Why the arguments for AI-socialist planning fail.

Comment “AI Socialism” and we’ll send you a video on the topic. In a recent Financial Times column, European economics commentator Martin Sandbu suggests that powerful AI could overcome the information problem that defeated twentieth-century central planning. But Jesús Fernández-Villaverde, an economist who teaches at the University of Pennsylvania, explains why the problem runs deeper. Austrian economist Friedrich Hayek’s challenge was never only about computing power. Economic knowledge is scattered, changes when rules change, and is often discovered through real choices, prices, profits, losses, and experimentation. AI can process astonishing amounts of information. It cannot replace the market process that helps create and reveal the information planners would need in the first place.