Review : Moore’s Law for Everything

This article is written in 2021 by Sam Altman who is the CEO of an AI software company and former president of the world’s leading Startup accelerator “Y Combinator”.

The main argument of the article is that as software becomes more sophisticated, power is continuously shifting from labour to capital. To ensure fairness and peace, wealth created by technology should be shared among labourers so that they don’t end up worse than today.

According to Altman, technological progress is accelerating at an enormous speed and humanity will advance in the next 100 years further than during the 1000 years before. He expects AI to lower the cost of goods and services by taking over most of the tasks that humans had been doing. He is very optimistic about this change “Imagine a world where, for decades, everything–housing, education, food, clothing, etc.–became half as expensive every two years.”

He is much less optimistic about the economic value created by humans in the future. “While people will still have jobs, many of those jobs won’t be ones that create a lot of economic value in the way we think of value today.”  He expects inequality to increase and thinks that progressive taxation will be insufficient to address it.

His solution is to tax capital instead of income and distribute wealth directly to citizens. People should become owners of assets instead of just recipients of income. Altman thinks that the assets to be distributed to the public should be “1) companies, particularly ones that make use of AI, and 2) land, which has a fixed supply.

He proposes to create an organization called “American Equity Fund” and tax companies above a certain valuation 2.5% of their market value each year, payable in shares transferred to the fund, and by taxing 2.5% of the value of all privately-held land, payable in dollars.” These shares would then be annually distributed to all citizens over 18, who would be free to use sell their shares and use the money “however they needed or wanted—for better education, healthcare, housing, starting a company, whatever.”

Altman expects his scheme to result in “each of the 250 million adults in America would get about $13,500 every year”. There are a lot of assumptions behind this figure: the value of companies and land should be doubling every decade even though he admits his new taxes would depress their prices.

The advantage of his proposal would be to “align incentives between companies, investors, and citizens, whereas a tax on profits does not… Corporate profits can be disguised or deferred or offshored and are often disconnected from share price. But everyone who owns a share in Amazon wants the share price to rise. As people’s individual assets rise in tandem with the country’s, they have a literal stake in seeing their country do well.”

He is aware of potential challenges with implementation such as incentives for companies to remain private (if only public companies are taxed) or difficulty of assessing the actual value of land. He also proposes safeguards against people voting for ever-increasing shares or using their fund distributions as collateral for debt.

Verdict: Providing citizens with assets rather than income is an interesting concept. Unfortunately, at this point, there are too many conflicting ideas and unaddressed challenges to make this a serious proposal for change. However, Altman’s article should be considered as a starting point for further thinking and discussion.

Link to Article:

https://moores.samaltman.com/#:~:text=Broadly%20speaking%2C%20there%20are%20two,with%20the%20resources%20we%20have.

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