The Cognitive Curmudgeon: the AI glass is half empty, and it has a leak

The Cognitive Curmudgeon: the AI glass is half empty, and it has a leak

By Jim Stikeleather

April 25, 2017
 


The Jobless Economy


There have been decades of political and social debate (Glavas & Mish, 2014) on whether corporations should be considered property, responsible strictly to create wealth for their owners, or alternatively, as fictional persons who should incur the equivalent obligations to society as all its other members. To some, business should simply increase profits while playing by the rules (Mulligan, 1986). To others, it is to create value, though the definition of value is often in the unique eyes of the beholder rather than a singular concept (Porter & Kramer, 2011) in society. There are also the questions of creating value for whom (Stout, 2012) as well as the processes and constraints used (Bell, 2011) in creating value. As we increasingly turn over management decisions to our Artificial Intelligences and Cognitive Systems causing many types of enterprises to begin operating autonomously like a driverless car this question becomes increasingly important. Do we want maniacal profit maximizing intelligences running our businesses? If not, we need to be thinking now about how to prevent that, least we face unimaginable unemployment, because anything we can do – they can do better or at least more efficiently[1].

Philosophical issues aside, the contemporary practice of business and its focus on shareholder wealth creation and profit maximization has resulted in many unintended consequences for society including inequity (Corning, 2011), ecological damage (Hawken, 2013) and disruptions of culture and social norms (Storr, 2009). This has created societal challenges to business (Meyer & Kirby, 2012) in response. There have been direct responses by society including increased legislation, regulation, taxation, civil suits, protests, boycotts and shaming in social and mass media all meant to direct, constrain, curtail, or punish the actions of business. It is not clear how a profit-maximizing cognitive learning system would or could respond to these (hopefully other than getting rid of the humans of course).

 More interesting are emergent responses such as corporate social responsibility programs or socially responsible investing as well as new forms of business behavior and governance such a B-Corps and Benefit Corporations. Most recently has been the emergence of “collaborative capitalism,” a term coined by I-DEV International[2] in 2009. It is defined as – “An economic model, policy, approach or development strategy by which an individual’s, investor’s, corporation’s, or country’s economic interests are best served through a pro-active strategy that seeks to improve the well-being, economic purchasing power, and capabilities of other individuals, corporations or countries.” However, these are still very much the exception instead of the rule and their success principles not well understood. In general, they do elevate the enterprise into a role that shares responsibilities and obligations to society much as an individual has. As companies become inherently intelligent, do they finally cross the person / property line?

If a learning AI like Deep Mind were to begin observing how to run a company today one rule, it would likely generate is that there is either an implicit or explicit focus that by generating profits a business fulfills its obligations to society[3].  This is the shareholder wealth maximization / shareholder primacy assumption and long a source of debate (Mulligan, 1986; Shaw, 1988) with many challenges to Dodge v. Ford[4] around the legal uncertainty of duty to maximize profits. This is isolationist non-contextual idea ignores that society is made up of many systems(Roth & Schütz, 2014) that interact and are interdependent and any action in one is reflected positively, neutrally  or negatively in the others. This is an issue for even the “lowest” level AI’s – will sustainability be an element of a procurement AI’s decision process or simply cost and delivery?

Even without being in charge, the continuing rapid advances in artificial intelligence, cognitive computing and robotics will see increasing levels of choice being made by our machines. Some of this choice will be in the “social” realm of business – particularly resource allocation and social tradeoffs (hit the school bus or the road worker[5]). It is important to provide them with a sound theory and praxis for deciding who gets what, when where and how. The alternative is to leave it to them to learn from modeling us, or worse, people who think they know how to make those decisions because they made them in the past teach or program them with algorithms derived from executive’s and manager’s gut, ideology and expediency.

