In the past three weeks, policymakers had their worlds rocked by generative artificial intelligence. The problem is that they don’t know it – yet.
First, a team of researchers demonstrated that Open AI’s Chat GPT3 can pass the stringent United States Medical Licensing Exam. Days later, Chat GPT 3 passed a bar exam. Finally, Chat GPT3 passed the prestigious Wharton Business School’s rigorous core examination.
The Wharton researcher writes, “OpenAI’s Chat GPT3 has shown a remarkable ability to automate some of the skills of highly compensated knowledge workers in general and specifically the knowledge workers in the jobs held by MBA graduates including analysts, managers, and consultants.”
Lawyers, doctors, administrators, managers, and consultants are some of the most highly compensated professionals in the United States. Generative artificial intelligence is banishing them to obsolescence.
With only 375 employees, the unprofitable Chat GPT3 was acquired by behemoth Microsoft at a valuation reportedly northward of $30 billion. For perspective, with over 42,000 highly educated healthcare employees, AmerisourceBergen is the largest company by revenue headquartered in Pennsylvania. Its valuation is $33.25 billion. So, with 99% fewer employees, the unprofitable Chat GPT3 is already worth nearly the same as the largest company in the Commonwealth.
Microsoft has already pledged $10 billion to optimize Chat GPT3 toward profitability. Tens of billions more dollars are coming.
The last time policymakers were presented with displacement on this scale was the globalization that decimated the American working class. The solution for Pennsylvania policymakers was to pivot the state’s economy to “Eds and Meds,” which now constitute 44% of total employment.
Those industries were chosen because spending is generated predominantly by the government, which is historically stable. To quote Ronald Reagan, “Government programs, once launched, never disappear.” Pennsylvania policymakers knew that they were making safe bets as those markets would almost always exist.
The pivot worked, with Pennsylvania stabilizing its population decline. Communities able to make the pivot, particularly in the suburbs, saw prosperity.
Once reliably Republican, the suburban voters employed by “Eds and Meds” now constitute the Democratic Party’s base. The rise of conservative populism, which pointed the finger at college-educated elites for the decline of the working class, accelerated the trend.
The reticence of suburban elites to choose Republican candidates is understandable, considering some in the GOP’s working-class base label them the enemy. For many in the working class, the contempt is personal, as they perceive the college-educated as having enriched themselves at their expense, via globalization.
But generative artificial intelligence is poised to inflict the same level of economic devastation on suburban elites as suffered by the working class through globalization. Some elites will undoubtedly find sure footing in the pending economy created by generative artificial intelligence. But many others will not.
The Rust Belt’s decline took decades to manifest. Its slow pace helped shield policymakers from criticism because gradual change enabled some Americans to find solutions on their own.
In contrast to globalization’s slow deindustrialization, however, technological adoption moves at lightning speed and is only getting faster. “Eds and Meds” suburbanites are unlikely to gain a reprieve through gradual transition. Profitable generative artificial intelligence business models may surface within a year. Suburban prosperity could be severely undermined before the next Winter Olympics. Policymakers need immediate solutions.
Political polarization rises during economic decline. A 20-point gap persists between the political affiliations of college-educated and non-college-educated Americans. It is one of the most pronounced cleavages in American politics.
The displacement potentially caused by generative artificial intelligence could put college-educated voters back into electoral play for Republicans, presuming the GOP can deliver something for them.
The path to help these Pennsylvanians, one that would be exclusive to Republicans, is rapid reindustrialization. The prerequisites for rapid reindustrialization are affordable, abundant energy and school choice. Both are fundamental tenets of the GOP platform.
Pennsylvania is blessed with abundant natural resources and is a net exporter of energy. It has educational entrepreneurs pleading for the opportunity to create the most industrially skilled workforce on the planet. Products made in Pennsylvania can reach most of the continental United States or international waters within 24 hours. Among the 50 states, this “iron triangle” of energy-workforce-logistics may be unique to Pennsylvania.
Rapid reindustrialization is the path that unites all educational backgrounds to produce real, sustainable wealth. Instead of pitting the educational classes against one another, it makes them partners in success.
Pennsylvania Republican policymakers have the opportunity before them to accomplish what Ron DeSantis has achieved in Florida: a generational political realignment of a state.
Meanwhile, Pennsylvania’s Republican Party leaders have proposed spending hundreds of thousands of dollars on a 2022 midterm post-mortem. That’s fine. But the lesson of the 2022 midterm is that voters do not reward looking backwards.
A crisis has begun. The GOP will respond either by providing tomorrow’s leaders or being condemned by history for failing to rise to the challenge.