Artificial intelligence and economic planning

August 2, 2022   Robert Gmeiner


  • Property, Markets & Trade
  • Academic Articles
  • Blog

The economic calculation of a central planner has traditionally been argued to result in irrational and inefficient allocation of resources, but this can be reasonably questioned given advances in computing technology, especially artificial intelligence (AI). We conclude that central planning coupled with AI is still unable to allocate resources with the same efficiency as price signals and market forces through examinations of the technical structure of current AI approaches. AI-driven central planning is not viable in part due to incentives, computing power, knowledge/data acquisition, and speed of collection. There are deep incentive problems for planners, programmers, and ordinary participants to complicate efforts at planning and bias data. Most importantly, AI cannot easily or quickly duplicate the signals of relative scarcity that are generated in markets. Some challenges we highlight are pertinent to planning generally, but many others arise from the introduction of an AI-planner.