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AIPROPX ReportFortune · 3h ago
Nobel laureate Daron Acemoglu says AI and liberal democracy share the same crisis: ‘there is a tendency to escalate everything
Daron Acemoglu is frustrated by the artificial intelligence debate — and not because the MIT economist thinks the technology is dangerous. Although he does think that.
With his nearly unique mixture of frustrated nuance, Acemoglu, who has been warning about the dangers of AI for years, argued in an interview with Fortune that giving into fear is the worst kind of response right now. While evaluating the opposing camps in the debate, he sounds like the Groucho Marx of Nobel laureates: he wouldn’t want to belong to any club that would have him as a member.
On one side are the true believers — what he calls “quasi-moderate-friendly” types so convinced that AI is going to be good for everybody with no exception that any challenge to this view “drives them insane.” On the other are the skeptics who refuse to credit AI with any genuine capability, treating the models as “stochastic parrots” generating plausible-sounding noise. “There are people on the left — or part of the left — that just will refuse any argument that says AI has capabilities, it just drives them insane,” Acemoglu told Fortune . He sighs: “it’s very unproductive.”
He refuses both camps. “I think you have to really have your head in the sand to think that AI is a stochastic parrot right now,” he said, noting that anyone who uses the models will see that’s just not true. “But I’m also not willing to go along with some inchoate belief that everything will work out fine.”
Frontier models are making genuine advances in comprehension, coding and even scientific and mathematical discoveries — “it’s really great, the way proofs are being done” — and this should be celebrated just as fear of future job loss should be a concern. “It’s become sort of radical to hold two apparently conflicting ideas in your head at the same time,” he said. Which is why it’s the perfect time for his book, What Happened to Liberal Democracy? to come out.
We are in a time of crisis, he said, and the terms of our AI debate are just like our political system: so angry because it’s been so deeply damaged, for such a long time.
The escalator effect
“We live in an environment that’s been partly shaped by social media,” Acemoglu said, “and there is a tendency to escalate everything, because that gets attention. Politics is like that. The other topic like that, unfortunately, is AI.”
The economist sees a connection — the public’s inability to acknowledge both the real capabilities of this likely general-purpose technology and its potentially destructive social effects reflects a political culture losing its ability to deliberate over trade-offs, build common ground and direct economic change toward shared ends. That used to be normal in a liberal democracy.
He turns to what Wharton’s Ethan Mollick calls the “jagged frontier” of AI capabilities, because this technology is exceptional at some tasks, unreliable at others, and sometimes it’s some unusual combination of the two. “You need to do a lot of detailed babysitting,” he said. The economist flagged that beyond coding, there just isn’t much evidence of wide adoption, noting customer service employment is barely budged in recent years, likewise in manufacturing.
In Groucho-esque fashion, Acemoglu argued that this messy state of things could serve a useful purpose: “I wouldn’t call myself an optimist, I would say I resolutely refuse to give up hope.”
Two economists talking
Acemoglu points to his relationship with his former colleague and fellow star economist, Stanford’s Erik Brynjolffson , as a model for how the AI debate could go. The two have disagreed publicly and sharply about AI’s impact on productivity. Brynjolffson has argued for substantially greater gains than Acemoglu projects, and yet, Acemoglu says, “Erik and I actually agree on many things.” Their ability to disagree respectfully is exactly what he wishes he could see more of in policy circles.
He said he was pleased that Brynjolffson has increasingly called for redirecting AI in more human-complementary and more human-friendly ways, saying it’s “been my bugbear for almost two decades.” He also described Brynjolffson as “the main scholar showing the potential job losses from AI,” which Fortune has reported extensively on , as documented in the Canaries dashboard based on ADP data.
Acemoglu has been studying AI explicitly since at least 2018, and to his point, has spent much longer examining the underlying question: whether new technologies replace workers or create new tasks that raise their value. His work with Pascual Restrepo developed a framework for understanding automation as a force that can displace labor while also creating work, an ambiguity that sits at the center of today’s AI debate, with all its talk of the “ lump of labor fallacy ” and the Jevons paradox . His 2024 Nobel , shared with Simon Johnson and James Robinson, concerned the formation of institutions and how they shape prosperity, or fail to.
The point, Acemoglu stressed, is that it’s not a situation where solutions come easily — neither of the two economists is a straightforward booster or skeptic, but they are trying to move toward clearer understanding of trade-offs, problems and solutions.
Liberalism’s broken bargain
According to Acemoglu’s book, liberal democracy used to rest on more than elections and constitutional rights. “Shared prosperity” was the glue, the “main promise” that held the system together. Somewhere in the transition to what he calls the “postindustrial economy” that bargain fell apart.
The divides that resulted are the same ones you see in the dysfu...
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