Moneybeat: Tools and truth

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MARY REICHARD, HOST: Coming up next on The World and Everything in It: The Monday Moneybeat.

NICK EICHER, HOST: It’s time now to talk business, markets and the economy with financial analyst and advisor David Bahnsen. David heads up the wealth management firm the Bahnsen Group, and he is here now. Good morning to you.

DAVID BAHNSEN: Well, good morning, Nick. Good to be with you.

EICHER: Well, David, as we talked last week, you have been unpacking a lot from that recent meeting with your team at the Bahnsen Group, and this week you’re writing about the AI revolution in your Dividend Cafe.

I’d like to read just a brief section from that to set this up:

“The fear at hand concerning AI is quite simple. Generative artificial intelligence can do so much that over time, it will severely diminish the need for human beings in various economic tasks—functions like data entry, customer service, content creation (and that one hits close to home), as well as administration and bookkeeping and financial modeling. These are most frequently cited as highly vulnerable to the improved efficiency that AI represents.”

So David, you’ve made the case, though, that fears of mass unemployment from AI are overblown. Why do you think that narrative has gained as much traction as it has?

BAHNSEN: Well, first of all, I want to be clear that I have made the point that net massive unemployment is overblown. And that’s different in the sense that it is entirely possible a lot of jobs are lost. But the question is: what jobs are lost that are not replaced? A net substantial increase in unemployment—because that’s very different than someone loses one job but gets another.

I think that where a lot of this hand-wringing comes from is incredibly common. As there is progress and evolution in technology and whatnot, there’s a lot of historical precedent. And I would be willing to say, even though I don’t say this kind of thing very often, that I can understand why—on top of this historical normalcy of fearing job loss from technological advancement—this is happening at a different speed than we’ve seen before. So it also causes people to believe that this time is different.

I make the historical argument that the Industrial Revolution eliminated a lot of jobs, and I actually believe that was more profound—the basic displacement of so much of the agricultural economy because of the ability of machines to do things that previously human hands did. That was a more substantial change in society than even this is. And yet, it more than doubled the net new jobs that came out of it.

But I think a lot of people can look to that data point. I make a similar point, by the way, about the digital revolution—what has happened since the advent of computers over the last 40 and 50 years. I think some people are willing to accept the historical case for how the Industrial Revolution and digital revolution did not decimate job holding for tens of millions of people in America—but then would say, “However, David, you’re wrong on this one,” that the AI moment strikes us as so profound and so different that a lot of the aforementioned sectors you brought up will unfortunately see total lack of employability within them.

This is where I believe that Christian anthropology becomes so important—a Christian understanding of the human person. And I also believe for Christians to understand some basic realities of economics that are themselves Biblical and rooted to our understanding of creation.

And I avoid hand-wringing here—and some of the same panic that many others have in this AI moment—because of those principles that I’m sure we’re going to get into.

EICHER: All right, so you’re optimistic long term, but what about that short-term pain—when jobs are lost before new ones are created? Does that not also create real dislocation? And is there anything that we can do to kind of prepare for that?

BAHNSEN: Well, I don’t know that anybody can predict that it will be very serious dislocation—partially because right now we’ve seen virtually none of it. The estimates from very serious private data analytics firms are that we’re talking about somewhere between 17,000 to 27,000 jobs that have been displaced because of AI year to date, in an economy with 160 million-plus people in the labor market.

So I do not believe that those numbers are going to hold. I think the numbers will go higher. But when we say something is going to get very serious, it’s important to note that we’re moving from describing a reality to predicting a reality. And these predictions are going to be filled with fallibility, so I’m a little cautious of the hubris that goes into some of the predictions.

But that is not to say that I disagree with being cautious and being preparatory, however one can get in front of this, Nick. Now, whether or not we’re going to is outside of my purview. But speaking to the listeners that WORLD has, and what I happen to believe ought to be done: it’s really important that we tell the truth about it—that we speak to mobility and dynamism and retraining and vocational flexibility as very, very important things—and not speak to nostalgia. That, no, you have a birthright to the thing you were trained in, and that public policy must be geared to protecting the horse and buggy, so to speak, to use the old Industrial Revolution analogy.

It’s not a moral point of view, but it’s also not anywhere near a social, political, or economic—let’s call it—coherent point of view, either.

