Billionaire businessman Elon Musk sparked debate on Friday after suggesting artificial intelligence would soon ‘solve’ inflation by creating an extreme abundance of resources. He also suggested that governments provide high-level universal payments to sustain citizens made redundant by AI. The remarks prompted vehement pushback from several quarters — including Indian economist Sanjeev Sanyal.
“He is so wrong on this. AI will certainly cause dislocation, but like all technology it will also create new jobs and opportunities in the medium term. AI and robots will also not produce goods and services in excess of money or demand that there will be no inflation. Both of these are classic mistakes made by those who think that there is a finite number of jobs to be done in the world and a finite set of consumer demands,” he wrote on X.
Sanyal, who currently serves as a Member of the Economic Advisory Council to the Prime Minister, said the same logic would erroneously imply there was “no jobs or inflation in the 21st century”.
“By their logic, we have already exceeded everything that even the wealthiest person could have imagined in 1800, so there should be no jobs or inflation in the 21st century. By the same token, Elon Musk’s universal high income will bankrupt any government that attempts it,” he added.
What had Musk said?
The world’s richest man suggested on Thursday that AI-driven productivity was leading towards an era of extreme abundance. He argued that there would soon be a massive surplus of goods — automatically preventing inflation — and made the case for the government to provide high-level universal payments to sustain citizens.
“Universal high income via checks issued by the Federal government is the best way to deal with unemployment caused by AI. AI/robotics will produce goods and services far in excess of the increase in the money supply, so there will not be inflation,” he wrote on X.
What does ‘universal high income’ mean?
The concept has been popularised by Musk and a few other ‘futurists’ in recent years — a somewhat tangential counterpoint to the economic theory of Universal Basic Income. OpenAI CEO Sam Altman also appears to envisage a similarly AI-led future for humanity. He has previously spoken about ‘universal extreme wealth’ for all Americans
“I think society will very quickly say, ‘Okay, we got to have some new economic model where we share that and distribute that to people.’ I used to be really excited about things like UBI. I still am kind of excited, like, universal basic income, where you just give everybody money…What I would want is, like, an ownership share in whatever the AI creates — that I feel like I’m participating in this thing that’s going to compound and get more valuable over time…This would amount to universal basic wealth — better than universal basic income. And I think I don’t like basic either. I want, like, universal extreme wealth for everybody,” Altman told comedian Theo Von during an interaction last year.