The Invisible Hand and Artificial Intelligence
Concerned about the impact of A.I. on humanity? The invisible hand may be how we make it safe and better for humanity. Here's why.
The invisible hand is a metaphor conjured up by the Scottish economist and philosopher Adam Smith in the 18th century. Lest you think economics and philosophy are two entirely different things, they weren’t at that time. Economics was considered part of philosophy. But what does the invisible hand have to do with Artificial Intelligence?
A lot more than one might think. In fact, it may well be the invisible hand that decides, alongside culture, just how successful AI becomes in our near future. While it may appear that the role of AI within our society will be determined by Tech Giants like Amazon, Google, Microsoft and potential giants like OpenAI and Anthropic, you can take some small comfort that it will not be decided by them.
In a world driven by mining our personal data for profit, where business seeks to quantify everything and senior management still hangs onto the long past best before date of Taylorism, the inevitable hand has always been the counterforce.
But first, what is the invisible hand? It is the actions of people in the choices we make about what products and services we choose to buy. The invisible hand has shaped entire economies for thousands of years, as well as politics. Both elements of culture.
Just this past week, that entertainment juggernaut Disney, acknowledged the impact of the invisible hand on its business. Profits are down. Consumers have spoken. Bud Light found itself up against the invisible hand as well.
The other force that comes into play is the tragedy of the commons, which is where humans make personal decisions to their own immediate advantage and to heck with anyone else. Ultimately this destroys the resource for everyone. This is what has played out in social media with trolls and other nefarious types ruining it for everyone else.
The Invisible Hand, The Tragedy of the Commons and Artificial Intelligence
Artificial Intelligence (AI) is made up of a number of technologies such as Large Language Models (LLMs) like ChatGPT, as well as Machine Learning, Neural Networks and several others. It’s important to understand this because there is no singular AI and each will face the tragedy of the commons and the invisible hand in different ways.
We should also understand the difference between consumer and citizen. Anthropologist David Graeber saw them as the consumer public and the public; consumer and citizen respectively. Citizens, or the public, is the political concept of how we act to determine the way our societies will operate. The consumer or “consumer public” is the economic or market concept, where we buy and sell things. Trading.
As citizens, we determine political ideas such as democracy, autocracy, socialism and communism. As consumers, we vote with our wallets.
AI is impacting both of these parts of our current world and may well influence both over the coming decades. Tech Giants will spend hundreds of millions of dollars to sway the invisible hand of both consumers and citizens because of this. It is unlikely to work.
While capitalism isn’t perfect and no economic system is, it’s certainly done more to lift up society than not. It has however, taken a bit of a turn to a darker side in recent decades. This is in the form of no longer providing value to the consumer, but rather providing value to the shareholder. This happened before in the age of the Robber Barons. A period some economists suggest we are in yet again.
If capitalism can swing back to the original idea of delivering social good, then AI may have a better opportunity in aligning with the invisible hand. If capitalism continues at is, it is more than likely it will get a resounding slap in the face from the invisible hand.
The invisible hand is already winding up for a slap and has, to some industries, already given it some warning parries. Never in history has any political or economic model been able to avoid the invisible hand. It is part of the reason we see increasing collective bargaining and growing support for unions.
In our distant past, when societies grew tired of their leaders, they often just packed up their bags and moved away. That’s not as easy to do today, so instead we walk away through voting and using our wallets.
To date, AI hasn’t really changed broader society in any meaningful ways. While LLMs may eventually have the most impact in terms of work and creativity, how far that change goes will ultimately be decided by culture and the invisible hand. Not corporations or governments. Unless it’s an autocracy like China, Iran and Russia. Eventually though, autocracies come to a rather brutal end. They beget violence and thus end in violence.
AI is giving citizens existential angst to a degree not even social media has. For now, the majority of the population has little understanding of what AI is and most see it as a singular technology. But it can be hypothesized that most citizens do understand they’re being manipulated by advertising and the abuse of personal data. This plays into how they’re beginning to feel about AI as well.
We’ve also seen the tragedy of the commons at play with AI. Such as deep fake videos and images and child abuse. Stealing of celebrities voices and images in ways that erode broader societal trust in the technology.
As I recently wrote, the AI industry is at risk of similar distrust as the rise of crypto. Both of these technologies can have immense value to our societies and AI could be crucial to our very survival. But the AI industry is blissfully unaware it seems, of the impacts of the invisible hand and the tragedy of the commons.
Should citizens and consumers become disillusioned with AI as they have with crypto, the invisible hand will make its move.
Ultimately the invisible hand may be what the AI industry needs. While leaders in the AI industry may fret over the regulatory hand of the government, they should be more concerned with the invisible hand, which may and already is starting to turn its hand against them.
In democracies, it is ultimately the citizens that decide their future. When governments fail the populace is when uprisings start and eventually, revolutions. And revolutions do not necessarily mean violence.
So if you are worried about AI and what it might mean, it is the invisible hand that will, along with culture, get it all sorted out. Will it be perfect? Absolutely not. But it will be better. And AI technologies may be better for it too.