The Doom Loop of AI Automation: A Faustian Bargain?
The Faustian Bargain of Automation
This week, AI has captured the spotlight—from CES to the pages of the Wall Street Journal, and across tech giants' agendas. The promise of AI is clear: it's set to automate the mundane, repetitive tasks that define much of what we call work. Let's entertain the scenario where AI truly fulfills its potential.
Imagine a world where business owners can replace human employees, with their high costs, health insurance, and pension plans, with AI agents. These AI agents come with significant advantages: they don't complain, need no breaks, work around the clock without holidays, and are highly programmable. Their capabilities in vision, comprehension, and action have grown leaps and bounds since their inception.
This shift promises reduced operational expenses for businesses, a prospect that Wall Street eagerly anticipates for boosting quarterly earnings. But what are the implications for the workforce?
Consider the contact center industry, which in 2023 employed about 2.86 million people in the U.S., with average salaries ranging from $31,000 to $34,000, contributing roughly $88 billion to the economy in taxable and disposable income. If AI automation replaces these jobs, what happens next?
These workers are not just numbers; they are consumers who enjoy a beer at the local bar, dine at Applebee's, take vacations, and pay mortgages. Their income supports local and national economies, contributing through taxes to federal, state, and local governments. If their jobs vanish due to AI, what becomes of them?
While there were 8.1 million job openings reported in November 2024, not all will match the skill set or availability of displaced contact center workers. An increase in unemployment could lead to a broader economic impact:
Reduced Consumer Spending: With less disposable income, there would be fewer purchases—less beer, fewer Oreos, and fewer vacations. This decline in spending directly affects businesses, leading to lower revenues.
The Doom Loop: As consumer spending drops, companies face revenue shortages, prompting further cost-cutting measures. This often means more automation, leading to more job losses, which in turn reduces spending even further. It's a self-reinforcing cycle of economic downturn.
This scenario eerily resembles a Faustian Bargain. Here, the "deal with the devil" involves sacrificing human labor and livelihoods for the sake of short-term innovation and profit. The consequences of this bargain might not be immediately visible but could set off a chain reaction with repercussions we might not fully understand until it's too late.
We must consider the human cost of our technological advances. Each decision to automate could be another domino falling in a sequence that might destabilize our economic and social fabric. As consumers and citizens, our daily choices—where we spend our money, what products we support, and the discussions we engage in—matter more than ever.
Let's think critically about the future we're crafting with our technology. Are we building towards a society that values human contribution, or are we inadvertently creating an economic doom loop where the pursuit of efficiency eclipses human welfare?