The trajectory of the global economy over the past century has been shaped by dramatic shifts that have fundamentally altered how we live, work, and relate to wealth. From the industrialisation ushered in by two world wars to the information technology revolution and, more recently, the transformative impacts of globalisation and artificial intelligence (AI), the impact on jobs and wealth distribution has been profound. This article will explore these key moments in economic history, with a special focus on how AI might disrupt traditional professions and exacerbate existing inequalities.
The Industrial Boom and the Demand for Jobs
The industrialisation that followed the world wars was a critical turning point in human history. With many industries working to support the war effort, production capabilities reached new heights, creating vast numbers of jobs. Factories sprouted across the world, particularly in Western countries, leading to an unprecedented era of growth. The ripple effect was seen in almost every sector, as the mechanisation of agriculture, transportation, and communication changed societies fundamentally. As soldiers returned from war, the post-war period saw governments focus on reconstructing economies, leading to widespread employment, economic stability, and the birth of the modern middle class.
The demand for jobs seemed insatiable, and a sense of optimism permeated economies that were, for the first time in modern history, truly global.
The IT Revolution and the New Skill Set
The dawn of the information age in the 1970s and ’80s coincided with globalisation, driving the world into a new era of economic integration. Technological advancements in computing and telecommunications connected distant parts of the globe, allowing for the rapid flow of capital, goods, services, and, crucially, information. These changes ushered in an era of unprecedented economic growth, but they came at a price—particularly for workers in traditional industries.
In many Western economies, technological progress, particularly in information technology (IT) and automation, displaced a vast number of traditional jobs, especially in manufacturing. The rapid globalisation of supply chains meant that many jobs, particularly in manufacturing, moved from high-wage countries to low-wage economies, particularly China. The “China shock” as it came to be known was a seismic shift in global manufacturing, as Chinese factories became the world’s production engine.
As a result, entire sectors had to adapt, with many workers forced to reskill and adapt to the new demands of a more tech-driven economy. While globalisation lifted millions out of poverty in emerging markets, particularly in China and India, it contributed to a hollowing out of middle-class jobs in Western economies.
COVID-19 and the Wealth Divide
The COVID-19 pandemic was, in many ways, a global watershed moment. It brought to light the vulnerabilities in global supply chains, highlighting the world’s over-reliance on China for manufacturing. More crucially, it widened the gap between the rich and poor. As governments and central banks pumped trillions into economies to keep them afloat, much of the wealth generated ended up in the hands of the ultra-rich, further entrenching existing inequalities.
A small cohort of billionaires—many in tech and finance—saw their wealth grow exponentially during the pandemic. Meanwhile, millions of people faced unemployment, particularly in service sectors that could not adapt to remote work. This growing divide has been a direct result of structural weaknesses in global systems of taxation and accountability, where wealth accumulation often escapes scrutiny.
AI: The Next Disruptor?
As the world grapples with the long-term consequences of the pandemic, a new disruptor looms on the horizon—Artificial Intelligence (AI). AI is expected to reshape the future of work by automating tasks that were once thought to be immune to mechanisation. While many jobs in manufacturing and low-skill sectors have already been affected by automation, AI threatens to take over more complex roles, including white-collar professions like law and accountancy.
AI’s ability to process vast amounts of data in real-time, perform legal analysis, and manage financial transactions could spell the end of the traditional legal and accounting professions. This raises important questions about the future of these industries and the role they play in wealth creation and distribution.
Accountants, Lawyers, and the Game of Wealth
For decades, accountants and lawyers have played a critical role in shaping the modern economic system. Many have helped corporations and wealthy individuals navigate the complexities of tax laws, often pushing the boundaries of legality to help clients avoid taxation or hide wealth offshore. The Pandora Papers, Panama Papers, and other investigations have exposed the extent of these practices, revealing a global web of shell companies, tax havens, and money laundering schemes designed to protect and grow the wealth of the ultra-rich.
The accountability gap has widened as legal and accounting professionals continue to exploit loopholes in national and international tax regimes. In many cases, they have been complicit in enabling massive tax avoidance, which has drained government revenues and exacerbated wealth inequality. Small, often poor, island nations have become central to these schemes, providing the legal framework for offshore banking and shell companies that hide trillions of dollars.
AI as a Tool for Greater Accountability
Interestingly, the rise of AI could change this dynamic. While AI threatens to displace many jobs, it also has the potential to enhance transparency and accountability. Governments could leverage AI to track financial flows, enforce tax laws more effectively, and reduce the scope for tax evasion and money laundering. AI could help regulatory bodies identify suspicious transactions or uncover hidden wealth, making it harder for the rich to game the system.
On the other hand, if AI is co-opted by the same systems that perpetuate inequality, it may exacerbate the divide further. The future of AI’s role in wealth distribution will depend largely on how it is regulated and used.
A New Era of Accountability or Inequality?
As AI reshapes the global economy, it brings both opportunities and challenges. The professions of law and accounting, which have long been used to protect the wealth of the elite, may see dramatic changes as automation and AI-driven platforms take over many of their functions. However, AI also holds the promise of enhancing transparency, accountability, and fairness in global wealth distribution.
The key question is whether governments, regulatory bodies, and international institutions will seize this opportunity to create a fairer global economy or whether AI will be yet another tool in the hands of the powerful few to maintain and expand their dominance.
References
- Piketty, Thomas. Capital in the Twenty-First Century. Harvard University Press, 2014.
- Autor, David. “The China Shock: Learning from Labor-Market Adjustment to Large Changes in Trade.” Annual Review of Economics, vol. 8, 2016.
- Zucman, Gabriel. The Hidden Wealth of Nations: The Scourge of Tax Havens. University of Chicago Press, 2015.
- World Bank. “The Impact of COVID-19 on Global Inequality.” World Bank Report, 2022.
- UNCTAD. Digital Economy Report 2021: Cross-border Data Flows and Development. United Nations, 2021.
- Pandora Papers, International Consortium of Investigative Journalists (ICIJ), 2021.
Frey, Carl Benedikt, and Michael A. Osborne. “The Future of Employment: How Susceptible Are Jobs to Computerisation?” Technological Forecasting and Social Change, vol. 114, 2017.