With his nearly unique mixture of frustrated nuance, Acemoglu, who has been warning about the dangers of AI for years, argued in an interview with Fortune<\/em> that giving into fear is the worst kind of response right now. While evaluating the opposing camps in the debate, he sounds like the Groucho Marx of Nobel laureates: he wouldn\u2019t want to belong to any club that would have him as a member.<\/p>\n On one side are the true believers \u2014\u00a0what he calls \u201cquasi-moderate-friendly\u201d types so convinced that AI is going to be good for everybody with no exception that any challenge to this view \u201cdrives them insane.\u201d On the other are the skeptics who refuse to credit AI with any genuine capability, treating the models as \u201cstochastic parrots\u201d generating plausible-sounding noise. \u201cThere are people on the left \u2014\u00a0or part of the left \u2014\u00a0that just will refuse any argument that says AI has capabilities, it just drives them insane,\u201d Acemoglu told Fortune<\/em>. He sighs: \u201cit\u2019s very unproductive.\u201d<\/p>\n He refuses both camps. \u201cI think you have to really have your head in the sand to think that AI is a stochastic parrot right now,\u201d he said, noting that anyone who\u00a0uses the models will see that\u2019s just not true. \u201cBut I\u2019m also not willing to go along with some inchoate belief that everything will work out fine.\u201d<\/p>\n Frontier models are making genuine advances in comprehension, coding and even scientific and mathematical discoveries \u2014 \u201cit\u2019s really great, the way proofs are being done\u201d \u2014\u00a0and this should be celebrated just as fear of future job loss should be a concern. \u201cIt\u2019s become sort of radical to hold two apparently conflicting ideas in your head at the same time,\u201d he said. Which is why it\u2019s the perfect time for his book, What Happened to Liberal Democracy?<\/em> to come out. <\/p>\n We are in a time of crisis, he said, and the terms of our AI debate are just like our political system: so angry because it\u2019s been so deeply damaged, for such a long time.<\/p>\n \u201cWe live in an environment that\u2019s been partly shaped by social media,\u201d Acemoglu said, \u201cand there is a tendency to escalate everything, because that gets attention. Politics is like that. The other topic like that, unfortunately, is AI.\u201d <\/p>\n The economist sees a connection \u2014\u00a0the public\u2019s inability to acknowledge both the real capabilities of this likely general-purpose technology and its potentially destructive social effects reflects a political culture losing its ability to deliberate over trade-offs, build common ground and direct economic change toward shared ends. That used to be normal in a liberal democracy.<\/p>\n He turns to what Wharton\u2019s Ethan Mollick calls the \u201cjagged frontier\u201d of AI capabilities, because this technology is exceptional at some tasks, unreliable at others, and sometimes it\u2019s some unusual combination of the two. \u201cYou need to do a lot of detailed babysitting,\u201d he said. The economist flagged that beyond coding, there just isn\u2019t much evidence of wide adoption, noting customer service employment is barely budged in recent years, likewise in manufacturing.<\/p>\n In Groucho-esque fashion, Acemoglu argued that this messy state of things could serve a useful purpose: \u201cI wouldn\u2019t call myself an optimist, I would say I resolutely refuse to give up hope.\u201d <\/p>\n Acemoglu points to his relationship with his former colleague and fellow star economist, Stanford\u2019s Erik Brynjolffson, as a model for how the AI debate could go. The two have disagreed publicly and sharply about AI\u2019s impact on productivity.\u00a0Brynjolffson has argued for substantially greater gains than Acemoglu projects,\u00a0and yet, Acemoglu says, \u201cErik and I actually agree on many things.\u201d Their ability to disagree respectfully is exactly what he wishes he could see more of in policy circles.<\/p>\n He said he was pleased that Brynjolffson has increasingly called for redirecting AI in more human-complementary and more human-friendly ways, saying it\u2019s \u201cbeen my bugbear for almost two decades.\u201d He also described Brynjolffson as \u201cthe main scholar showing the potential job losses from AI,\u201d which Fortune<\/em> has reported extensively on, as documented in the Canaries dashboard based on ADP data.<\/p>\n Acemoglu has been studying AI explicitly since at least 2018, and to his point, has spent much longer examining the underlying question: whether new technologies replace workers or create new tasks that raise their value. His work with Pascual Restrepo developed a framework for understanding automation as a force that can displace labor while also creating work, an ambiguity that sits at the center of today\u2019s AI debate, with all its talk of the \u201clump of labor fallacy\u201d and the Jevons paradox. His 2024 Nobel, shared with Simon Johnson and James Robinson, concerned the formation of institutions and how they shape prosperity, or fail to. <\/p>\n The point, Acemoglu stressed, is that it\u2019s not a situation where solutions come easily \u2014\u00a0neither of the two economists is a straightforward booster or skeptic, but they are trying to move toward clearer understanding of trade-offs, problems and solutions.