Will AI Generate a New Growth Wave of Creative Destruction? | Herman Mark Schwartz

Hidden Forces

Demetri Kofinas

Government, Business

4.8 • 1.6K Ratings

🗓️ 9 December 2024

⏱️ 60 minutes

🔗️ Recording | iTunes | RSS

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Summary

In Episode 393 of Hidden Forces, Demetri Kofinas speaks with Herman Mark Schwartz, a professor in the Politics department of the University of Virginia and the author of three books on economic development, globalization, and the geopolitics of the subprime mortgage crisis.

Demetri and Mark discuss an article that he recently co-authored in American Affairs about AI’s potential to create a new growth wave of creative destruction that could rival or surpass those of previous innovation cycles, with enormous implications for business, society, and the role of government in the economy. They discuss what these so-called “Schumpeterian” growth waves typically look like, how they create complex interactions across all facets of the economy, and how they ultimately exhaust themselves, making room for the birth of a new innovation cycle.

In the second hour, Mark and Demetri apply this framework to the growth wave that we have been living through for more or less the last 50 years and which now appears to be in the late stages of endogenous decay. They examine three scenarios for what might come next. The first is an extension of the current wave, the second is a new paradigm driven by AI as the key general-purpose technology, and the third is neither an extension of the current wave nor a transition to a new paradigm, but rather a series of crises characterized by commodity shortages, energy insecurity, political polarization, and global conflict.

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Episode Recorded on 12/02/2024

Transcript

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0:00.0	What's up, everybody? My name is Demetri Gaffinas, and you're listening to Hidden Forces,
0:06.0	a podcast that inspires investors, entrepreneurs and everyday citizens, to challenge consensus
0:12.7	narratives, and learn how to think critically about the systems of power shaping our world.
0:18.7	My guest in this episode of Hidden Forces is Herman Mark Schwartz,
0:22.5	a professor in the politics department of the University of Virginia and the author of three
0:27.5	books on economic development, globalization, and the geopolitics of the subprime mortgage crisis.
0:34.3	I asked Mark on the podcast to discuss a recent article he co-authored in American Affairs
0:39.1	about AI's potential to create a new growth wave of creative destruction that could rival
0:44.8	or surpass those of previous innovation cycles with enormous implications for business, society,
0:51.1	and the role of government in the economy. Mark and I spend the first hour of our
0:55.8	conversation discussing what these so-called Schumpeterian growth waves typically look like,
1:01.0	how they create complex interactions across all facets of the economy, and how they
1:05.4	ultimately exhaust themselves, making room for the birth of a new innovation cycle. In the second hour, we apply this
1:13.3	framework to the most recent growth wave we have been living through, whose earliest origins
1:17.8	begin with U.S. industrial and defense policy in the 1960s and 70s, and which now appears to be in
1:23.9	the late stages of endogenous decay. We examine three scenarios for what might come next.
1:30.3	The first is an extension of the current wave.
1:32.3	The second is a new paradigm driven by AI as the key general purpose technology.
1:38.3	And the third is neither an extension of the current wave nor transition to a new paradigm, but rather a series of crises
1:46.0	characterized by commodity shortages, energy insecurity, political polarization, and global conflict.
1:53.1	If you want access to that part of the conversation, and you're not already subscribed to Hidden Forces,
1:58.3	you can join our premium feed and listen to the second hour
	...

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