Daron Acemoglu

My new book #WhatHappenedToLiberalDemocracy is out on August 11. Here is a brief message about my motivation for writing this book and its central thesis. Pre-order links are available here: shapingwork.mit.edu/what-hap…. I hope you will join me in the discussion.

Dear followers, I’m delighted to share this new Time magazine article. Thank you

I am also very happy to share this interview with Time magazine. Thank you

Dear followers, The link in my previous post was incorrect. Here is the correct post for the conversation with Nick Thompson. Thank you.

I am grateful to Nick Thompson. for this positive assessment and the very engaging podcast, which you can find here. linkedin.com/mwlite/feed/pos…

The historic Democratic victory in the midterms is a lifeline for US democracy. It would be a mistake to minimize the importance of Democrats taking control of the House and the Senate and doing so resoundingly. Yet it would also be a huge mistake to fail to recognize that the toughest part starts now. Senator Jon Ossoff stated in his victory speech: “we must acknowledge that the underlying crisis gripping our republic remains and that therefore our most vital work lies ahead.” But even this frank assessment understates the severity of the challenge facing the party. Tuesday’s outcome was an anti-Trump vote. But it was delivered by the same frustrated voters that brought Trump to power and gave both houses to Republicans in 2024 in an anti-Biden vote. If Democrats cannot grapple with the obscene levels of inequality in this country, with the real affordability crisis and with the vexing problem of creating good jobs for Americans of all skills, the pendulum could swing back in 2028. Democrats need a platform that is at once realistic andradical to tackle the tremendous economic challenges for workers. Neither progressive Democrats’ reliance on taxes, transfers and traditional regulations, nor centrists’ attachment to the status quo, nor the wishful thinking of those banking on AI-driven “abundance” is radical enough. The inequality, affordability and jobs problems facing Americans will only get worse in the coming AI economy. Democrats need to articulate new aspirations and a new governing philosophy, as I have argued in my book What Happened to Liberal Democracy. penguinrandomhouse.com/books… These have to be centered on creating well-paid, career-building jobs for all workers, and especially those without a college degree, who have been left behind in the postindustrial economy of the last half century. This agenda must start with a workable plan for redirecting AI, so that this promising technology isn’t shaped by the dreams of a small cadre intent on artificial superintelligence and automation of most of what humans do. We must instead articulate why it is feasible and desirable to build pro-worker AI and how this can create jobs and decent incomes for workers. We must also propose policies to help a new pro-worker AI economy (and some of the elements of such a policy are outlined in this piece: nature.com/articles/d41586-0… more details can be found here: brookings.edu/articles/build…). This effort must be accompanied by a broad enough Democratic tent that recognizes the cultural as well as economic discontent of working-class communities. The worst response to Tuesday’s results would be for Democrats to rest on their laurels. The hard work starts now.

And this is the same interview in English. Thank you

Dear followers, I’m happy to share this interview with El Pais on the future US democracy

Dear followers,I am delighted to share this interview which I enjoyed a lot. Thank you

Dear followers, please see this Substack from @MITshapingwork about my research with Andrea Manera and Pascual Retrepo on the US tax code's bias toward automation. How the US tax code incentivizes companies to replace workers with AI

An excellent analysis of where Europe is right now. It’s Not Just France. Europe’s Political Center Is Crumbling. nytimes.com/2026/10/20/world… via @NYTimes

A badge of honor

This is interesting.

Thanks to @joshgans for collecting my questions on AI and his responses in a single substack post.

This would be funny— if it weren’t our tragic reality

Another thoughtful response from @joshgans

As usual, @Yoshua_Bengio is raising central issues and speaking with great moral and intellectual clarity. Getting the direction of AI right is a responsibility for all of us.

