The New Luddite Scare: The Impact of Artificial Intelligence on Labor, Capital and Business Competition between US and China

Abstract Objective: The main aim of the article is to send a message to the general public that Artificial Intelligence (AI) is no different than any inventions disruptive for the mode of production discovered before. In the past, Luddites looked with fear at steam-powered industry and mechanized looms; today we look at Artificial Intelligence (AI) with equal anxiety and fear of the unknown. Methodology: We analyze the world literature on this subject and compare the main economic actors: the USA and China. We also use some historic analogies like discoveries of Thomas Edison and Nicola Tesla. Findings: AI is a ground-breaking technology which will fundamentally change human relations to the outside world. It will disrupt all known paradigms or production, medicine, shopping and, generally, the exploration of human environment, blurring the barrier between virtual and real. Value Added: The luddite-type fears are unfounded. AI will enhance the concentration power, polarize societies between winners and losers, capital and labor and enhance the gaps which were on rise with the industrial revolution. We are at the outset of another revolution which will give humans a better command of nature. The negative effects of the revolution should be addressed and resolved in the future. Recommendations: AI was created by people and can be ultimately governed by the people who set it in motion. Perhaps AI will provide answers how to control ourselves from a runaway deep or general AI. But this is a subject of another paper.