Pete Boettke's interview about AI, markets, and the future of Socialism seems to veer off course in fully addressing the core issue. Boettke's analogy between robots and Messi doesn't capture the essence of the argument about AI's limitations in economic decision-making.

Picture a soccer field where future robots are taking on Messi. Quite a spectacle, right? But in this match, AI might just give Messi a run for his money, possibly even stealing his thunder. Sensory perception, motor skills, decision-making? All within the grasp of future tech. Messi doesn't have some mystical internal knowledge that a computer couldn't access; everything's out there on the field for both human and machine to observe and respond to.

Now, bring that AI into the bustling market of wants and needs, and suddenly it's like a fish out of water. It's not that AI lacks smarts or finesse; it's about consumer preferences. AI might outplay Messi, but it won't decode what you want for dinner next Tuesday, no matter how many updates or algorithms you throw at it.

Boettke dances around this, but he never quite lands the punch. And that's a shame because it's the real argument against AI being able to replace market prices. This isn't about current technological limitations or clunky algorithms; it's about something inherent in the way markets function.

The debate isn't about the creativity of consumer preference or the nuances of human genius. It's rather simple, really: what you want stays locked in your noggin unless you decide to spill the beans. Prices coax that out of you. Absent mind-reading equipment, AI can't peer into your soul and guess your favorite ice cream flavor. It's a game of revelations, and the market prices are the only known referees, something both humans and their mechanical counterparts must heed.

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Interesting read, even though I lean towards a different conclusion. I must say, I am disappointed by the references to Road to Serfdom. It is a simplistic book that did not really seek to critique the Soviet Union system (which Hayek considered already lost to the evils of planning), but the then-nascent mixed economies of the Western world. The argument was that any level of intervention in the economy, whether in the form of much-needed WWII price controls or very-successful socialized healthcare, would lead to Soviet-style totalitarianism. This was an outlandish prediction. The mixed economies of postwar Europe 1945-1970 show one of the highest levels of welfare improvements, profit and wage growth ever recorded in history. They also kept and progressively expanded their democratic credentials. Polanyi, in his Great Transformation, offers a much more nuanced analysis of the period that does not err on abusing a fully planned-fully free economic binary.

That said, it is true that Hayek and his acolytes offered sound arguments against central planning as traditionally understood: a huge calculating machine that could plausibly replace markets and the price system to allocate goods and services in a modern economy. I would agree that no plausible AI advancement would be able to handle this, let alone do so without threatening certain rights and freedoms.

However, this is not the only way AI could contribute to "planning", understood in a wider sense. I am quite puzzled at the criticisms of industrial policy, given it has been only through state strategic policies that information technologies have come about, on the Atlantic and the Pacific. From the Pentagon in the US to the MITI in Japan, government has played a fundamental role in steering investment and innovation that we have later seen transplanted to consumer markets and the private sector. And, given challenges like climate change, resource scarcity, poverty and others, we could argue that some of our institutional solutions do show that "planning" (to a certain degree) could work. From healthcare to infrastructures, we see the visible hand contributing to a gradual transformation.

We could spend hours discussing this, and I am far from being an expert in the matter. But for a more interesting discussion on feasible socialist planning and the contribution from computing, you could perhaps bring Evgeny Morozov on your podcast. Here are some of his contributions: https://newleftreview.org/issues/ii116/articles/evgeny-morozov-digital-socialism & https://the-santiago-boys.com/

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I am not so sold on the iron connection between socialism and centrally planned economies. Isn't socialism generally just that the means of production, distribution, and exchange are owned or regulated by the community? This doesn't necessitate central planning.

I also can imagine with cheap AI, robotics and energy that efficiency will no longer be terribly important. We all buy smartphones these days that are quite overpowered for 99% of what we do with them. We are happy to just live with a lot of slack. I imagine this to be the case in the future. If the prices come down enough a lot of our tried and true relations just kind of break down.

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What is not new also has a lot of difficulty in making socialism work, and this is not due to the poor depth of thinking and planning, but more basically because socialism is not the right way to go from a natural perspective. You cannot really force mankind to follow a path that is unnatural because for all our cleverness we are still creatures that have basic natural tendencies that as a species we developed over millions of years. So what we really need to better understand and to develop ourselves in a practical way, is the better knowledge of our social system laid bare.

To further this desirable proposal I have written a book that explains our business social system (of macroeconomics), as it truly exists from an operational aspect and not (as have been done in the past) from a more detailed but confused different-kinds-of-jobs and goods-prices one. Using cold logic without the various political, commercial and religious-doctrine aspects that so often influenced older explanations, , I have logically and scientifically explained of what our business society really consists and how it actually works without any of this past bias.

To be easier to follow and simpler to understand I have deliberately introduced the least possible number of different kinds of sectors of our economy that explain it, but have taken sufficient of them to properly and comprehensively cover the whole of this Big Picture. You can see them in my short (8-page) working paper SSRN 2865571 "Einstein's Criterion Applied to Logical Macroeconomics Modelling" (on the internet) and in my 310-page e-book "Consequential Macroeconomics" on this subject. Write to me for free e-copies and blow clear you past thinking from all those poor way for trying to understand that they teach at universities and other inflexible ways of thinking.

Incidentally, when AI catches up with this logical methodology, it too will be able to help us advance in a more civilized way than how we live today.

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