LAL #015 — Has A.I. Replaced Adam Smith's "Invisible Hand"? If So, At What Cost?

Law and Legitimacy

Adam Smith published "Wealth of Nations" in 1776—the same year that Thomas Jefferson composed the Declaration of Independence.

The two events are unrelated, of course, and, of the two works, I suggest that Smith’s has been the more influential.

Smith asserted that an unregulated economy in which each individual were free to pursue their own sense of what was good for them, their utility function, would yield the maximally efficient distribution of goods and services. Smith argued that rather than government regulating the economy, the economy be set free to evolve in response to the sum of individual choices, the so-called “Invisible Hand” would direct the economy.

It was and still is a powerful idea; one at the heart of much of modern economic theory. Where consumers are each said to have their own utility function, we each seek to maximize our satisfaction in the next transaction we make. In a world without Big Data and computers, there simply wasn’t anything as effective as the "Invisible Hand" at maximizing utility.

Does Big Data and Artificial Intelligence ("A.I.") change all of that? And, if so, what happens if somewhere in the Cloud, Big Data, A.I. and Machine Learning, and self-taught algorithms conclude that the maximum utility could be reached without full employment? Might that not explain the rage against the system by such groups as Antifa?

I don’t know the answer. I'm not sure if anyone does.

But the question is one well worth considering. It’s a far more pressing concern than the remote possibility that A.I. will replicate, and perhaps replace, human intelligence. Find me a computer that aches to know why there is a world rather than not and then I will believe there is a truly thinking, and human, thing.

If you are new to the A.I. field and want a concise introduction to the role, promise and peril of A.I., consider reading Steven Shwartz’s brief new book, "Evil Robots, Killer Computers, and Other Myths: The Truth About AI and the Future of Humanity", published just this year by Fast Company Press in New York.

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