The internal morality of markets and artificial intelligence

Friedrich Hayek made an important point when he said that markets permit us to promptly use the knowledge of the circumstances of time and place. Decentralization is often efficient, as opposed to a central planner. But we now face the possibility of an even more efficient economic system based on artificial intelligence. The extraordinary potential of AIs is their ability to produce cheap prediction. This ability may lead to a new form of social ordering, which we call the “coeusian order”. The argument of this paper is that AI brings in an alternative way to organize the economic realm at the cost of some of the features of our current system. It is, therefore, important to take note of the choice of forms of economic organization we have. Any efficiency gains an AI order can bring must be balanced with its encroachment on the privacy and autonomy of the people as well as its likely promotion of price differentiation without self-selection. The important point is that we have a choice of how knowledge is to be used. We can choose a less efficient system, and we often do because we care about more than just efficiency.