The Economics of AI: How to Master the "Prediction Function"

2021/09/08

Around the mid-2010s, pessimism regarding AI, including its impact on employment, spread rapidly. This was likely due to the vague perception of AI as "robots with intelligence nearly identical to humans," leading to a preemptive fear of the "unknown" and "unintelligible."

What makes humans complex is that we often feel interest and curiosity toward such subjects. Even back then, while acknowledging that AI is fundamentally different from previous technological innovations—such as its encroachment into human tacit knowledge—I have consistently felt a desire to correct the excessive pessimism surrounding AI.

More than five years have passed since the period when pessimism toward AI spread. As the use of AI rapidly permeates business and daily life, excessive pessimism seems to be receding slightly. Furthermore, numerous books on AI have been published, many of which carefully explain its basic functions and provide specific examples.

However, what concerned me was that many discussions still "fail to see the forest for the trees." While people "look at the trees" by delving into AI's functions or introducing individual cases, they surprisingly rarely "look at the forest" by examining AI's impact on the economy and society as a whole. If that is the case, wouldn't it be meaningful to comprehensively evaluate the impact of AI on the economy and society, based on many systematically organized examples and research findings from my field of expertise, economics? This is what inspired me to write this book.

The title of this book is "The Economics of AI," but traditionally in the publishing world, it was common wisdom that books titled "The Economics of..." do not sell well. It is likely true that for the general reader, economics feels overly difficult and inaccessible. However, by introducing abundant examples, I have tried to ensure that even high school students without prior knowledge of economics can read through it.

I hope that for readers who embark on this journey to "see the forest" of AI, their view of it will change from something "unknown" to an "important partner that can build a bright future together with humanity through mutual complementation and coexistence."

The Economics of AI: How to Master the "Prediction Function"

Kotaro Tsuru

Nippon Hyoron Sha

200 pages, 1,870 yen (tax included)

*Affiliations and titles are as of the time of publication.