The AI Revolution: Progress, Power and the Price of Transformation

 

This article was inspired by a conversation Raj, John and I (buddies from school) had this morning. We were discussing AI, the future of work, the rising cost of living and the possibility that we are approaching an economic transformation unlike anything we have experienced in our lifetime.

As always, the conversation wandered into politics, economics and the occasional speculative detour. But one question stayed with me, What if the economic disruption we are experiencing today is not simply a consequence of technological progress, but the painful beginning of a transition towards an entirely different economic model?

Raj and John, I think we are right to recognise that technological revolutions have always displaced jobs while creating new opportunities. We have seen this happen repeatedly.

The Industrial Revolution displaced agricultural labour and created factory work. The Information Revolution automated clerical and administrative tasks while creating opportunities in computing, telecommunications and data management. The digital transformation that followed created entirely new industries, occupations and business models.

Today, we are witnessing the next stage of that evolution.

AI is already displacing certain categories of work while creating new opportunities in fields that barely existed a few years ago. The opportunities for reskilling are enormous, and countries like Malaysia should be investing aggressively in developing the talent needed to participate in this new economy.

But I think we need to be careful about assuming that this transition will follow the same pattern as previous ones.

Earlier technological revolutions largely transformed the tools of human labour. AI, particularly when combined with robotics, has the potential to transform the economic necessity of human labour itself.

The question is no longer simply whether new jobs will emerge. It is whether they will emerge quickly enough, in sufficient numbers, and with accessible entry requirements to absorb those displaced.

A highly productive economy does not necessarily mean a prosperous population.

We can already see the beginnings of this problem in Malaysia. Many workers are trapped in jobs that offer little progression, while contract employment and gig work increasingly provide income without the security or benefits traditionally associated with permanent employment. For some, the available alternatives are limited to jobs such as Grab driving and food delivery.

These are legitimate forms of work, but they are not a substitute for a healthy economy that offers people meaningful opportunities to develop their skills, build careers and improve their standard of living.

If AI creates enormous wealth but concentrates it among a relatively small group of technology companies, capital owners and highly skilled workers, then we may end up with an economy that is more productive but less equitable.

And this brings me to a more speculative thought.

Could the economic disruption we are experiencing today be the beginning of a transition towards a deflationary economy?

I do not mean that the current inflation is necessarily being deliberately engineered to prepare humanity for some technological utopia. That would be an extraordinary claim, and I have no evidence to support it.

But I do think we need to distinguish between the inflationary pressures of the present economic system and the deflationary potential of the technology being developed.

Today, we are still operating within an economy in which production depends heavily on human labour, energy, raw materials, transportation and capital. When these inputs become more expensive, the cost of producing goods and services rises. Higher oil prices, for example, can feed through into transportation, manufacturing, food production and eventually the broader cost of living.

But imagine a future in which AI and robotics dramatically reduce the labour required to produce goods and services. Imagine autonomous systems managing farms, factories, logistics networks and healthcare facilities, while advances in energy technology reduce the cost of powering them.

In such a world, the marginal cost of producing many goods and services could fall dramatically.

The important distinction is that technological abundance does not automatically produce lower consumer prices. The benefits depend on who owns the technology, how competitive markets remain, and whether productivity gains are passed on to consumers or captured as profits.

This is where the current economic transition becomes particularly interesting.

We may be witnessing two opposing forces operating simultaneously, an inflationary economy struggling with the costs and constraints of the old system, and an emerging technological economy capable of producing goods and services at radically lower costs.

The question is whether the second will eventually overwhelm the first.

Perhaps, in the long run, the cost of producing food, healthcare, education and other essential services will fall so substantially that the relationship between income and living standards will change.

Perhaps money will become less important as a determinant of access to basic necessities, even if it remains essential for scarce resources, ownership and influence.

But we should not confuse that possibility with an inevitable outcome.

Abundance does not guarantee equality. A world in which machines can produce almost everything could still be a world in which a small minority owns almost everything.

And that is why the geopolitical dimension matters so much.

The United States cannot afford to slow down if China continues to accelerate. China cannot afford to slow down if the United States continues to accelerate. Other countries face the same dilemma, where the cost of falling behind in AI could be economically and strategically devastating.

Even the AI companies themselves have warned about the risks of moving too quickly. Yet the competitive pressures are immense. No company or country can easily afford to step back if doing so might allow a rival to gain a decisive advantage.

This creates a peculiar situation in which everyone recognises the potential dangers, but everyone feels compelled to continue.

The race is not simply about building better technology. It is about determining who will shape the next phase of human civilisation.

And this brings me to a historical pattern that I find particularly compelling.

The Renaissance challenged established religious and intellectual authority, placing renewed emphasis on human potential, knowledge and individual inquiry. The Industrial Revolution transformed production, concentrated economic power and helped establish the foundations of modern capitalism. The Information Revolution transformed communication, commerce and the global circulation of ideas, giving technology companies unprecedented influence over how people consume information and understand the world.

Each revolution changed not only how people worked, but also how they thought.

Kipling's The White Man's Burden, which I have written about previously, seems to fit multiple narratives across these historical transformations. The language of civilising the world has evolved, but the underlying assumption that those possessing superior knowledge, technology or economic power have a responsibility to lead humanity remains remarkably persistent.

During the colonial era, imperial powers justified their domination through the supposed moral duty to civilise the world. During the Industrial Revolution, the promise of progress and prosperity helped legitimise the expansion of Western economic and political influence. During the Information Revolution, American media and technology companies became powerful instruments of cultural influence.

We grew up watching Mickey Mouse and Donald Duck, drinking Coke at Highway Café (the go to café after school), and embracing the promise of a better life shaped by Western consumer culture. We saved money to participate in that world, often without questioning how deeply our aspirations had been influenced by it.

Today, the same dynamic is emerging around AI.

The countries that develop the most powerful AI models will not merely control an important technology. They will have an enormous influence over the knowledge, values and intellectual frameworks through which future generations understand the world.

This is why the AI race is so consequential. It is not simply about who builds the most advanced machines. It is about who gets to define the future of human progress.

And perhaps this is where the greatest irony lies.

The technologies that once enabled the expansion of consumerist ideology may eventually undermine the economic system that sustains it.

For decades, consumerism has been driven by the promise that greater productivity, higher incomes and endless economic growth will lead to greater human fulfilment. But if AI and robotics eventually make goods and services abundantly available at dramatically lower costs, then the relationship between consumption, employment and human wellbeing may have to be reconsidered.

Perhaps the next great transformation will not be about teaching people to consume more, but about discovering what gives life meaning when consumption is no longer the primary measure of success.

That, to me, is the real challenge of the AI Revolution.

It is not simply whether machines will take our jobs, whether inflation will eventually give way to deflation, or whether the United States or China will emerge as the dominant AI power.

It is whether humanity can move from an economic system built around scarcity, competition and consumption to one in which technological abundance genuinely improves the lives of the many rather than merely enriching the few.

The potential is extraordinary. But so are the risks.

And until we figure out how to manage this transition, we will still be paying more for everything while wondering whether the future being promised to us is actually going to materialise.

Maybe it will. Maybe it won't.

But one thing seems increasingly clear, the next great revolution will not simply change how we work. It may force us to reconsider why we work, what we value, and what it actually means to live a good life.

Cheers.

ravivarmmankkanniappan@1105041120263.15239° N, 101.66924° E

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