Historically we have also seen advances in technology more than compensate for the human job loss created by automation with new job creation from new work to be done and more economic activity for existing work. This may not be the case with the next generation of automata. The current and last generation of robots lives in a world where they are partitioned off and separated from humans for fear they might hurt humans or vice versa. The coming generation is being designed to not only live in the human world but interact directly with humans – receptionists, nurse’s aides, child workers. Likewise, AIs of the past were either constrained to well-defined problems spaces in need of deep reoccurring expertise or were developed as idiot savants that could reason about anything if it was one specific reasoning process. One look at an IBM Watson commercial and we know this is not the case – discussing music with Bob Dylan and storytelling with Stephen King! This next generation will be the beginning of the “human jobless economy,” or at least how we think of jobs. Without a sound, theoretical understanding of how our society really works and what will change when this happens (how do we think about the “dole” when the whole human society is on the “dole”) we will likely experience cataclysmic upheaval, and that is never a good thing. We need to anticipate, design and prepare the necessary transition, including perhaps redefining what it means to be human and what humanity’s role is in society.

Bell, H. A. (2011). Toward a Value Inclusive Theory of Economic Decision-Making: A 'New Science' Model. European Journal of Social Sciences, 21(4), 638-649.

 

Glavas, A., & Mish, J. (2014). Resources and Capabilities of Triple Bottom Line Firms: Going Over Old or Breaking New Ground? Journal of Business Ethics, 127(3), 623-642. doi:10.1007/s10551-014-2067-1.

 

Mulligan, T. (1986). A Critique of Milton Friedman's Essay 'The Social Responsibility of Business Is to Increase Its Profits'. Journal of Business Ethics, 5(4), 265-269.

 

Porter, M. E., & Kramer, M. R. (2011). CREATING SHARED VALUE. Harvard Business Review, 89(1/2), 62-77.

 

Roth, S., & Schütz, A. (2014). Ten systems: Toward a canon of function systems. Cognitive Social Science eJournal, 6(134).

 

Shaw, B. (1988). A Reply to Thomas Mulligan's "Critique of Milton Friedman's Essay 'The Social Responsibility of Business to Increase Its Profits' ". Journal of Business Ethics, 7(7), 537-543.

Stout, L. A. (2012). The Shareholder Value Myth. [electronic resource] : How Putting Shareholders First Harms Investors, Corporations, and the Public: San Francisco : Berrett-Koehler Publishers, 2012.

Mulligan, T. (1986). A Critique of Milton Friedman's Essay 'The Social Responsibility of Business Is to Increase Its Profits'. Journal of Business Ethics, 5(4), 265-269.

 

Porter, M. E., & Kramer, M. R. (2011). CREATING SHARED VALUE. Harvard Business Review, 89(1/2), 62-77.

 

Roth, S., & Schütz, A. (2014). Ten systems: Toward a canon of function systems. Cognitive Social Science eJournal, 6(134).

 

Shaw, B. (1988). A Reply to Thomas Mulligan's "Critique of Milton Friedman's Essay 'The Social Responsibility of Business to Increase Its Profits' ". Journal of Business Ethics, 7(7), 537-543.

Stout, L. A. (2012). The Shareholder Value Myth. [electronic resource] : How Putting Shareholders First Harms Investors, Corporations, and the Public: San Francisco : Berrett-Koehler Publishers, 2012.

 


[3] This is the classic position established by: “The Social Responsibility of Business is to Increase its Profits” by Milton Friedman, The New York Times Magazine, September 13, 1970. It is argued that social welfare is maximized when all firms focus on maximizing their own firm’s value. Firms increase overall social value by creating products or services that are worth more than the cost to produce them and in effect creating a larger pie for the entire society.

[4]“Dodge v. Ford Motor Company, 170 NW 668 (Mich 1919) is a case in which the Michigan Supreme Court held that Henry Ford had to operate the Ford Motor Company in the interests of its shareholders, rather than in a charitable manner for the benefit of his employees or customers. It is often cited as affirming the principle of "shareholder primacy" in corporate America.” (Wikipedia, Dodge v. Ford Motor Co.) The contemporary challenges hold that shareholder wealth maximization is an aspirational standard of conduct for officers and directors, not a legal mandate. The business judgment rule, which was also upheld in Dodge v. Ford, protects many decisions that deviate from this standard.

Cognitive Curmudgeon - the AI Glass is Half Empty and it has a leak