Seventh and last question on AI. Can AI really help us create as many jobs as it will replace? The AI industry offers two narratives at once. The first emphasizes that because of AI’s capabilities, there will be a lot of job loss, and soon. Anthropic’s co-founder and CEO Dario Amodei is particularly vocal on this: cnbc.com/2026/01/27/dario-am… The second claims that AI will also enable lots of new jobs, so we should not fear joblessness, higher unemployment, and humans being sidelined (see, for example, Jensen Huang, fortune.com/2026/09/01/nvidi… or Marc Andreessen, digitaltoday.co.kr/en/view/4…). A lot hinges on this question. Sizable job displacement is costly for workers and could destabilize our already ailing democracy. Displacements from robots and cheap Chinese imports in the 1990s and 2000s in the United States, which were smaller than the projected job losses from AI, contributed significantly to declining trust in government and institutions (see my book What Happened to Liberal Democracy, penguinrandomhouse.com/books…, on this). Our democracy may not be able to survive another massive job dislocation. I am worried about job loss, for two fundamental reasons. AI is currently being developed as an automation technology and in addition, I do not find the arguments about large numbers of jobs being created by AI particularly realistic. (I’ll come back below to how AI could create jobs if it weren’t developed as an automation technology). Proponents of the job creation side fall back on four general arguments, none of which is convincing in my assessment. First, new technologies have always created lots of jobs. True, but that does not guarantee that this time will be the same. And more importantly, this account neglects the richer details about different historical episodes. In a nutshell, automation technologies by themselves need not create jobs (though they can, depending on circumstances and how productive they are). They involve capital substituting for tasks previously performed by workers. The way they would create jobs is that the displaced workers would go and take non-automated jobs in other parts of the economy. This can happen, but it also depresses wages (or at the very least the labor share), and consequently, some of the workers may be discouraged from looking for work or may not have the skills that remaining non-automated tasks require. This, in any case, is what task-based models predict. See, for example: aeaweb.org/articles?id=10.12… and onlinelibrary.wiley.com/doi/…. The empirical evidence also casts doubt on plentiful job creation taking place automatically. For example, the introduction of robots led to many fewer jobs in local economies that depended on blue-collar jobs in robot-heavy industries (and this effect was quantitatively large; one more robot per thousand industrial workers reduced the employment population ratio in the local economy by about 2 percentage points and local wages by 0.42% between 1990 and 2007). See journals.uchicago.edu/doi/fu…. Second, AI will increase productivity and higher productivity will lead to more jobs. But this argument suffers from the same weakness as the previous one: higher productivity will trigger job creation only in remaining non-automated tasks (unless there are new tasks, which I discuss below). If wages are depressed and workers don’t have the skills for these non-automated tasks, even with higher productivity, there will not be AI-driven job creation. Third, AI will need a lot of supporting roles, such as people to train the AI models. This one is the weakest argument of all. If AI is indeed an automation technology, then the whole point is to save labor costs. By the same logic, the labor needed to train AI must be much less than the labor AI ultimately saves. For this reason, I see essentially no chance that there training and maintaining AI will create anywhere near as many jobs as AI replaces. Fourth, AI is already complementing workers. This argument is based on some evidence that many workers are using AI in their jobs – see, for example, thefp.com/p/ai-jobs-unemploy…. However, the mere fact that workers are using AI in their jobs doesn’t establish that new jobs will be plentiful. The theory here is again quite clear (see the detailed treatment of this issue here, nber.org/papers/w32872). If AI simply makes workers more productive in the tasks that they used to perform already, it will drive down task prices. If you are the only worker using AI, this will benefit you. If all workers like you start using AI, then the skills on which you depend become commodified. This is what happened, for example, to London black cab drivers, whose highly-valuable knowledge of London streets was commodified when GPS technology enabled minicabs, and then later Uber drivers, to perform the same tasks as effectively. To put it simply, it isn’t enough for AI to make workers more productive at the tasks that they are performing already. This brings me to how AI could create a lot of jobs. Again, the task-based framework provides the answer here: new technologies create jobs, and in fact well-paying jobs, if they enable new tasks (either in the same industry or in new industries). I have argued elsewhere that AI has this potential as a powerful information technology. See, for example, brookings.edu/articles/build…. But this isn’t currently the direction in which AI is being developed. Hence, on its current trajectory I remain quite concerned about future job losses (and wage declines) from AI. Of course, things may turn out differently. But if they do, it will be because AI becomes more pro-worker. I see this as unlikely, but it is useful to still consider the scenarios that would bring such an outcome. These are: (1) current AI technologies may become turn out pro-worker than I am anticipating; (2) in the future the industry will automatically and by itself change and focus on pro-worker applications; (3) based on AI-driven science and research, new sectors will be created where there will be need for new workers. I’m not optimistic about any of these possibilities, and therefore my conclusion is that AI is likely to lead to more jobs being lost than gained. (But I do think there are policies that would encourage pro-worker AI; see, for example, nature.com/articles/d41586-0…). That being said, I don’t think the job loss will happen very quickly, because as I discussed in an earlier post (third question), the diffusion of AI is relatively slow. But this also implies the productivity gains from AI will be slow in coming.

