10.16.2007

AI for EI

According to the World Institute for Development Economics Research, too much economic inequality (above a Gini coefficient of .40) negatively impacts growth, due to incentive traps, erosion of social cohesion, social conflicts, and uncertain property rights, while to much equality (below a Gini coefficient of .25) negatively impacts growth due to incentive traps, free-riding, labor shirking, and high supervision costs (2001). But even if we accept this, who wants to be on the bottom rung of a so-considered optimal distribution of wealth? Well says Edward Castronova, “how do you make a world in which everyone is in the top 10 percent? The answer: AI.” Sounds absurd. But would the economy know the difference?

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