And I have no choice here, Nick, but to probably make a few enemies along the way, because there’s a real misunderstanding about the difference—or where the line is—between sympathy and sensitivity and speaking hard truths.

There is only one thing to do. If the AI moment wasn’t happening, everything I just said still applies. There are moments in which one’s job becomes obsolete, and their need for continued employability requires them to adapt. And that’s the term we use—called dynamism.

That dynamic adaptability is either geographical or connected to their own skill sets—their training, their education, their preparation—and sometimes it can be both.

Christians need to be vigorously advocating for robust dynamism in this moment.

EICHER: All right. Well, let’s talk now about what cannot be replaced.

David, you’ve written about the importance of wisdom, judgment, and virtue—and these are things that AI cannot seemingly replicate. What you call the “really human” things. What does that mean, practically, in the AI moment?

BAHNSEN: Well, it means that there is a total dishonesty from many who have been pioneers and leaders in AI about what machines are doing and not doing—and where the human is necessary and not necessary.

But on a go-forward basis, there are decisions that are made when a lot of data comes that are then requiring this time-tested idea of implementing wisdom. You know, the Proverbs makes a distinction between knowledge and wisdom. The Proverbs talks about discernment.

I do not accept at any level that there will ever be a time in which wisdom comes from a machine and not from a human. Nor do I accept that there will ever be a time that wisdom is not needed in a specific amount of economic calculus.

Now, very quickly—counting how many widgets are on a shelf at a warehouse in Sheboygan, Wisconsin—that’s not a wisdom calculus. That’s knowledge or data collection. I think humans are not going to be as needed in doing some of that, and computers are going to do it quicker and better. But then making decisions around some of these things—that’s what I’m referring to.

To the extent certain things are done quicker and cheaper, it adds to labor productivity, which then adds to the ability for there to be production of more goods and more services.

This is the economic principle that pains me—that more Christians do not understand—that God made us, out of the Garden of Eden, with infinite needs and wants. And the way in which our needs and wants are satisfied is with this thing called work. And that work is a verb of production. The production of goods and services meets human needs and wants—or it dies. We cannot produce things that don’t meet human needs or wants sustainably.

I believe those needs and wants are so infinite that the ability to produce things is infinite. And the fallacy at play here is that because AI can do more work, that it means there’s less need for human work. And that fallacy is zero-sum—that it believes there’s a finite amount of work to be done. I think there’s an infinite amount of work to be done.

And in fact, 68 million net new jobs—net being the key word here—were created out of the computer moment. About 57 million of them are in various forms of services. All but 11 or 12 million. Those are a lot of jobs that didn’t ever exist before.

That greater efficiency, greater productivity, greater technological advancement created new opportunity. Sometimes it required new training, sometimes it didn’t. It could be a horizontal move. But that is what’s going to happen out of AI.

Will it happen quicker than it’s happened before? I think it might. It also might not happen as quick as some people think, too.

What I want to encourage Christians to do is have faith that the immutable laws of creation have not changed—and the human person has not changed. And out of that, we find vocational opportunity.

EICHER: All right, one quick last question. How do you think we should be preparing the next generation for an AI-shaped economy?

David, in other words, what should schools, parents—even churches—be doing differently to help young people thrive?

BAHSNEN: This needs to be an entire book. It needs to be an entire series of lectures. It needs to be elaborated on with much more than we have time and space to do now.

But at a very high level, Nick, I can’t say this enough to Christian educators K through 12, and certainly at higher education: your focus does not need to be in teaching people how to do vocational tasks that AI is about to do.

The focus needs to be on raising men and women to be people of virtue, to be people of wisdom, to be people of sound judgment. These are things that cannot be displaced by computers.

Now, higher education should have been doing this even apart from AI. This should have been the bigger priority in terms of the moral formation of capable men and women—but all the more so in the AI moment.

To go compete, we need to be rethinking how we train young people to be professional, vocational, employed adults. And I think that this is the starting point. But I acknowledge it requires a lot more elaboration.

EICHER: David Bahnsen, founder, managing partner and Chief Investment Officer at The Bahnsen Group. He writes regularly for WORLD Opinions, and at dividend-cafe.com. David, thanks so much. We’ll talk to you next time.

BAHNSEN: Thanks so much, Nick.

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