The AI Jobs Scare Meets 250 Years of Data

American Enterprise Institute

James Pethokoukis

Article

7 Pages

Why do economists generally seem more cautious than many folks in Silicon Valley about the potential economic impacts of artificial intelligence? One big reason: Their baseline case is informed by economic history, a hardly unreasonable starting point when dealing with an important new innovation.

Key Takeaways

Finding #1: Canals and early factories accelerated America beyond its agrarian roots, cutting farm employment from 75 percent to just over half by 1850.
Finding #2: Railroad investment averaged 2.5 percent of GDP annually, connecting regional markets into a continental economy.
Finding #3: The internet era roughly doubled productivity growth in the late 1990s, shifting investment from factories and structures toward software and intellectual property.
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