The recent release of ChatGPT and, even more recently, GPT-4 has demonstrated the power and productivity of generative artificial intelligence (AI). Now, generative AI engines can write articles, file taxes, understand images, as well as match or even exceed human performance on many other tasks.
More importantly, generative AI engines are still rapidly evolving, and we can expect AI to disrupt more industries in the near future. The technology industry is very excited about the development of generative AI and is actively discussing how to use generative AI for various business opportunities.
The dark side of generative AI is that it is going to replace many jobs, starting with jobs in the service sector, such as accountants, bank tellers, insurance agents, administrative assistants, customer service personnel, and many more. If the invention of steam engines 300 years ago marked the beginning of the industrial revolution, then the invention of ChatGPT may mark the beginning of the service revolution today. We live in the exciting era of the transition of all human society through the service revolution, but transitions are always painful, as people in the era of the industrial revolution experience them, no matter how promising the future.
AI will bring social changes in China, just like any other country. How could the Chinese government adapt to these changes?
Looking at China today, the agricultural sector contributes 7.9 percent of GDP, the industrial sector 39.4 percent, and the service sector a whopping 53.3 percent. In addition, 22.9 percent of China’s labor force is employed in the agricultural sector, 29.1 percent in the industrial sector and 48 percent in the service sector. Thus, the services sector is the largest sector in the country, with the highest GDP per capita and the majority of the labor force participating in this sector.
With half the population in the service sector, any change in this industry will have a major impact on China’s social stability, especially a disruptive change brought about by generative AI. Many Chinese parents invest enormous amounts of resources in their children’s education to secure them high-level administrative jobs in the service sector. For this generation of anxious parents, by the time their children complete college, AI may have already taken over these jobs.
However, before we examine the impact of AI on Chinese society, let’s review China’s longstanding social contract between the state and the people from a historical perspective. Until a few decades ago, China had always been an agricultural nation, so for thousands of years the main production resource was land. There was a clear social contract between the state and the people, where the state kept the people in check by allocating land, and in return, the people farmed the land and returned a fraction of their output in the form of taxes to sustain the economy. of the state. operation.
In recent decades, as China transitioned from an agrarian society to an industrial powerhouse to a service society, the state has also imposed strict controls on production resources such as energy, telecommunications, and transportation through state enterprises (SOE). In this configuration, the State ensured its control over the supply and control of critical production resources, as well as the generation of profits indirectly through the PEs. But the social contract between the state and the people remains the same: the state provides the resources of production; people farm these resources to earn a living and pay taxes to the state.
So, if the same social contract persists, instead of people cultivating state-provided land and paying taxes to the state, the new generation of Chinese will cultivate state-provided AI models and pay taxes to the state in return. From this perspective, the Chinese government will definitely monopolize AI, potentially through a new SOE like discussed above.
However, AI, unlike previous production resources like land and energy, is meant to be monopolistic, in the sense that the best engine will monopolize the entire market. Additionally, land and energy require human labor to produce products; AI is here to replace humans. In this context, whoever is capable of using generative AI can create companies with minimal human participation to provide services to other people.
Perhaps one day human society as a whole will find a way to fully cooperate with AI so that everyone is productive, similar to how we find a way to work with machines in an industrial society. Before getting there, the Chinese government faces the dilemma of the transition society through the service revolution.
The first option is to keep the status quo and not let AI take over the jobs. This may guarantee social stability in the short term, but it is obviously not a good choice in the long term. AI will bring a tremendous productivity boost; Failure to integrate AI into society will stagger China’s progress when it competes with other countries around the world.
The second option is to move people back to the agricultural and industrial sectors, thereby reducing the supply of labor in the service sector. This seems to be happening already, in recent years, China began to promote professional education instead of university education to increase labor supply in the industrial sector. One specific example is that many vocational schools are teaching students how to operate simple robots in textile factories, so that students learn how to deal with AI-powered robots to increase productivity in the industrial sector.
One caveat to this approach is that it can lead to a widening income gap, with only a small percentage of elite students receiving a college education and high-paying jobs, while the majority are left with industrial jobs. This will leave many Chinese parents unhappy, especially administrative parents who see this as their children falling out of their social class. Therefore, a propaganda campaign to reshape people’s perception must be designed to guide the social change that this election brings.
The key question, however, is whether AI will eventually bring about a change to the social contract between the state and the people that has existed for thousands of years. In the new social contract, the people will allow the state to own the monopoly AI engine, entrust the state with their data, and allow the ubiquitous integration of the state AI engine into their daily lives. In exchange, the State will provide basic social security so that people live a dignified life, with or without work. In other words, will AI be powerful enough to transition China to a true socialist state?