Gen Z has a love/hate relationship with artificial intelligence. They fear it and embrace it at the same time. Most of the fear is the result of no one possessing the ability to peer into the future and see how AI is going to affect us as individuals, as workers, and as human beings.
Intelligence in market societies has always been the golden key that unlocks the door to prosperity. Someone who is smarter almost always rises above those of average intelligence. As Glen Loury points out in UnHerd that "the uncomfortable reality is that differences in human cognitive capacity continue to drive large differences in economic outcomes." Almost without fail, those who are smarter do better.
For Gen Z and the rest of us, the biggest question — and source of anxiety — provoked by AI is its effects on economic outcomes: who will thrive, and who will be displaced?
"Will firms require far less human labor to produce greater output, consigning vast swaths of workers to the margins?" asks Loury. "Or will entirely new forms of work emerge, sustaining broad-based prosperity?"
That latter scenario would be ideal. The AI workplace may start out like scenario #1 and eventually evolve into #2.
We don't know. That's why the anxiety generated about the revolution currently underway is so profound. The advent of the automobile probably made blacksmiths and carriage makers nervous, but for those willing to learn a new skill, it probably wasn't an existential threat.
Artificial intelligence promises to eliminate entire swaths of people who aren't smart enough to survive in an AI workforce. Cognitive ability is not a skill to be learned. You either have it, or you don't.
Loury wonders "how artificial intelligence will interact with natural human intelligence — and thus how it will reshape the relationship between cognitive ability and economic reward."
Crucially, this isn’t simply a question about what AI is, as a technology. It is a question about how it is used, and by whom. Whether AI widens or narrows inequality will depend not only upon its technical capabilities, but on the social and developmental conditions that determine who is able to use it effectively.
"The social and developmental conditions" that maximize the ability of someone to use AI effectively are not found in poor neighborhoods or single-parent households, or in below-average schools.
"People fear the emergence of a permanent over-class of AI-enhanced cognitive elites, with the majority relegated to precarious and lower-value work," writes Loury.
This is why I believe that in the next two years, before the AI revolution moves beyond the ability to legislate and regulate it, Congress will step in. That will promptly throw a monkey wrench into the widespread adoption of AI and prevent companies from fully utilizing AI agents to allow people to work smarter.
This goes to the heart of the debate over AI. Will artificial intelligence primarily amplify human intelligence or replace it? Will it complement intelligence or replace it?
In this world, where AI and human intelligence are complements, exceptional minds multiply their output, while routine cognitive tasks — data entry, basic analysis, even portions of coding — are increasingly automated. The result is a steeper earnings curve, with modest differences in cognitive ability yielding large differences in income. We’ve seen glimpses of this already. Tech giants like Google and OpenAI are hoovering up talent, paying premiums for the brightest, while entry- and mid-level jobs in fields like journalism or graphic design face AI encroachment. At the same time, the economic rents generated by frontier AI systems may accrue disproportionately to a small number of firms and their owners, further concentrating rewards.
But there is another possibility. Artificial intelligence might instead function as a substitute for certain forms of human cognition. In that case, it would reduce the premium placed on raw intellectual ability by making high-level performance accessible to a broader population.
Loury writes that "the decisive factor will not be the machine itself, but the social arrangements through which human capacities are formed and deployed."
Given history and what we know of politics, Congress will see to it that whatever inequalities arise as a result of AI use, the technology will never reach its potential unless those who use AI can find a way to "share the wealth" and not get too far ahead of the rest of us economically.
