Today’s Financial Times reports that tech billionaire Elon Musk told UK prime minister Rishi Sunak there “will come a point where no job is needed”, adding that “AI will be able to do everything”.

Economists such as Richard Baldwin contest this view as “linear thinking (on jobs) in an exponential world” and point to the history of previous technological upheavals, namely the shift from farms to factories and the shift from factories to offices, where fears that there would be no more jobs were proved wrong.

Is this time different?

In Understanding the New Global Economy (p. 55-57), I have devoted a section to this issue. The major takeaways are:

1. New technologies, such as robots and AI, can be labor-replacing or labor-enhancing. In the latter case they make workers more productive. Just think of AI-assisted surgery.
2. Technological development in manufacturing often focuses on automating tasks and thus favors the replacement of humans by machines. Acemoglu and Restrepo (2018) argue that only if these technologies also boost productivity, as it was the case in the aftermath of the Industrial Revolution, this could boost production and labor demand. If the second effect offsets the first, net job losses can be avoided.
3. Recent technological developments in robotics and AI are often designed to replace rather than enhance labor, hence, there is indeed now a real risk of rendering jobs obsolete.
4. However – and this is crucial – net job losses can be avoided when we use proper incentives for directing technology to make workers more productive, and if workers are empowered to claim their fair share of the productivity.

In sum, AI must not make jobs obsolete. Rather, it is a question of societal choice:

• On the one side, there is the vision of a fully automated world. It is prominent with tech people. It features jobless economies and a universal basic income (UBI) as a substitute for labor income, probably even on a global scale as envisioned by OpenAI’s CEO Sam Altman in his cryptocurrency project Worldcoin, where you receive cryptocurrencies conditional on a scan of your eyeballs, which is viewed as a first step towards a global UBI.
• On the other side, there is the idea of shared property based on inclusive development with better, more productive and well-paid jobs. This requires (re-)directing technologies with the right economic incentives, public investment in R&D, a supportive institutional framework and a participatory society in which productivity gains benefit people rather than enriching some elites, as Acemoglu and Johnson have recently argued.

It may well be that Elon Musk’s prediction will come true if society puts technological progress entirely in the hands of people like him.

But a different, more inclusive future is possible. We just have to take it into our own hands.