EIG chief economist Adam Ozimek chats with Cardiff Garcia about Adam’s new post, AI and the Economics of the Human Touch.

An excerpt:

Either AI is so useless that we are in the middle of a bubble that’s about to burst and take the economy down with it, or AI is so powerful it’s going to replace us all and devastate the labor market.

The pessimism in speculation about the economic effects of artificial intelligence is often so overwhelming that these opposing concerns can even come from the same person. AI is evolving fast enough that we should not entirely ignore the economic doomers, though it would be nice if they could at least be consistent.

But it is essential to balance the discussion with some optimism. I can see glimmers of hope in a simple fact: There are many jobs and tasks that easily could have been automated by now — the technology to automate them has long existed — and yet we humans continue to do them. The reason is that demand will always exist for certain jobs that offer what I call “the human touch.”

The specific jobs that require the human touch may themselves change or evolve, but I suspect that such jobs will continue to exist long into the future.

Adam and Cardiff discuss the job that inspired Adam’s post, why the Olive Garden represents a hopeful future for work in an age of AI, the perils and promise of AI for caregiving jobs, and how Adam himself plans to prepare for the eventual automation of his daily tasks.

Related links:

• Adam’s post
• Agglomerations homepage (subscribe!)

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Jen Doleac is an economist and the director of the Criminal Justice program at Arnold Ventures. She joins Cardiff on the show to chat about her upcoming new book, “The Science of Second Chances: A Revolution in Criminal Justice”.

From the book jacket:

Freakonomics for criminal justice, The Science of Second Chances presents a groundbreaking approach to criminal justice reform, revealing how small-scale interventions can reduce people’s chances of reoffending and break the incarceration cycle…

Drawing on cutting-edge economic research and real-world experiments, the book presents a blueprint for reform that runs all the way through the system. Doleac shows how economists like herself approach big, complicated problems as if they were scientists in a lab, carefully testing different approaches and following the data to maximize impact. She explains how shifting the incentives people face can produce dramatic changes in the decisions they make, significantly reducing the number of people cycling through the prison system.

Jen and Cardiff discuss the unique approach and contributions of economists to understanding the criminal justice system, why erring towards leniency so often leads to less reoffending, and the surprising failures of ideas that seem sensible. Along the way they examine the evidence needed to answer questions like:

• How long should prison sentences be?

• How should probation be structured?

• For people who do go to prison, what kinds of incentives should we give them for how they spend their time there, how they rehabilitate themselves?

• How should we take into account variables like age or mental health?

• And what happens when someone gets out of prison? What are the best policies to put them on the path to success?

Jen herself has spearheaded a lot of the research behind this evidence, and she also has detailed knowledge of the work done by other economists in the field. So she’s about as well positioned to evaluate it as anyone Cardiff knows.

And her work is about more than just using limited resources in the best possible way (although that’s great) and more than just making society better and safer (also great). It’s about finding ways to help individuals get their lives back on track, so that a mistake made early in life doesn’t end up defining everything that comes after.

Related links:

• Science of Second Chances pre-order links
• Jennifer Doleac’s page at Arnold Ventures

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Nearly 30 million workers, or roughly one in five workers throughout the country, are required to have a professional license before they can do their jobs.

That’s more than twice the number of workers who belong to unions. And it’s almost ten times the number who earn the minimum wage. But in comparison to those other economic arrangements, curiously little attention is given to the process that governs licensing, the perverse outcomes it so often leads to, and the vulnerable workers who are affected by it.

Cardiff’s guest on this episode is Vanderbilt law professor Rebecca Haw Allensworth, author of “The Licensing Racket: How we decide who is allowed to work, and Why it goes wrong.” Among Cardiff’s picks for the economics book of the year, it is the product of not just a scholarly understanding of the topic, but of years and years of painstaking reporting, interviewing hundreds of people, and unearthing a variety of frankly shocking anecdotes.

She and Cardiff discuss:

• The legal and institutional design behind the boards that oversee licensing in each state
• How the desire to protect the already licensed leads board to impose outrageous requirements for new licenses
• The ludicrous rationalizations of so many licensing boards for erecting obstacles to new workers entering their professions
• The shocking failure of licensing boards, especially within medicine, to actually fulfill the mission they are set up to pursue: protect public safety
• How the ratcheting up of licensing requirements led to a standoff between nurses and doctors
• How licensing hurts dynamism and entrepreneurship
• The more substantive tradeoffs involved in licensing, including the pride and validation that existing practitioners feel in having a license
• Which jobs shouldn’t require a license, and for those that do, a better way forward

All throughout, Rebecca shares with Cardiff the tales of the workers, board members, and the others she interviewed.

Related links:

• The Licensing Racket, by Rebecca Haw Allensworth
• Rebecca Haw Allensworth page at Vanderbilt Law School

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