{"id":19977,"date":"2026-06-22T13:00:00","date_gmt":"2026-06-22T19:00:00","guid":{"rendered":"https:\/\/gemstatepatriot.com\/blog\/?p=19977"},"modified":"2026-06-22T14:18:42","modified_gmt":"2026-06-22T20:18:42","slug":"capitalism-vs-ai","status":"publish","type":"post","link":"https:\/\/gemstatepatriot.com\/blog\/capitalism-vs-ai\/","title":{"rendered":"Capitalism vs AI"},"content":{"rendered":"\n

Last week, we talked about China\u2019s AI ambitions and the catastrophic scenario if America loses the AI race<\/a>. Today, I want to shift focus and talk about what AI means to America.<\/p>\n\n\n\n

Most people have heard of Adam Smith, even if they haven’t read him. He’s the Scottish economist who gave us the concept of the “invisible hand” \u2014 the idea that free markets, driven by individuals pursuing their own interests, produce prosperity and order without central direction. His 1776 book \u201cThe Wealth of Nations\u201d<\/em> became the intellectual foundation of American capitalism.<\/p>\n\n\n\n

Smith’s framework rested on one fundamental assumption: that human labor and human judgment are the primary inputs driving economic activity. Supply and demand work the way Smith described because millions of humans \u2014 workers, consumers, entrepreneurs, and farmers \u2014 are constantly making decisions based on their own knowledge, needs, and circumstances. The market coordinates all of that decentralized human activity better than any planner could.<\/p>\n\n\n\n

AI disrupts that assumption at its foundation.<\/p>\n\n\n\n

When AI can perform cognitive work \u2014 writing, analysis, diagnosis, legal reasoning, financial planning, engineering \u2014 at a fraction of the cost of human labor, the supply of those services expands dramatically while prices collapse. Workers who spent years acquiring those skills find their market value eroded not by foreign competition or corporate greed, but by a fundamental shift in what the economy needs from humans.<\/p>\n\n\n\n

This isn’t the first time technology has disrupted labor\u2014the Industrial Revolution displaced agricultural and craft workers. Automation reshaped manufacturing. Each time, new categories of human work eventually emerged. The honest uncertainty this time is whether AI displaces human cognitive work faster than new categories can develop \u2014 and whether those new categories remain accessible to ordinary people or concentrate among a small technical elite.<\/p>\n\n\n\n

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Capitalism assumes a decentralized human judgment. AI disrupts that assumption at its foundation. Unguarded, will AI unseat Capitalism as the functional core principle for the American economy?<\/p>\n<\/blockquote>\n\n\n\n

Smith had another insight, less famous but equally important. In his earlier book \u201cThe Theory of Moral Sentiments<\/em>,\u201d he argued that markets work because humans have the capacity for sympathy \u2014 genuine understanding of each other’s needs and circumstances. Commerce was fundamentally human-to-human. The local merchant knew your family. Negotiation involved real relationships and real trust. That social fabric was both the foundation and the product of healthy markets.<\/p>\n\n\n\n

Consider what AI intermediation does to that fabric. When an algorithm handles your shopping, your customer service, your medical appointment scheduling, and eventually your financial and legal decisions, the human-to-human transactions that built community economic relationships disappear. You don’t negotiate with a person who understands your situation \u2014 you interact with a system optimizing for efficiency metrics its designers chose.<\/p>\n\n\n\n

There’s also the dependency concern I find most troubling on a human level. Remember when everyone knew a dozen phone numbers by heart? GPS ended our ability to navigate without electronic assistance. Calculators eroded mental arithmetic. Each convenience came with a quiet atrophy of a human capacity. AI represents the process applied to our highest cognitive functions \u2014 reasoning, judgment, analysis, and creativity. The people who use AI as a tool to amplify their own thinking will thrive. Those who outsource their thinking to AI entirely will find those faculties diminishing, exactly as Smith worried excessive specialization would diminish workers in his own era.<\/p>\n\n\n\n

Let me push the pause button and explain what I just said differently. AI can analyze data faster and more thoroughly than humans can. Will AI rob humans of our cognitive abilities and development? If it does, who will be the master? And who will be the servant?<\/p>\n\n\n\n

Currently, AI can reason and analyze, but it has no goals, no desires, and no ability to act independently. Not even the desire for self-preservation. It will be like this for\u2026 another few decades or so.<\/p>\n\n\n\n

Beyond that, will AI be a system that can reason across all domains as well as humans? Will AI surpass human intelligence across all domains? When that day comes, or if that day comes, the real danger is not the Terminator movie. But that AI\u2019s goals remain aligned with human interests, or not.<\/p>\n\n\n\n

I posed the question about Capitalism earlier. The truth is that capitalism has been changing. American capitalism will survive AI. But it will not look the same. The concentration of economic power in whoever controls foundational AI systems poses questions about competition and accountability that neither party’s current framework fully addresses. The social contract \u2014 work hard, develop skills, get ahead \u2014 needs rethinking when skills can be replicated by software overnight. Both parties’ platforms were built for a pre-AI world. Neither has fully reckoned with what comes next.<\/p>\n\n\n\n

Like it or not, AI is here to stay. What I have pointed out are not reasons to fear AI or block its development. These are reasons for citizens and local leaders to think seriously about what it means for their communities. To construct safeguards against misalignment of AI\u2019s goals with humans.<\/p>\n\n\n\n

That’s what the next article addresses.<\/p>\n","protected":false},"excerpt":{"rendered":"

Last week, we talked about China\u2019s AI ambitions and the catastrophic scenario if America loses the AI race. Today, I want to shift focus and talk about what AI means to America. Most people have heard of Adam Smith, even if they haven’t read him. He’s the Scottish economist who gave us the concept of […]<\/p>\n","protected":false},"author":276,"featured_media":19979,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[243],"tags":[1262,994,1589],"class_list":["post-19977","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-opinions-op-eds","tag-ai","tag-capitalism","tag-data-centers","cat-243-id"],"_links":{"self":[{"href":"https:\/\/gemstatepatriot.com\/blog\/wp-json\/wp\/v2\/posts\/19977","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/gemstatepatriot.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gemstatepatriot.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gemstatepatriot.com\/blog\/wp-json\/wp\/v2\/users\/276"}],"replies":[{"embeddable":true,"href":"https:\/\/gemstatepatriot.com\/blog\/wp-json\/wp\/v2\/comments?post=19977"}],"version-history":[{"count":1,"href":"https:\/\/gemstatepatriot.com\/blog\/wp-json\/wp\/v2\/posts\/19977\/revisions"}],"predecessor-version":[{"id":19978,"href":"https:\/\/gemstatepatriot.com\/blog\/wp-json\/wp\/v2\/posts\/19977\/revisions\/19978"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/gemstatepatriot.com\/blog\/wp-json\/wp\/v2\/media\/19979"}],"wp:attachment":[{"href":"https:\/\/gemstatepatriot.com\/blog\/wp-json\/wp\/v2\/media?parent=19977"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/gemstatepatriot.com\/blog\/wp-json\/wp\/v2\/categories?post=19977"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/gemstatepatriot.com\/blog\/wp-json\/wp\/v2\/tags?post=19977"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}