President’s Column: Technological Innovations and Creative Destruction

Lessons from this year’s Nobel Prize recipients

Artificial intelligence (AI) has been ubiquitous in the 2024 media. Its popular, daily use by the general public aside, perhaps nowhere has its impact been felt so significantly than is reflected in the 2024 Nobel Prizes.

This year, several prizes were awarded for work related to AI, artificial neural networks, and computational design, including the Physics, Chemistry, and Economics Prizes. For instance, John Hopfield and Geoffrey Hinton received the Physics Nobel for “foundational discoveries and inventions that enable machine learning with artificial neural networks” (nobelprize.org). In Chemistry, David Baker, Demis Hassabis, and John Jumper earned the 2024 Nobel for advances in computational protein design and protein structure prediction (Two 2024 Nobel Prizes Honor Researchers Innovating in AI, Machine Learning, 2024; Figure 1).

Arguably the first AI-related Nobel Prize went to a psychology professor: Herbert A. Simon,  a University of Chicago polymath who earned his doctorate in political science, was a psychology professor at Carnegie Mellon, and was winner of the 1978 Nobel Prize in Economics (Rich, 2012; Figure 2). One of Simon’s signature contributions was his work in early AI such as chess-playing programs and GPS (general problem solver) software and logic; while that technology seems archaic today, it was cutting edge at the time and also reflects some of the same social issues that today’s AI presents, in terms of opportunities and risks.

The 2024 Nobel Prize in Economics was shared by another University of Chicago associated scholar, James A. Robinson, along with Daron Acemoglu and Simon Johnson, for work examining the “importance of societal institutions for a country’s prosperity. Societies with a poor rule of law and institutions that exploit the population do not generate growth or change for the better” (www.nobelprize.org). Relevant to this article and to our Society for Media Psychology and Technology, these laureates discuss how technological innovation (including AI), and economic and political controls related to such innovation, promote positive social change, or alternatively, can lead nations to fail (Acemoglu & Robinson, 2012).

In particular, Acemoglu and Robinson (2012) drew on the work on “creative destruction” by the economist Joseph Schumpeter (p. 84). Schumpeter argued that economic growth and technological innovation are associated with creative destruction as these new technologies replace old technologies, and there is often resistance by some parties, as the new technologies may render existing jobs, skills, and economies obsolete. Thus, while inclusive economic and political institutions may be healthiest in the long run, fears and anxieties over changes related to the new technologies often block acceptance of them by traditional power elites, such as monarchs, aristocrats, land owners, or authoritarian governments.

In their sweeping study of Why Nations Fail, Nobel Laureates Acemoglu and Robinson (2012) noted several historical examples of creative destruction and the fears of existing elites to innovative technological change. For instance, among those actively protesting technological change were the Luddites¹ (Figure 3); in 1753 they burned the home of John Kay, who invented the flying shuttle to improve the mechanization of weaving (Figure 4). As another example, in 1589 William Lee invented a “stocking frame” knitting machine to help mechanize production; he attempted to patent it but both Queen Elizabeth and her successor James I refused, fearing the new technology “would throw people out of work, create unemployment and threaten royal power” (p. 183). Another well-known example concerns Dionysus Papin and his 1705 invention of the steamboat; Papin aimed to take the boat down river, which was controlled by the monopoly of the boatmen’s guild. The boatmen, fearing being replaced by the new invention, ultimately destroyed Papin’s boat and the inventor died in poverty (p. 203). Fears of new technologies persist in the present day. The Unabomber Ted Kaczynski could be considered a modern day Neo-Luddite for example. His rustic shack in Montana is seen here in Figure 5.

As Acemoglu and Robinson (2012) emphasized in their book, a key finding is that new technologies may lead societies to become more prosperous, but also threaten existing political power elites—and since the creative destruction typically erodes existing economic privileges of some advantaged groups, existing elites are often motivated to block such innovations such as through restrictive laws and policies. Nations with extractive rather than inclusive institutions, such as the exploitative systems led by white planters in colonial 17^th and 18^th century Jamaica and Haiti, may survive in the short run, according to these authors, but eventually, their economies will stagnate when there is “a need to shift to new economic activities, which threatened both the incomes and the political power” of the elite (p. 92). While my reading of Haitian historiography indicates the situation was more nuanced (for instance there were dynamics between white planters, petits blancs, free coloreds, free blacks, and enslaved persons in St. Domingue), Acemoglu and Robinson made a compelling overall argument for the unsustainability of extractive institutions (Dubois, 2005; James, 1938; Figure 6 and Figure 7).

