In the 1990s, Vice President Al Gore was the spokesperson and proponent of the “information superhighway” (which was later called the internet).
October 26, 1993 issue of the New York Times: “One of the technologies Vice President Al Gore is pushing is the information superhighway, which will link everyone at home or office to everything else -- movies and television shows, shopping services, electronic mail and huge collections of data.”
So the government spent substantial money on broadband/ fiber optic cables to enable the spread of the internet, eliminated various regulations, expanded the airwaves for retail cellular networks, etc.
We have all seen the results of having an intricately connected world wide web. The most valuable companies of this globe: Microsoft, Apple, Alphabet (the owner of Google), Amazon, Facebook (owned by Meta) etc all are due to this incredible vision that was laid out in the 1990s. And the vision and forecasts proved to be exceptionally accurate. One of the best cases of a new technology prediction matching reality.
Back in the 1990s, there was a cautionary concerned group who said, the lower educated and rural areas of the United States will be economically disproportionately impacted. These areas had already fallen behind the urbanized industrialized areas.
The business community, economists, policy makers and their lobbyists touted there would be a large amount of “internet tax” revenues from internet carriers and the resulting new internet-enabled businesses. This money would be used specifically for public schools in rural and low-income areas so that students would become the information technology (IT) workers essential for the new economy. This was the internet dividend.
According to UK based non-profit, Fair Tax Foundation publication dated June 1, 2021:
- Between 2011 and 2020, Amazon, Facebook, Alphabet , Netflix, Apple, and Microsoft -- known as the "Silicon Six" -- paid roughly $219 billion in income taxes, which amounts to just 3.6% of their $6 trillion-plus in total revenue. Income tax is paid on profits, not total revenue, and researchers said these tech giants are adept at reducing their tax liabilities by shifting profits to offshore tax havens.
- Had the "Silicon Six" paid the prevailing tax rates in the countries where they operate, they would have given global tax authorities over $149bn more than they did over the past decade, researchers said. Moreover, not only did these corporate behemoths fork over nearly $150bn less than would be expected under a stronger international taxation regime, but they also inflated the value of the tax payments they did make.
Tax avoidance by the “new economy” tech companies became an enhancement to the already prevailing tax avoidance culture embedded in the multinationals of the pre-internet companies. While there is a lot of public support to make all profitable corporations pay fair share of taxes, there is doubt any material changes will be made.
I used a very well documented era in our most recent history where we have direct evidence of unleashing a new technology. Artificial Intelligence (AI) is being developed and commercialized by the same cohort of technology companies, and their Wall Street cheerleaders, who are adept at providing huge payment packages to small groups of executives, avoiding paying taxes, and lobbying against regulations.
Machine learning allows amalgamation of all existing knowledge of a job so the AI will become a pretty good entry level accountant. The key difference between the AI accountant and human accountant is that the human being needs to eat, sleep, clean, take care of a child, and spend time with friends.
Chances are the human accountant is wasting time on dating apps, or likes to play football on the weekends, has to help out his grandfather, and weekly just browses Netflix for hours. The human accountant is not spending each minute of the day learning every specific item in accounting and related fields.
Whereas the AI accountant is doing exactly that -- continuously learning and continuously getting better at being an accountant. AI will suppress the human accountant's skills within a period of time.
Unlike a human employee, AI does not need annual vacation, health benefits, retirement funds, or any other perks. The best thing about AI is it does not “quit.” Many managers say, just when she had the right team and right level of projects that suited everyone's skills and interests, one of the employees resigned because he got a higher paying job.
With AI there is less uncertainty of skill loss. So another reason why reliable AI will over time eliminate the human worker. AI can do the role with focus, consistency, accuracy, and reliability which human beings are not able to or not willing to do. It is inevitable that AI will make certain segments of skilled human workers redundant and unnecessary.
Who will provide a reasonable unemployment benefit or universal income or funds for a re-tooling and re-education program for these unemployed human beings? Where is this “free money” coming from?
Does anyone think the tech company shareholders, who will be investing billions developing the AI, will be enthusiastic to just reduce their EPS by donating money for public education programs?
They didn't bother to do so for the last three decades so why should their behaviour change? If anything, the existing tech companies and other rising new ones will be in fierce competition to release the top performing AI from their own shops.
There is no solid tax program nor public education agenda amongst lawmakers to design a program for the upcoming generation who will be displaced by AI.
The mindset and culture of the venture capitalist, private equity, stock market, and oh yes, the crypto scam fueled financial markets, is to amass as much wealth as possible.
The “1%” have no desire to share with the bottom 50%. Lawmakers won't get voted in if they state they will increase taxes on this 1%. If anything, lawmakers are busy taking Instagram photos with the 1% and themselves are part of the 5%.
My worry is AI will take away the imperfect yet useful work that a human being does and reduce the person's self-worth. Not everyone can become an exceptionally skilled worker or highly talented creative artist who is irreplaceable by AI.
There is nothing wrong in being a reasonably average accountant in a midsize company or local government entity. Yet AI will take over many white-collar skilled roles. While with outsourcing and immigration jobs went from one set of humans to another, this time the jobs will no longer stay with human beings.
Lubna Kabir has over 25 years of experience leading US and international projects in first line of defense risk management, integrated internal audit, strategy, and financial analysis.