Economist Dambisa Moyo says CEOs must play a role in sustaining the consumer class as AI eliminates jobs
- In today’s CEO Daily: Diane Brady interviews economist Dambisa Moyo.
- The big leadership story: Trump brushes off concerns about oil prices as they surge past $100 a barrel.
- The markets: The oil price shock is causing a bruising global selloff.
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Good morning. Today is the 250th anniversary of the publication of The Wealth of Nations by Scottish economist Adam Smith, a foundational text of modern economics that inspired the U.S.’s founders to create an economy based on free markets, fair taxation, a natural division of labor and a state focused on protecting the basic conditions for that to work. It’s a poignant anniversary at a time when the U.S. economy is losing jobs and mercantilism is on the ascent amid war and tariffs.
I spoke on Friday with Dambisa Moyo, a noted economist, author and baroness since being appointed a life peer in the U.K. House of Lords in 2022. She is giving a speech later today on Adam Smith at the University of Edinburgh. (You can watch the livestream here at 2 p.m. ET)
“Time and time again, Adam Smith has shown that free markets, free people, and deeper capital markets are all net positive for progress,” says Moyo, who also points to Smith’s earlier treatise on moral sentiments when imagining how he’d view the world of today. “He thought human beings would be more compassionate … he would think there’s not enough morality in how business leaders and individuals are thinking about inequality and the cost to society.”
Moyo argues that we’re in a moment where technology could usurp economics in the way that economics once usurped philosophy and religion, a world where “rulers will rule based on technology” and growth may come without jobs. Unlike OpenAI investor Vinod Khosla, who paints a sunny scenario of shared abundance in a recent podcast conversation with Fortune Editor-in-Chief Alyson Shontell, Moyo shares my concern that jobless growth is not going to be good for society.
“I don’t think a world where people are doing nothing is a world that people will feel satiated in an aspirational way,” says Moyo, pointing to countries where a surplus of young men without jobs has already heightened unrest, violence, addiction rates and illness.
In her view, the scale and speed of disruption from AI is changing the calculus of what it means to run a good business. Much like Henry Ford understood the need to help create enough wealth among workers to buy his cars, business leaders need to help sustain the consumer class through incomes and meaningful employment.
“If you want to protect your license to trade, it’s no longer going to be a world where you say, ‘Too bad, government, your unemployment rate is now at 20%—that’s got nothing to do with me,’” Moyo says, noting that a narrow tax base with a small number of highly profitable firms and highly paid workers undermines the foundations of policy-making inspired by Smith’s concepts of scarce labor and capital.
Moyo’s advice to business leaders: “You need to start to think, ‘well, maybe we can pay a little bit more in terms of royalties or on electricity bills.’ Think about retooling, reskilling, taking on a little bit more of those costs and thereby becoming more of a partner if you want to protect your license to trade.”
Contact CEO Daily via Diane Brady at diane.brady@fortune.com
This story was originally featured on Fortune.com