What’s Going On With AI Regulation

Commentary

An employee at the artificial intelligence company Anthropic recently made a high-profile resignation from the company. His grounds were that the company was going too far and endangering the future of humanity. He could no longer work there in good conscience. This announcement sent shock waves through this industry and led even to calls to ban AI.

Deeper forensics of the post raised some red flags. He was not an important player at the company and had only just recently opened an account at X. His first post was super viral and garnered more than 150 million views, for no apparent reason. It became the subject of a multitude of articles in the mainstream press nearly immediately.

Speculation began to grow that AI was making super bugs and bioweapons, while plotting the demise of the human race. Industry leaders did not deny this. Indeed, most of them seem ready to be regulated, even calling for the government to intervene. They are so good at what they do, they say, that they are scaring themselves.

Regulate us please!

Meanwhile, OpenAI had already pledged to slow down development in the interest of safety. It is delaying its initial public offering on public markets to work on safety, it says, but this conveniently allows the company to delay reporting its untenable financial position. And Anthropic is saying it wants government to have a stake in the company.

Can you imagine a private company begging for government regulation and ownership? It happens. It’s a long pattern.

We might ask: What is really going on beneath the surface? It is likely that this relatively new industry is following the path of many industries before. They are trying to get ahead of inevitable regulation in order to dictate the terms, restrict competition with the top players, and embed themselves as a controlling power within the agencies that will be in charge. They want to win the game and make sure that no one else ever plays it.

Nothing is surprising about this path. It’s been going on this way for most of modern history. The railroads were the major backer of the Interstate Commerce Commission. The vaccine industry was behind the Biologics Control Act of 1902. The meatpackers pushed for the regulations that came to that industry in 1906. The largest banks and financial houses set up the Federal Reserve to become its own industrial cartel. The top computer and software makers were the controlling force behind the antitrust legislation that seemingly targeted them in the 1990s.

The cultural historian Walter Kirn summarizes the way this works:

“Most every big new American industry grows to a certain size and status and wealth and then cuts the government (basically the cops) in on the sweet deal in order to protect its turf, scare off rivals, and just relax a little with its dough. The industry does this, oddly, by harping on the alleged dangers posed by the industry itself—if it goes ‘out of control.’

“Thus pharma protects us from unsafe drugs, Hormel and Tyson from unsanitary meat, and so on until now, when big AI proposes to protect us from bad AI. It will even sponsor some ‘going out of control’ to prove its point and secure its own advantages. It may even let itself be ‘broken up’ a bit. Later on in the cycle, of course, it can always complain of ‘regulatory burdens,’ once it’s fat and has the neighborhood to itself and feels like doing whatever the heck it cares to—and doing it the easy way.”

These are powerful truths about the history of regulation. It would make perfect sense that AI is going in the same direction.

Another example is how the crypto and Bitcoin industry is pushing for legislation to control it too. Having been involved as early as 2013, I saw this developing in real time. Some people in the industry saw the innovation as a new and promising path to freedom. Others saw it as a potentially profitable innovation, and it was that group that early on began plotting a regulatory structure. A decade later, all the pieces of a cartel were in place, while the early idealists—and the ideals—were pushed aside.

As I watched this unfold, I was grateful for a front-row seat to observe how the administrative state gains power with full cooperation of industry leaders. That lesson helped me understand how the Federal Reserve came to be and how the Food and Drug Administration arose as a beast that codifies poisons as safe and effective. The point applies to hundreds of these agencies and thousands of pieces of legislation.

Ideological habit leads us to believe that government and industry are at odds. This is true as regards small business and farmers, including local companies that deal with oppressive regulations and taxes. But for industry leaders, it is a different matter. They favor these regulations to restrict competition in their own industry to stay on top.

Some years ago, there was a debate about the future of the minimum wage. A top lobbying force for increasing the national wage floor was Walmart. People would cite this fact in defense of the increase without realizing that they were giving the game away. Of course Walmart would favor this because it can afford it and it makes commerce more difficult for its competition.

A new book by Patrick Newman is called “Cronyism: The Rise of the Corporate State.” It exposes the long history of exactly this dynamic from the 19th century through the 20th century. At every stage of government growth, we find the hand of big business at work. It’s the most thorough-going effort to date to reveal the myth that the government is always a menace to business. As regards big business, it finds a working partner with big government.

The No. 1 goal of the AI industry right now is consolidation, maintaining a proprietary model of profitability, and the restriction of competition. Its plan is to panic the public into crying out for the regulation that industry itself wants—same as the railroads, the banks, the securities industry, pharmaceuticals, telephones, and media. This is precisely why Milton Friedman once said that the most ferocious enemies of capitalism are the capitalists themselves. It sounds paradoxical until one thoroughly understands the history and logic of interventionism.

Meanwhile the pages of the daily newspapers are filled with terrifying scenarios of what AI will do to us. Look carefully and you will find who and what is fueling this panic. It is the industry itself. That should tell you something.

Meanwhile, no one has any plan to deal with the actual threat of AI. We are raising an entire generation of students who have lost incentive to really learn anything at all. The Massachusetts Institute of Technology reports that its traditional study groups are gone and office hours of professors are going completely unused. This reality is what I find terrifying.

In a few years, the first generation of students will be hitting the job market having been fed a steady diet of AI slop for years. They will lack understanding and the skills necessary to drive authentic progress.

No, AI will not kill us all. The real problem is not technological but cultural. It threatens to make us all stupid.

Nothing about federal regulation will stop this. The control of AI will only happen classroom by classroom and home by home. It comes down to how we treat it and not what government does to regulate it. All history shows that when the government gets involved, there is always a hidden hand that belongs to the regulated industry itself.

Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.