The AI Market Debate Is Old

Oskar Lange’s utopian—or dystopian—idea 80 years ago was to have a computer power the economy.

Letter to The WSJ. 

"Regarding Marian L. Tupy and Peter Boettke’s op-ed “Algorithms Can’t Replace Free Markets” (July 22): Economists have already debated whether AI could replace the market some 80 years ago when they argued over the Lange model.

Polish-American economist Oskar Lange’s utopian—or dystopian—idea was to have a big, futuristic computer replace market dynamics so that an economy could be centrally planned.

The idea of using AI to run the economy instead of an organic web of individual choices is inextricably connected to a socialist model of central planning and control. As Hungarian economist János Kornai contended, such centrally-planned systems inevitably result in a “shortage economy.” And we’ve seen that, time and again.

Vladimir Zwass

Editor in Chief, Journal of Management Information Systems" 

Related post:

AI Can’t Replace Free Markets: Algorithms process data from the past while economic decisions are dynamic and forward-looking