New World, Old Rules

If you think (1) AI is going to be earth-shatteringly disruptive (which I usually do) and (2) that the disruption could be more positive than negative (I do, sometimes), then the most important question isn’t about the technology or culture or guardrails or regulation.

It’s about whether our institutions can keep up.

Most of the structures that organize our work lives—jobs, benefits, education, licensing, even the notion of what a “career” looks like—were built for a world of stable work done by employees.

If that world starts to break apart, even partially, the assumptions those institutions are built on top of start to fall apart, and need to be reexamined and updated. That’s where things get uncomfortable, because adapting institutions is primarily a political exercise, and right now, our politics are not particularly well-equipped for that kind of adaptation.

If you’re even a sometimes AI optimist who believes AI could unlock a more abundant and better future, there’s a second belief that must accompany that optimism, which is that we need to get much better at changing the rules of the game.

My IndyStar column from yesterday examines one such arrangement. 👇🏾

I’ve been drifting a little too far toward AI doomerism lately, so let me say something good about AI, and not (just) as a way of sucking up to our future AI overlords who are reading this column.

If the trajectory of AI holds, one possible version of the future is an absolute explosion of entrepreneurship. There may not be a better time in history to turn an idea into a business than right now, and that capacity is only going to grow as AI agents get smarter and more capable.

It’s not hard to imagine a society of entrepreneurs: one- and two-person shops with an army of AI agents doing a lot of the scut work. That actually could be a pretty great place to live, maybe the closest possible modern version of the Jeffersonian vision of a republic run by independent farmers and artisans

People would be able to merge their passions and their livelihoods in ways that we barely dare to dream about right now. There would still be corporations and large companies, but if people were actually free to use these tools to pursue what they wanted to build, make and offer to the world, that would be a very good thing.

This all should be music to the ears of Hoosier politicians and leaders.

We are a state that celebrates the idea of entrepreneurship. We have an entire state office devoted to it. Rally—the annual entrepreneurship conference—is packed every year. The IBJ loves to run breathless profiles of founders and startup success stories. Our leaders love to brag about Indiana’s “friendly business climate,” which usually means low taxes and relatively minimal regulations.

The constant refrain is that Indiana is a great place to start a business. Now imagine the opportunity: if Indiana is a great place to start a business, and AI makes this a great time to start a business, then an AI-powered entrepreneurial economy could be a genuine competitive advantage for a state like ours. It could be a game changer.

There’s just one problem, but it’s a big one.

Healthcare.

People sometimes call the United States government an insurance company with an army. It’s somewhat tongue-in-cheek, but also mostly accurate. A huge share of what the government does is tied up in paying for healthcare and health insurance.

If the United States government is an insurance company with an army, then for many Americans a job is healthcare with a paycheck attached. It’s a big reason people stay in jobs they don’t love and pass on risks they might otherwise take.

I’m sure I’m not the only person who, when weighing job offers or professional opportunities, feels the gravitational pull of employer-provided healthcare benefits. Unless you’re lucky enough to have generational wealth, or a partner with stable benefits, that question looms over an enormous number of decisions.

Nothing holds people back from taking professional risks quite like the fear of losing healthcare, and therein lies the opportunity.

There’s a lot of energy right now around reforming healthcare in our state. People from all sectors and across the political spectrum recognize that our costs are too high and our outcomes are too mediocre. That recognition has created real momentum for change.

Most of that conversation has been about pointing fingers and trying to identify villains. Recently, much of the focus has been directed at perceived overcharging by hospitals and healthcare systems. On the Medicaid side, the rhetoric centers on rooting out fraud and abuse. When structural reforms are discussed, they usually revolve around removing regulations and introducing more competition into the system.

In other words, a lot of the healthcare conversations happening right now in Indiana have focused on shifting burdens within the existing framework. Who should pay more? Who should charge less? Which part of the system is responsible for which costs?

Those are important questions, but they all assume a system that, for most people, is still fundamentally employer-driven.

But, if we’re going to take a cue from the qualities we claim to admire in our entrepreneurs, maybe the bolder question is: can we find a way to divorce healthcare from employers altogether?

That’s obviously not something Indiana can solve on its own, given the national complexity of our healthcare system. Still, it is exactly the kind of idea a state that prides itself on entrepreneurship should be leading on.

Because if AI really does lower the barriers to starting businesses and pursuing independent work, the healthcare/employer handcuff may be one of the main remaining constraints.

There’s a lot of conversation right now about how AI might upend our economy and our society, and most of that conversation tends to skew negative. There are other versions of the future too, where millions more people have the tools to build things, start businesses, and pursue ideas that currently feel out of reach.

Unlocking that future, however, will take bold changes to the structures we’ve built around work, starting with healthcare. Otherwise we may find ourselves with the technology for a society of independent creators, but institutions still built for a world of employees.