Abhijit Banerjee, Nobel Prize in Economics 2019
Abhijit Banerjee warns that inequality, automation and resource consumption by AI require new forms of public financing.
The Nobel Prize in Economics Abhijit Banerjee argues that States should return to taxing the richest and create taxes on resources consumed by Artificial Intelligence, such as water used in data centersto reduce inequalities, finance the welfare state and respond to the impact of technology on the labor market.
In an interview with the Lusa agency, the economist, distinguished in 2019, considered that, since the covid-19 pandemic, a succession of shocks has mainly harmed the poorest familieswhose real incomes, after rising until 2019, are now stagnating in many countries.
Rising food prices and changes in the job market help explain this evolution. “There is something that changed after 2019 in the world and this is bad for the poorest”, he stated.
Banerjee criticized the idea, which she says is gaining ground especially among right-wing parties, that the . For the North American economist, born in India, This thesis is not justified in a context in which “inequality is exploding across the world”.
In your reading, many European countries currently have developed social protection systems and could do more through these mechanismsbut its budgetary margin is conditioned because the States are not able to tax the richest sufficiently.
“They are not paying fees, everything else is being cut”he stated, considering the situation “unsustainable”.
The economistIt also accused the richest of creating disinformation and explore legal loopholes to avoid taxesappearing to have no taxable income.
For Banerjee, the taxes on large fortunes would make it possible to reinforce the social state, mitigate inequalities and prepare public response to the effects of Artificial Intelligence.
The Nobel Prize for Economics warned that the AI could have a significant impact in inequality, although it is still uncertain whether those most affected will be the poorest or the middle class.
The technology can bring social benefitsfor example by improving access to healthcare in remote areas, but also threatens jobs qualified typical middle classknee Banerjee.
Or Nobel Indian-American pointed out the case of accountants and anticipated that “all robots will replace skilled labor”. More physical jobs, such as construction, associated with lower income, will be more difficult to automate.
Given this impact, the economist argues that States will have to compensate workers who lose jobs and should “think very seriously” about tax AI.
This taxation should not be limited to profits or economic activity generated by technology, but toalso cover the natural resources it consumes.
Banerjee advocated, in particular, a water pricing policy used in data centers, including in dry regions where, in his opinion, the assessment of the cost of this resource is wrong, and compared the possibility of taxing water to the water model taxes on greenhouse gas emissions.
Abhijit Banerjee received the Nobel Prize in Economics in 2019, along with Esther Duflo e Michael Kremerfor the “experimental approach to alleviating global poverty”.