In his recent book The Confounding Island, Jamaican-American Orlando Patterson (2019), a Harvard sociologist and former Special Advisor to Jamaican Prime Minister Michael Manley, drew on some of the ideas of Acemoglu, Johnson, and Robinson to explore the divergent paths taken in Barbados versus Jamaica post-colonialism and post-emancipation. Both countries had similar institutions, such as private property protections, the English language, parliamentary democracy, English Common law, and the Anglican Church (p. 28), but Barbados has been wealthier than Jamaica despite similar histories of exploitative extractive institutions and the fact both achieved independence in the 1960s. For instance, per capita GDP in Barbados in 2000 was $22,694, but just $5,819 in Jamaica (Getachew, 2020). Patterson analyzes the divergence and concludes though both were plantation economies, Barbados had a greater number of planters and more women than men enslaved, and this led to a setting for greater institutional and family stability and continuity and ultimately greater social integration and more of a “single cultural system” (Patterson, 2019, p. 78) than Jamaica. Furthermore, post-emancipation, Barbados had more inclusive political representation and a social system that continued with more stability post-emancipation, also leading to greater literacy and per capita GDP at independence (Figure 8). Like Acemoglu and Robinson, Patterson viewed positive social institutions—ones that are inclusive rather than extractive—as more aligned with prosperous nations and populations in the long run.

The relevance of this Nobel-winning program of economics to Media Psychology and Technology is clearly evident. In sum, regardless of the technology, the sociocultural economic and political context matters, and will largely impact whether the emerging innovations lead to greater inequality and exploitive extraction by existing power elites, or whether these new technologies will lead to positive social change and greater prosperity for more nations, groups, and individuals. Acemoglu and Johnson have recently been focused more specifically on how AI and automation will impact labor and the well-being of societies (Brown & Mayor, 2024).

As the work of Acemoglu, Johnson, and Robinson makes clear, new technologies can provoke feelings of anxiety and fear, and indeed the process of creative destruction can be painful and disruptive, even if the ultimate result is a more inclusive, prosperous society for more persons. Concerning technology, a society where anything goes may devolve to authoritarianism, and exploitative, extractive practices, and thus Acemoglu and Johnson (2023) have argued that decisions about these new AI technologies and other automation tools should not be “left to a handful of entrepreneurs and engineers” (Brown & Mayor, 2024). Acemoglu and Johnson, along with their colleague David Autor, suggested that policy guardrails should be set to encourage AI technologies to complement and support human labor, such as potentially: equalizing tax rates on employing workers and on owning AI technologies to close the gap between human and machine; and creating a government AI center to share knowledge between regulators and policymakers (Brown & Mayor, 2024). Of course, too much authoritarian control stifles innovation, and there will likely always be a need for human risk-taking, entrepreneurship, and creativity, such as is reflected in personality dimensions such as openness to experience and thrill-seeking (e.g., Morehouse et al., 1990; Shiraev, 2023). The challenge may be to balance protections for the public with motivational structures that stimulate technological innovation.

To conclude, despite understandable and legitimate social and personal anxieties related to the uncertainties of technological change, especially the latest AI, it is worth noting words from Acemoglu soon after winning this year’s Economics Nobel. “We are in the age of AI,” the laureate states, “but I remain convinced that human productivity, human ingenuity, and human resources broadly construed are still key to the meaningful flourishing of countries” (Brown & Mayor, 2024). May the Society for Media Psychology and Technology be part of this flourishing.

References

Acemoglu, D., & Robinson, J. A. (2012). Why nations fail. Penguin Random House.

Acemoglu, D., & Johnson, S. (2023). Power and progress. Public Affairs.

Brown, S., & Mayor, T. (2024, October 14). Insights from MIT’s newest Nobel laureates on AI, labor, and more. MIT Sloan. Retrieved from https://mitsloan.mit.edu/ideas-made-to-matter/insights-mits-newest-nobel-laureates-ai-labor-and-more

Dubois, L. (2005). Avengers of the New World: The story of the Haitian Revolution. Harvard Belknap.

Getachew, A. (2020, September 21). Orlando Patterson’s modern world. The Nation. Retrieved from   https://www.thenation.com/article/world/orlando-patterson-the-confounding-island/

James, C. L. R. (1938). The Black Jacobins. Vintage.

Morehouse, R. E., Farley, F. H., & Youngquist, J. V. (1990). Type T personality and the Jungian classification system. Journal of Personality Assessment, 54 (1–2), 231–5. doi:10.1207/s15327752jpa5401&2_22

Nobel Prize. (2024). Retrieved from https://www.nobelprize.org/

Patterson, O. (2019). The confounding Island: Jamaica and the Postcolonial predicament. Harvard Belknap.

Rich, G. (2012). Herbert Alexander Simon. In R.W. Rieber, (Ed.), Encyclopedia of the history of psychological theories. Springer.

Shiraev, E. (2023). Personality (2^nd Ed.). Sage.

Two 2024 Nobel Prizes Honor Researchers Innovating in AI, Machine Learning. (2024, October 21). Retrieved from https://ai.northeastern.edu/news/two-2024-nobel-prizes-honor-researchers-innovating-in-ai-machine-learning

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¹ These days, the term Luddite refers to anyone who loathes new technologies; originally though, it referred more specifically to a 19^th century movement; Acemoglu and Robinson (2012) appear to use the term in its broader, current sense. Though it is undeniable that violent mobs and lawfare targeted the new technology and those associated with it, historians debate the specifics of some of the anecdotes reported here by Acemoglu and Robinson concerning inventors Kay and Lee.