Marcelo de Oliveira Elias, PhD in Constitutional Law from IDP, Master in Commercial Law from The London School of Economics and Political Science (LSE) and Bachelor of Laws from PUC/RJ.
While there is a fierce public discourse about technology-driven unemployment and income inequality, the automation debate has historically ignored the problem of taxation. That changed recently. On February 16, 2017, the European Parliament rejected a proposal to impose a “robot tax” on their owners to fund support for unemployed workers (1).
AI technologies, in turn, have an even greater disruptive power for the ordinary worker, given the training and educational background they usually have. Thus the bank Merrill Lynch states that artificial intelligence will eliminate 9 trillion in labor costs (2).
A new technological revolution is happening right now. “Robotization” and “automation”, combined with artificial intelligence, are gaining a strength never seen before. We have already been through other industrial revolutions, inventions and sociological events that had striking impacts, from the invention of the wheel, the mastery of agriculture, the invention of vaccines and war machines, to the arrival on the Moon.
Abbott (3) observes that exponential advances in computing, artificial intelligence and robotics are enabling automation in an ever wider range of applications and sectors. Because of these continuous innovations, both academics and industry professionals have begun to predict with great conviction that automation may lead to a phenomenon called "technological unemployment" on a considerable scale in the near future. This term refers to the loss of jobs attributed directly to technological advances.
As an illustration of this trend, the McKinsey Global Institute, a respected body in market analysis and technology trends, has for some years been emphasizing the disruptive potential of artificial intelligence and related technologies, which may unfold at an immeasurably greater speed than the transformations experienced during the Industrial Revolution, with an impact that will fundamentally reshape society and the economy (4).
This forecast points to enormous social and economic changes that will challenge existing structures and demand robust adaptive responses from society. Research and development in the field of machine learning have gained remarkable momentum thanks to the constant increase in data availability, storage capacity, processing power, advances in software, the presence of qualified specialists and the investments needed to sustain these advances (5)
Dehumanization of work
Since the 1970s, we have seen an acceleration in the speed of general-purpose processors, with a further boost thanks to hardware specialized in machine learning. The internet has played a crucial role as an abundant source of images, videos, audio, text and semi-structured data, with more than 10^18 (ten to the eighteenth power) bytes added every day.
The discussion about new technology and employment is not new, however. In 1962, President Kennedy declared that “I regard it as the major domestic challenge, really, of the '60s, to maintain full employment at a time when automation, of course, is replacing men” (6)
However, the speed and voracity of the current change raise an alarm and a need for answers hundreds of times greater, so as not to affect employment and income distribution even further. To give an idea of the speed of change, in 1990 the three largest companies in Detroit – in the automotive sector - had a market capitalization of 36 billion US dollars and 1.2 million employees; in 2014, the three largest in Silicon Valley had a market capitalization of 1.09 trillion dollars and 137,000 employees.
Ramaswamy (7) observes that the deployment of robots and automation represents the most current technological innovation in productive activities, and that its effect on jobs and wages is a central theme in studies on technological transformation, economic development and labor market dynamics.
In 2015, there were approximately 1.6 million AI-capable robots in operation, according to UNCTAD 2017 data. Projections point to growth in that number, reaching 2.5 million by the end of 2019. This expansion is expected to continue, with Boston Consulting Group estimates suggesting that there will be between 4 and 6 million active industrial robots by 2025, according to two different scenario analyses (8)
A rethinking of socioeconomic and political concepts will be needed to face the inevitable challenge of the developments to be achieved by artificial intelligence and biotechnology, since the entire population of the Earth will be affected to a greater or lesser degree, for example with regard to the labor market. Manual (physical) labor has always been the most affected since the beginning of the Industrial Revolution. With the possibility of acquiring
In Harari's words (9), such events may soon push billions of humans out of the labor market and create a huge new class with no usefulness, leading to social and political upheavals that no existing ideology is prepared to deal with. In the 20th century, the masses rose up against exploitation and sought to turn their vital role in the economy into political power. Now the masses fear irrelevance, and are anxious to use their remaining political power before it is too late.
As in other times, new jobs for human workers will certainly be created. But this task is likely to be harder. In the past, a peasant who handled his animals to plow the land could easily qualify for a job in a car factory, where the production line ran on a reasonable amount of repetitive physical strength. Today, however, competition with automated workers is fierce. In purely economic terms, there is no justification for employing a hundred workers for welding or assembly on a production line, with the risk of accidents, when compared with the investment in a robot.
