And no, I’m not thinking of progressive Democrats.
A significant feature that makes capitalism unique is how price serves as the most immediate and effective way to adjust supply to meet demand. It is an immediate and is based on individual transactions. It needs nothing other than a buyer and a seller, both of whom have ideas of value of the good or service that is the object of the potential transaction – when a point is reached where a buyer wants to buy, and a seller wants to sell, a transaction occurs. It works with any currency or barter system.
With the increasing capability of artificial intelligence (AI) replace price and usher in an era where the central planning necessary for a socialist or communist economy is possible?
I would normally say “no” but when you consider that something like 90% of all trades on the NYSE are now executed by high frequency trading computer algorithms, it at least seems theoretically possible. I know that is a relatively small sample as compared to the almost incalculable number of seen and unseen transactions in a national and global economy but just 30 years ago, the numbers were almost 90 to 10 in favor of human transactions. We have come a long way in three decades.
AI can be used in a couple of ways – to amalgamate people into collective groups to predict their behavior or to understand individual decisions well enough to deliver customized products and services to the individual.
I guess the real answer is that it depends on how it is used.
My fear is that AI will be used by government for the former when the best use is for the latter, that it will be used to reduce the choices we have rather than increase them.
The central planning of the “ism” crowd is a lot like Henry Ford’s famous quote, “You can have any color as long as it is black” – which means in the future, all phased plasma rifles will be in the 40-watt range (gratuitous Terminator reference) – the individual loses the power of choice because “the plan” is more important than the individual.
But artificial intelligence has the power to increase choice rather than decrease it. It has the power to make the production of goods and services less costly and in the reach of even more people – if we have the sense to use it that way. The true danger with AI is that it becomes an artificial majority – that “big data” and AI is used to replace the will of the people…and if you think it won’t be tried, just remember how the progressive left worships “science”, loves government and believes people should be ruled by an elitist intelligentsia. AI would fit that description for them.
In his “Democracy in America”, Alexis de Tocqueville’s made this prediction:
“If ever the free institutions of America are destroyed, that event may be attributed to the omnipotence of the majority, which may at some future time urge the minorities to desperation and oblige them to have recourse to physical force. Anarchy will then be the result, but it will have been brought about by despotism.”
Social media already uses AI algorithms that decide what “news” you are allowed to see, which posts are “appropriate” and targets ads at you. Think of a life where Facebook is real life and you won’t be far wrong.
Orwell’s 1984 Big Brother comes to mind. It isn’t that we can’t evolve to use AI to our benefit, we just need to keep in mind that every tool has two potential uses, one good and the other, evil.