Star Economist: Sweden Can Become AI Pioneer Nation

The international star economist Daron Acemoglu sees a great danger that AI development will lead to people losing their jobs, and that the rich companies will become richer. But there is another possibility – which builds on the Swedish model.

» Updated:

» Published:

Star Economist: Sweden Can Become AI Pioneer Nation
Photo: Lars Pehrson/SvD/TT

Share this article

The international star economist Daron Acemoglu sees a great danger that AI development will lead to people losing their jobs, and that rich companies will become richer.

But there is another possibility – which builds on the Swedish model.

Daron Acemoglu is a professor at the American MIT and is one of the authors behind the acclaimed books "Why nations fail" and "Power and progress".

In the latter, he and co-author Simon Johnson argue that it is a mistaken view that technological leaps automatically bring greater prosperity to society as a whole, and that history is full of examples where this is not the case. Acemoglu sees signs that many companies view AI as a way to replace people with machines.

I am more worried today than two years ago, because the amount of resources concentrated in the hands of the largest and most powerful companies is only increasing, he says in an interview with TT, in connection with his participation via link in the Social Democrats' economic-political seminar in Almedalen.

More cooperative spirit

But he believes that there is another possibility. That AI develops to help employees become more productive. This is also something that can benefit companies.

He draws a historical parallel to Sweden in the 1930s, where the foundation of the Swedish model was laid with the Saltsjöbaden Agreement.

The pact that emerged then was a more cooperative spirit between companies and labour, and that companies remained profitable. I do not believe that there is any evidence that companies would have adopted these rules on their own without the Social Democratic government.

He would like to see Sweden, with pressure from politics, build on the model to drive innovation, profitability, and increased prosperity within AI.

Not shorter working hours

Daron Acemoglu, on the other hand, does not believe in striving for shorter working hours, even if AI makes jobs fewer.

I am not super keen on shorter working weeks. If we become more productive, wages increase, and workers say they want to work less, then fine.

However, one cannot replace a 40-hour week with two people working 20 hours each, according to him.

If you do that, work becomes expensive, and then there are no incentives to increase the number of employees, he says.

On the other hand, he believes in a shift from office work to another type of job.

I believe that many meaningful jobs will involve interacting with the physical world, it is the healthcare sector, the education sector, in factories, in crafts – gardeners, electricians, and carpenters. We must find a way to make those jobs more productive with AI, so that people can gain higher expertise in their work.

Turkish-American economist born 1967 in Istanbul, Turkey.

Despite his relatively young age, he has been among the top candidates for the economics prize in memory of Alfred Nobel several times, including on the economics site Ekonomistas' annual vote.

His research focuses on what is usually described as political economy, economic history, and growth studies.

Tags

Author

TTT
By TTEnglish edition by Sweden Herald, adapted for local and international readers

More news

Wall Street Mixed as Fed Cuts Interest Rate but Signals Caution

Wall Street Mixed as Fed Cuts Interest Rate but Signals Caution

Fed Lowers Interest Rate by 0.25 Points, Signals More Cuts This Year

Fed Lowers Interest Rate by 0.25 Points, Signals More Cuts This Year

China Urges Tech Giants to Halt Nvidia AI Chip Purchases

China Urges Tech Giants to Halt Nvidia AI Chip Purchases

Jerry Greenfield Departs Ben & Jerry's, Citing Silencing by Unilever

Jerry Greenfield Departs Ben & Jerry's, Citing Silencing by Unilever

Avanza Introduces Digital Trading on London Stock Exchange

Avanza Introduces Digital Trading on London Stock Exchange

Uber Introduces Safari Tours in Kenya's Nairobi National Park

Uber Introduces Safari Tours in Kenya's Nairobi National Park

Swedish Inflation Expectations Rise Slightly in Latest Survey

Swedish Inflation Expectations Rise Slightly in Latest Survey

Sweden's Unemployment Rate Stays High in August

Sweden's Unemployment Rate Stays High in August

Stockholm Stock Exchange Sees Modest Gain Led by H&M

Stockholm Stock Exchange Sees Modest Gain Led by H&M

Verisure Returns to Stockholm Stock Exchange with Major Listing

Verisure Returns to Stockholm Stock Exchange with Major Listing

Oracle and Partners to Acquire TikTok's US Operations

Oracle and Partners to Acquire TikTok's US Operations

Taco Bell to Open First Sweden Location in Stockholm Winter 2025

Taco Bell to Open First Sweden Location in Stockholm Winter 2025

Retail Outlook Brightens as Consumer Spending Set to Boost Economy

Retail Outlook Brightens as Consumer Spending Set to Boost Economy

SBAB Predicts Stable Housing Prices Despite Autumn Interest Rate Cut

SBAB Predicts Stable Housing Prices Despite Autumn Interest Rate Cut

Asian Stock Markets Open Mixed Amid Fed Rate Cut Speculation

Asian Stock Markets Open Mixed Amid Fed Rate Cut Speculation

Microsoft Announces $30 Billion Investment in UK Cloud and AI Infrastructure

Microsoft Announces $30 Billion Investment in UK Cloud and AI Infrastructure

US Stock Market Sees Slight Decline Amid Retail Sales Data

US Stock Market Sees Slight Decline Amid Retail Sales Data

Trump Extends TikTok Deal Deadline to December 16

Trump Extends TikTok Deal Deadline to December 16

NHTSA Investigates 174,000 Tesla Cars Over Door Handle Issues

NHTSA Investigates 174,000 Tesla Cars Over Door Handle Issues

Ford Cuts 1,000 Jobs at Cologne Factory Amid Weak Electric Car Demand

Ford Cuts 1,000 Jobs at Cologne Factory Amid Weak Electric Car Demand