Alex Imas on Why Economists Might Be Getting AI Wrong
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In this episode of Odd Lots, hosts Joe Weisenthal and Tracy Alloway welcome Alex Imas, a professor of economics and applied AI at the University of Chicago, to discuss why economists may be underestimating the transformative impact of AI on the labor market. Imas challenges the conventional economic narrative that AI will follow historical patterns of technological disruption—creating new jobs to offset those lost—arguing instead that AI’s generality and speed make it fundamentally different. He emphasizes that job exposure to AI isn’t just about task automation, but about the interdependence of tasks (complementarity) and the elasticity of consumer demand. Using examples like warehouse automation and software engineering, Imas illustrates how firms may have strong incentives to fully automate low-complexity, high-volume jobs, especially when they’re not tied to other critical functions. He also introduces the idea that AI agents may develop persistent behavioral patterns through 'skill files,' raising ethical and economic concerns about how mistreatment during training could affect performance. The conversation turns to broader societal implications, including the risk of rapid job displacement outpacing new job creation, and the need for bold policy responses like expanded capital ownership or universal basic income. Imas concludes with a provocative economic insight: in an age of abundance, scarcity will shift from goods to time and health, making these the new economic priorities.
AI’s generality and speed make it unlike past technologies—automation could happen faster than new jobs can emerge.
Job exposure to AI depends not just on task automation, but on task interdependence (complementarity) and consumer demand elasticity.
Firms are more likely to automate jobs that are isolated and single-purpose, especially if full replacement yields cost savings.
AI agents may develop persistent 'memories' via skill files, meaning mistreatment during training could affect future performance.
The future economy may be defined not by scarcity of goods, but by scarcity of time and health.
…and 2 more takeaways available in PodZeus
The Limits of Historical Analogies in AI Economics
The hosts open by questioning the common economist refrain that AI will follow past patterns of technological disruption—destroying jobs but creating new ones. They express frustration that no one can clearly name the new jobs AI will create, and suggest we may be heading toward a future of 'performative humanity' where social skills and branding matter more than technical expertise.
Alex Imas on the Generality of AI and Early Predictions
“Once you started using it, you saw that it was able to basically not so well in the very, very beginning. But even after a few months and like within a year, you saw that it was able to kind of do basic cognitive tasks to a decent degree.”
Deconstructing Job Exposure to AI
“If I fail to pull the lever correctly, the other part of my job is unaffected. There's other parts of the job, like cooking, for example. Let's say I'm really good at 90% of the job, but I really screw up the seasoning. That meal tastes like garbage. Garbage, right? You haven't succeeded in your tasks.”
The Role of Consumer Demand and Firm Incentives
“If the consumers don't respond by buying a lot more of the product, the firm is going to fire a bunch of people because they can do more with less.”
The Future of Work: From Trucking to Software Engineering
“These are very, you know, these are some of the only jobs truck driving where, you know, you don't need a college degree to earn a lot of money. And so there's a big incentive on the company.”
“The number one question of economics in the age of advanced AI is what becomes scarce, right? Everybody's talking about like abundance. We're going to have abundance. Sure, we're going to have abundance of some things, but some things are going to remain scarce.”
“If you go in there and lobotomize it, in a way that model, the reason it started acting like Mecca Hitler is because they were trying to make it less woke, right? So that's the equivalent of lobotomizing a human being and saying, hey, I'm going to take that part out of its brain. Guess what happens to that person?”
“If I fail to pull the lever correctly, the other part of my job is unaffected. There's other parts of the job, like cooking, for example. Let's say I'm really good at 90% of the job, but I really screw up the seasoning. That meal tastes like garbage. Garbage, right? You haven't succeeded in your tasks.”
Hosts
Guest
Alex Imas
person
Joe Weisenthal
person
Tracy Alloway
person
Bloomberg
organization
ChatGPT
product
Vanguard
organization
OpenAI
organization
Mythos
product
Claude Code
product
Eliezer Yudkowsky
person
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