growth matters because most people want their lives to improve every year. In a zero-sum world, one with no or very little growth, democracy can become antagonistic as people seek to vote money away from each other. What follows from that antagonism is distrust and polarization. In a high-growth world the dogfights can be far fewer, because it’s much easier for everyone to win.
Economic inclusivity means everyone having a reasonable opportunity to get the resources they need to live the life they want. Economic inclusivity matters because it’s fair, produces a stable society, and can create the largest slices of pie for the most people. As a side benefit, it produces more growth.
Capitalism is a powerful engine of economic growth because it rewards people for investing in assets that generate value over time, which is an effective incentive system for creating and distributing technological gains. But the price of progress in capitalism is inequality.
Some inequality is ok–in fact, it’s critical, as shown by all systems that have tried to be perfectly equal–but a society that does not offer sufficient equality of opportunity for everyone to advance is not a society that will last.
The traditional way to address inequality has been by progressively taxing income. For a variety of reasons, that hasn’t worked very well. It will work much, much worse in the future. While people will still have jobs, many of those jobs won’t be ones that create a lot of economic value in the way we think of value today. As AI produces most of the world’s basic goods and services, people will be freed up to spend more time with people they care about, care for people, appreciate art and nature, or work toward social good.
We should therefore focus on taxing capital rather than labor, and we should use these taxes as an opportunity to directly distribute ownership and wealth to citizens. In other words, the best way to improve capitalism is to enable everyone to benefit from it directly as an equity owner. This is not a new idea, but it will be newly feasible as AI grows more powerful, because there will be dramatically more wealth to go around. The two dominant sources of wealth will be 1) companies, particularly ones that make use of AI, and 2) land, which has a fixed supply.
There are many ways to implement these two taxes, and many thoughts about what to do with them. Over a long period of time, perhaps most other taxes could be eliminated. What follows is an idea in the spirit of a conversation starter.
We could do something called the American Equity Fund. The American Equity Fund would be capitalized by taxing companies above a certain valuation 2.5% of their market value each year, payable in shares transferred to the fund, and by taxing 2.5% of the value of all privately-held land, payable in dollars.
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