This week marks the 250th anniversary of Adam Smith’s ‘An Inquiry Into the Nature and Causes of the Wealth of Nations’. At the Adam Smith Institute (ASI), we have naturally been busy celebrating the masterwork’s semiquincentennial. Talks have been held, even graphic novels scribbled. Most importantly, pieces have appeared this week in CapX, written by colleagues smarter, funnier and sometimes even better looking than me.
For my own part, I have been thinking about how Smith might illuminate the biggest question in the global economy: the impact of artificial intelligence.
Predictions that automation will destroy jobs are not new. They predate the birth of Christ, let alone the birth of the industrial revolution. In his ‘Politics’, Aristotle imagined a world in which ‘the shuttle would weave and the plectrum touch the lyre without a hand to guide them’, such that ‘master-craftsmen would have no need of servants nor masters of slaves’. In the late 1500s, Elizabeth I is said to have refused to support the inventor of the stocking frame, William Lee, for fear the invention would cost her subjects their livelihoods. And people always say that this time is different. It has not yet been true.
The ASI’s Viggo Terling has already written persuasively in these pages that the advent of AI is not a reason for states to dabble in nonsense schemes like universal basic income. He cites Smith’s demonstration of the power of the division of labour, immortalised in the pin factory, as a way to understand how technology specialises and enhances human work rather than replacing it.
Smith’s logic suggests that AI, far from being a destroyer, is a spectacular new expansion of the market for cognitive labour. Children could each receive individual tutors of world-leading quality. Scientists could push the frontiers of discovery farther and faster. The bottleneck of human cognitive capacity, which limits everything from drug development to space exploration, could be smashed wide open.
And what is the alternative? That the West handicaps itself against a counterfactual, whilst the Chinese Communist Party romps ahead? No serious government will accept that. The spread of AI is now an inevitability, whether states like it or not.
But if Smith tells us not to fear the machine, he also warns us what to fear instead. The greater danger is what Brendan McCord, again in these pages, has called the ‘digital man of system’. Smith coined the original phrase for the planner who imagines he can arrange the members of society as easily as pieces on a chessboard. McCord’s insight is that artificial intelligence threatens to embed that logic everywhere: not a single planner, but the pull of optimisation itself, baked into countless systems that promise better outcomes and greater efficiency. Like a digital version of Max Weber’s iron cage, the ratchet effect of AI threatens to turn the messy, contextual work of moral judgement into clean data points to be optimised across populations.
Today, this digital man of system sits in Whitehall and Brussels writing endless ‘strategies’ with, by and about AI. But in Beijing, he is deploying facial recognition on every street corner. He believes that the technology is too important to be left to the market. Smith believed the opposite – that the market was too important to be left to him.
But Smith knew, not least from his debt to the classical thought of Aristotle and Cicero, to his conversations with friends like David Hume, to his own observations, that ordering a society required sympathy, virtue and tolerance. These are all features that can and must be built into AI as we use it to help us fan out across the stars, defeating disease and ignorance as we go. We know we can do this, because these ideas are present in each of us and present in our markets and societies. But he also knew that living a virtuous life had to be learned through human interactions and emotions.
The question we should be asking then is not whether the machines will make us richer or more secure; they will. The question is whether we retain the ability to use them not just to be loved, but to be lovely too.
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