Welcome to the week from Prof G Media, where we break down what mattered and what it all means. I'm George Hahn, and it's Friday, September 11th. Today, AI is getting smarter. Are we? Then, Trump wants Canada to fold. Instead, he may be strengthening its hand. And finally, what a divorce attorney says actually keeps a marriage together. Let's get into it.
First, AI. Ed and Scott spoke with economist Tyler Cowen, an adviser to AI labs, who has been called the man who wants to know everything. The skeptics say AI is overhyped and unprofitable. Cowen isn't buying it. He thinks the technology already works. And when Scott asked where it's changing real work, Cowen pointed first to programming.
And I don't think humans will disappear from programming, but they've already taken on a fundamentally different role. They're more like impresarios, and they're consulted in the meantime like, oh, is this going in the proper loop? Is the work actually being done? Is this the thing I asked it to do? Over time, more and more of that will be AIs themselves monitoring. But that's the clearest example of a very positive change. The biggest negative I just think will be cybersecurity. There'll be a lot more hacks. There's plenty of evidence for this already. Those cost the world a lot. We'll spend more on cybersecurity. It won't be fixed quickly, and I think it's a very real concern. We need a national, international effort to really firm up all of our major institutions as quickly as possible.
The upside may be real, but this week brought another warning about what happens when we let AI do too much of our thinking. The OECD released its latest global assessment of 15-year-olds across 91 education systems. Reading and math scores have fallen to record lows across OECD countries. AI didn't create that decade-long decline, but emerging research shows it could make the underlying problem worse. Students can appear to perform better with AI, then struggle when the tool disappears. Ed asked the Financial Times' John Burn-Murdoch what the evidence tells us.
We're seeing this in all sorts of settings. We've seen this come out from US universities as well. So I think at this point there's a really solid case that relying on AI as part of the learning process is extremely risky in terms of it essentially being used as a crutch that when taken away people just collapse at the end. I think it's also just incredibly hard to enforce use of AI in the education setting where that doesn't happen. You can talk about having lockdown versions of ChatGPT, that kind of thing that encourage study hours, but ultimately if someone wants to cheat, they're going to find a way to cheat. We've seen this with all sorts of different forms of educational technology over the years as well. It's a really, really fine tightrope to try and tread, and we don't seem to be able to do that. I think as well we have this problem where a lot of the people in Silicon Valley who create these tools, they are people who have always worked really hard at school. They're always hyper-focused. They don't struggle with distraction. For them, it maybe seems obvious that, well, you know, kids who are given these tools are going to use them to learn even more. But I think that is just born out of a real disconnect from what real classrooms are like in modern the UK, modern America, where just the ability to focus is a huge challenge for a lot of people.
So much for the smartest people in the room. The danger isn't that AI makes us less intelligent. It's that it allows us to avoid the work through which intelligence develops. And from one self-inflicted problem to another this week, the trade war with Canada came roaring back on Raging Moderates. Scott compared it to a famously hostile divorce.
This is kind of like, remember that, did you ever see the movie The War of the Roses with Michael Douglas and Kathleen Turner? Forever ago. But yeah. Yeah. Forever ago. Yeah. But basically a very hostile divorce where they decide to stay in the same house. That's what this is. There are cars and auto parts that cross the border, Canadian-American border, eight times before final assembly. You can't undo this marriage overnight. It's taken 30 years of NAFTA and all sorts of agreements. This is like a divorce where you live in the same town, go to the same church, and shop at the same Walmart and live in the same house. There's just nothing, nothing they can do. And in like all tariffs, the person who initiated it likely ends up on the losing end of this. There are alcohol exports are down 80% from the US because Canadian consumers have something American consumers don't have, and that is resolve. And that is American consumers are like, whatever, Trump, what's he doing? Canada, I don't care. I'm going to go back to watching, you know, Beef or whatever my favorite streaming program is. Whereas Canadians are rallied behind this. They are really upset and angry, and they are, they are buying specific products that damage specific states. And kind of the tell here is $25 billion is landing inside of US states, Michigan and Texas. And I mean, they're, they're going after the heart and lungs of some of these red states. This is kind of like stop threatening to stop talking to your business partner of 30 years because he won't let you renegotiate the deal every six months. This again is another, another attack on the structural. What has been probably the greatest unlock in prosperity in America has been international commerce and international trade because we have a tendency to produce higher margin, higher value-added products that result in greater market capitalization. So every dollar in international trade accretes a disproportionate amount of shareholder and stakeholder value to the US, including our trade with Canada.
You just can't hate this guy enough. 25 billion in the main scheme of the 700 billion in trade that we did with them last year is small. It does, I mean, it's meaningful. It hits certain states and manufacturers really hard, which is intentional. I'm overwhelmed by the contrast between the precision with which Canada is doing this and the slop factory that seems to be our trade apparatus at this point.
The United States and Canada have spent decades building an economy neither country can easily disentangle. But if the Trump administration expected pressure to divide Canadians, it appears to be doing the opposite. On Wednesday's Prof G Markets, Ed spoke with Canadian economist Mike Moffatt about how this is playing out north of the border.
I think Canadians are trying to take the position that we just shouldn't take the bait, right? That this is an attempt to goad us. So it's one of those things where we start to get angry and then we go, okay, deep breaths. Let's just calm down. We don't, you know, this is what Trump is trying to get from Canadians. So let's, let's calm a little bit. But we're certainly not happy about it. And there is, you know, ironically, when those things happen, there is kind of a rally around the flag, and Carney himself gets more popular. So if the administration is trying to force Canada to sign the deal, this is probably the worst possible thing to do because it just makes Carney more popular in the eyes of Canadians and gives Carney more ability to back away from a bad deal.
What are some of the other consequences that you think will come out of this? I mean, is it possible that, for example, the relationship could never really be repaired? I mean, what are the other long-term consequences?