Sixth question on AI. Does AI need to be a zero-sum race between the US and China? Many influential voices in tech as well as the current administration argue that it does. (See, for example, darioamodei.com/post/on-deep…, washingtonpost.com/opinions/…, forourposterity.com/situatio… and this from the White House, whitehouse.gov/wp-content/up…). There are many aspects of these arguments, but I would like to focus on three that have received less attention than they deserve. The first aspect is that this framing typically assumes that there is a single direction of progress for AI, and the US and China are racing along this dimension toward superintelligence or at the very least some sort of powerful AI that will confer huge military and strategic advantages to the winner. If, on the other hand, the US and China are developing these technologies in different directions, there is much more room for coordination and even for each country learning from the other’s best practices. My reading of the evidence is that there are huge differences in the American and Chinese approaches. The US is focused on foundation models, such as frontier large language models. China is also investing – and arguably catching up – in these models, but there is much greater emphasis in China on applications of AI (with the government setting targets for the spread of AI across industries, english.www.gov.cn/policies/…). This reflects several factors, in my assessment. First, Chinese AI investments started with government demands for surveillance technologies and government-supplied data to AI companies (e.g., academic.oup.com/restud/arti…). Second, China is facing a huge demographic transformation, which will create scarcity of labor in the near future. This encourages companies to integrate robotics and AI much more actively into the production process (and China accounts for 59% of all robot installations in the world, ifr.org/ifr-press-releases/n…). Third, applications and integration of these technologies into the production process requires a lot of engineering. China has a large and very well-trained supply of engineers (whereas the US has far fewer engineers and a lot of engineering talent is currently going to Silicon Valley, which hasn’t focused on applications). Fourth, China was relatively late in catching the “artificial general intelligence,” AGI, bug, although now there is more emphasis on this in China as well. Whatever the exact causes, this difference in approach implies that there is plenty for the US to learn from China as well as the other way around. The second aspect is that the zero-sum framing ignores or downplays the crucial need for global coordination. This framing claims that the strategic and military advantage that powerful AI will create is all that matters. But the race to AGI also poses huge risks (and this is true regardless of whether this race is truly advancing toward superintelligence or just producing distorted intelligence, as I argued in my first post in this series). And these risks are global. If the US and China are racing toward AGI with no guardrails and coordination, even the follower (probably China) will have models capable of creating havoc. In this case, racing without any global coordination is a recipe for disaster. The third aspect of the problem is that this framing narrows the scope for any kind of coordination on other global issues between the US and China – including climate change, pandemics, nuclear nonproliferation and world peace. Tellingly, climate cooperation between the US and China has now largely stalled). Let me add that I’m saying all of this not as an admirer of the Chinese system. On the contrary, I have been a vocal critic of both the Chinese Communist Party and the Chinese development strategy since Why Nations Fail (penguinrandomhouse.com/books…) and I have argued that the Chinese success has some of its roots in severe labor repression (project-syndicate.org/commen…). Indeed, this argument does not ignore the fact that China has an authoritarian, repressive regime, and it is using AI for surveillance and to stamp out dissent. Global coordination and efforts to set up reasonable rules that apply to all parties do not require the counterparty to be fully democratic or ruled by angels. In fact, sometimes it is more important to set up such a global framework when dealing with dangerous adversaries (as the arms-control treaties that the US and the Soviets signed demonstrate). In sum, my assessment is that it is a colossal mistake to frame the AI race as a zero-sum one between the US and China. It poisons the much-needed dialogue and coordination between the US and China on broader issues; it makes the AI race more reckless; and it discourages the building of reasonable guardrails and regulations. The last point is particularly relevant, and makes me sometimes say: if China did not exist, Silicon Valley would have to invent it.

And this