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Artificial intelligence is changing the world in unprecedented ways and redefining almost all fields of human endeavor. Economics, which has so far been resistant to the adoption of AI, is poised to undergo dramatic upheavals — arguably the greatest changes since Adam Smith’s inception of the science — and thereby help humanity better solve its problems.
Understanding how AI and machine learning are changing the world is essential to setting the right priorities and addressing existing issues that do not allow economics to be considered a true science.
The main problem with economics and politics is that they are often criticized as not having the same level of validity and predictive power as genuine “sciences”, such as physics or mathematics. There seems to exist an apparent distinction between natural sciences and social disciplines that makes conventional scientific method inapplicable in social disciplines.
Economists stick to their theoretical models the majority of which are of little to no value in the real world because they just can’t take account of the impact human perception on the state of affairs and subsequent uncertainty.
The implementation of AI and information technologies in general in economics, nevertheless, might change this situation for better. By modeling human behavior we can potentially estimate its impact on the real world. This will make it easier to identify financial bubbles and potential vulnerabilities in the economy, as well as to make better predictions.
Very often economic debates are turning into political, and economists, instead of dedicating themselves to the pursuit of truth, become advocates of their party’s platform, distorting or deliberately misinterpreting and ignoring available evidence.
In order to avoid the politicization of economics, we will likely utilize AI to analyze all of the information about the economy and give impartial and objective evidence-based and data-driven suggestions. AI will put an end to endless politically charged economic debates and will provide us with balanced suggestions on how to tackle economic challenges.
The advent of artificial intelligence is a single most important event in the history of economics. And our aim should be to effectively harness the power of AI to enhance the economic conditions in which we all can flourish.
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Analysis – “I like how this article did not focus on just AI’s implications on economics, but instead offered the idea that policy making and economics can not be separated in discussion. I remember in 2020, when the NFT was birthed many people talked about web3 being an event equivalent to the birth of the internet. If that were true, what is AI to us now? It really is the single most important thing to ever happen to us, and it is happening to us right now while we are alive!
What an amazing time to be alive.
Though I am pessimistic about the near future of AI and its impact on policy-making and economics, I am optimistic that we will not perish from it and that we will eventually self-correct, I can only hope to be alive for that too.” – Easton Nguyen