The other side - Increased productivity
The increase in labor productivity suggests that, with these transformations, each worker may be able to produce more or carry out tasks more efficiently. This can be positive for companies and for the economy in general, but it also raises questions about the distribution of benefits, wages and the demand for workers. The widening of skills gaps indicates that, with rapid transformations across industries, there may be a mismatch between the skills workers have and those required in the modern labor market. This may lead to the need for reskilling, training and continuing education.
In the field of law, we can cite examples of document review:
- In Due Diligence work, for example, through the ability to process large volumes of legal information quickly, identifying what is possibly relevant or signals a risk.
- In researching laws and case law.
- Smart Contracts, using blockchain and AI to manage contracts when predetermined conditions are met - or not. Prediction of Court Outcomes:
- Chances of success: when AI algorithms analyze historical data from particular courts or judges to predict the likelihood of success in court cases, helping lawyers make better-informed decisions.
Fraud Detection: detecting patterns of fraud in financial transactions and other legal documents, increasing security and compliance.
E-discovery: Using AI to identify and collect relevant electronic information in litigation, facilitating document review and production.
Automated Document Drafting: AI tools help automatically create standard legal documents, such as contracts, wills and petitions, based on predefined templates.
Virtual Legal Advice: AI platforms provide initial legal guidance, answering common questions and advising clients on their rights and legal options before a consultation with a lawyer.
We understand that all the possibilities above need to pass the scrutiny of ethics and compliance rules, including those of the Brazilian Bar Association (Ordem dos Advogados do Brasil), among others, in order to be implemented and used day to day, all the more so when it comes to advice, decisions and sensitive personal and corporate information.
In conclusion, although artificial intelligence represents a significant advance in the legal profession, providing efficiency, accuracy and new capabilities, it is essential that it be used with caution. The indiscriminate adoption of AI can lead to excessive dependence on algorithms, potentially compromising the quality of human judgment and the personalization of legal services. In addition, ethical issues such as data privacy and algorithmic impartiality need to be carefully considered. AI should be seen as a complementary tool that, when used in a balanced and responsible way, can improve the practice of law without replacing the critical and irreplaceable role of legal professionals.
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(1) ABBOTT, Ryan; BOGENSCHNEIDER, Bret. Should Robots Pay Taxes? Tax Policy in the Age of Automation. Harvard Law & Policy Review, vol. 12, 2018. Electronic Journal, v. 12, 2017, p. 5. Available at: <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2932483>. Accessed: Apr. 22, 2019.
(2) Ibid., p. 8.
(3) Ibid., p. 2-3.
(4) On this point, see: CHUI, Michael et al. McKinsey Technology Trends Outlook 2023. McKinsey Digital, 2023, available at: <https://www.mckinsey.com/capabilities/mckinsey-digital/our-insights/the-top-trends-in-tech>; and also the 2013 report in MANIKA, James et al. Disruptive technologies: Advances that will transform life, business, and the global economy, 2013, available at <https://www.mckinsey.com/capabilities/mckinsey-digital/our-insights/disruptive-technologies>.
(5) RUSSELL, Stuart; NORVIG, Peter. Inteligência Artificial - Uma abordagem moderna. Transl.: Regina Célia Simille. 4th ed. Rio de Janeiro: GEN, 4th ed., 2022, p. 922.
(6) ABBOT, 2017, p. 4.
(6) RAMASWAMY, 2018, p. 18.
(7) Cf. LÄSSIG, Ralph et al. Robotics Outlook 2030: How intelligence and mobility will shape the future. Boston
(8) Consulting Group, 2021. Available at: <https://mkt-bcg-com-public-pdfs.s3.amazonaws.com/prod/how-intelligence-and-mobility-will-shape-the-future-of-the-robotics-industry.pdf>. Accessed: Oct. 10, 2023. See also, on the subject: ZINSER, Michael; ROSE, Justin; & SIRKIN, Hal. The Robotics Revolution: The Next Great Leap in Manufacturing. Boston Consulting Group, 2015. Available at: <https://web-assets.bcg.com/img-src/BCG_The_Robotics_Revolution_Sep_2015_tcm9-59492.pdf>. Accessed: Oct. 10, 2023.
(9) HARARI, Yuval. N. 21 Lições para o Século 21. São Paulo: Companhia das Letras. 2018, p. 28 and p. 39.
