Nobel Prize-winning economist — Daron Acemoglu argues that AI’s impact on shared prosperity depends on how we develop and use it. To address the crisis in liberal democracy, he proposes working-class liberalism: a philosophy built on workers’ well-being, community agency, and individual freedom as in his new book out — ‘What Happened to Liberal Democracy’.
Three Pillars of Working-Class Liberalism
- Shared prosperity: Create good jobs and improve livelihoods for workers without college degrees, including those in manual work, services, and trades.
- Community agency: Give communities room to govern themselves, explore their values, and shape decisions that affect them.
- Liberal principles: Protect personal freedom and free expression and give people a say in their future.
Why Liberal Democracy Needs a New Approach
Acemoglu argues that existing political frameworks have failed to meet the challenges of the post-industrial era. As shared prosperity has declined, more people have come to see liberal democracy as serving an elite establishment, fuelling anti-establishment sentiment.
Signs of the Crisis
- Digital technologies and globalization have weakened the link between business growth and rising worker pay.
- Technology often takes over workers’ tasks instead of strengthening their skills and abilities.
- The widening gap between college-educated urban elites and workers without college degrees contributes to political divisions and declining trust in institutions.
What Needs to Change
- Connect growth with better livelihoods — ensure economic expansion brings better wages and working conditions, especially for workers without college degrees.
- Build a shared governing philosophy — rebuild institutions around common values and a vision for a better society, as social democracy did for the industrial age.
- Restore community self-government — give communities more control over their future while making good jobs and better working conditions economic priorities.
AI That Supports Workers
- The goal — give workers relevant, context-specific information that expands their expertise rather than replaces them.
- The challenge — current economic models and major technology companies’ priorities favour artificial general intelligence (AGI) and automation-heavy systems. Acemoglu warns that this approach risks making workers feel dispensable.
Practical Steps Toward Pro-Worker AI
- Include the public — give people a voice in AI development rather than leaving decisions solely to technology-company leaders.
- Monitor labour’s share of income — Acemoglu views a declining share as a warning that firms may be investing too heavily in automation.
- Reform policy incentives — change tax systems that favour automation over human labour, protect data, and support socially productive innovation
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