<\/p>\n According to Acemoglu\u2019s book, liberal democracy used to rest on more than elections and constitutional rights. \u201cShared prosperity\u201d was the glue, the \u201cmain promise\u201d that held the system together. Somewhere in the transition to what he calls the \u201cpostindustrial economy\u201d that bargain fell apart. <\/p>\n The divides that resulted are the same ones you see in the dysfunctional AI debate: the educated and less educated got separated, the more educated took over the center-left, and the working class fled for the center-right or hard right. <\/p>\n There\u2019s a \u201csignificant divergence in values\u201d between the camps, along with a significant gap in \u201cconnections and empathy,\u201d leading to what he described as \u201csins of omission\u201d and \u201csins of commission.\u201d <\/p>\n The center-left is silent as inequality grows, separating the groups by class, while cultural politics divide them in social views \u2014\u00a0\u201cthat destroyed the communal roots of liberal democracy.\u201d<\/p>\n Acemoglu\u2019s framework informs his ambivalent view of the Democratic Socialists of America and Zohran Mamdani, the telegenic far-left New York City mayor, who has a gift for making local politics go national. The DSA are a \u201cmixed bag,\u201d Acemoglu said; they should be credited for highlighting the theme of affordability, and yet they are \u201cpreaching to their base\u201d and don\u2019t have much impact with Black voters, who have been lukewarm in response. Furthermore, they have \u201cdoubled down on cultural politics \u2026 exactly the kind of policy ideas and rhetoric that alienate the working class [and] creates an adversarial attitude.\u201d<\/p>\n He wasn\u2019t saying that DSA was wrong about their stances, just wrong on their methods, citing his book\u2019s examples of ways to use liberal democracy to bridge such divides. State-level referenda on gay marriage and grassroots movements on abortion rights in Ireland, for example, weren\u2019t top down and so allowed for consensus to form, just the way it needs to on AI now. \u201cIn both cases the evidence is that many people change their views,\u201d he said \u2014\u00a0the process can\u2019t be forced. Liberalism should not be a \u201ccookbook\u201d that dictates the answer to every controversial question, he said, but a model for resolving difficult issues through persuasion, public participation and compromise. It\u2019s hard to adopt that in a time of crisis, though.<\/p>\n Democratic socialism, Acemoglu continued, is \u201ca very amorphous concept\u201d at this point, but he added that he wasn\u2019t opposed to Mamdani policies like a wealth tax or a pied-a-terre tax. He added that it\u2019s not as \u201cefficient\u201d to adopt these in one city as opposed to nationally, because state-by-state wealth taxes invite competition among jurisdictions, as seen to Texas\u2019 and Florida\u2019s benefit in recent years. <\/p>\n When the topic turns to Donald Trump and the oncoming midterms, Acemoglu is his usual not-quite-optimistic self. \u201cI still think we\u2019re going to have elections in November and both sides will get counted,\u201d he said. \u201cTwo years from now, I have no idea.\u201d<\/p>\n AI anxiety has been a major issue this election season, as has backlash over data center development.<\/p>\n Acemoglu\u2019s book calls for \u201cpro-worker AI\u201d and a stronger safety net and more redistribution. This would mean supporting AI tools that increase the effectiveness of workers, reconsidering tax rules about capital gains vs. wages, limiting the dominance of big tech and giving workers a stronger voice at the table. Above all, he added, the unthinkable has to be avoided: \u201cIf 50, 60, 70% of the people become jobless, hopeless, feeling dispensable, having no dignity at work, then I don\u2019t think we can have a liberal democracy society.\u201d<\/p>\n But what about the fact that, midterms aside, Trump will still be responsible for steering AI until the next presidential election? \u201cIt\u2019s not going to change radically for two years,\u201d he agreed, while adding that he \u201cwouldn\u2019t say Democrats are on the ball, either.\u201d The only prescription is more of his beloved liberal democracy, in other words.<\/p>\n Just think, he said, about what a remarkable achievement this has been, to build advanced societies, negotiate conflicts and reach compromise without routine descent into violence. \u201cWe come from very cantankerous apes,\u201d Acemoglu said, and it\u2019s \u201camazing\u201d what we have built from that raw genetic inheritance. \u201cI would be so devastated if we lose liberal democracy.\u201d<\/p>\n \u201cWe need to redirect AI,\u201d he added, saying he was \u201cvery worried that things won\u2019t work out if we don\u2019t change things now.\u201d Somehow, in these crisis times, we need to really listen to each other, hold two conflicting ideas at the same time, and get over our cantankerous natures. Easier said than done.<\/p>\n<\/div>\n #Nobel #laureate #Daron #Acemoglu #liberal #democracy #share #crisis #tendency #escalate<\/p>\n","protected":false},"excerpt":{"rendered":" Daron Acemoglu is frustrated b… <\/p>\n","protected":false},"author":1,"featured_media":2355,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[4587,4123,1458,4586,4589,515,4591,4585,4588,1685,4584,12,4590],"class_list":["post-2354","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance-news","tag-acemoglu","tag-books","tag-crisis","tag-daron","tag-democracy","tag-economics","tag-escalate","tag-laureate","tag-liberal","tag-nobel","tag-nobel-peace-prize","tag-share","tag-tendency"],"yoast_head":"\n![\"\"](\"https:\/\/fortune.com\/img-assets\/wp-content\/uploads\/2026\/08\/9798217182169.jpg?format=webp&w=1440&q=100\"\/)
<\/div>\n<\/figure>\nThe escalator effect<\/h2>\n
Two economists talking<\/h2>\n
Liberalism\u2019s broken bargain<\/h2>\n
The DSA<\/h2>\n
Midterm elections<\/h2>\n