Economic patterns in a world with artificial intelligence

Abstract

This article outlines relevant economic patterns in a world with artificial intelligence (AI). Five specific economic patterns influenced by AI are discussed: (1) following in the footsteps of 'homo economicus' a new type of agent, 'machina economica', enters the stage of the global economy. (2) The pattern of division of labor and specialization is further accelerated by AI-induced micro-division of labor. (3) The introduction of AI leads to triangular agency relationships and next level information asymmetries. (4) Data and AI-based machine labor have to be understood as new factors of production. (5) The economics of AI networks can lead to market dominance and unwanted external effects. The analytical perspective is rooted in institutional economics and serves to integrate findings from relevant disciplines in economics and computer science. It is based on the research proposition that 'institutional matters' are of high relevance also in a world with AI but that AI gives a new meaning to these matters. The discussion unveils a reinforcing interdependence of the patterns portrayed and points to required research.

Poland in the Digital Age

“…The advancement and adoption of artificial intelligence in the 21 st century, and its progression towards becoming a major geopolitical factor, predisposes the extraordinary acceleration of scientific and technological progress as a major force shaping global politics and the world economy (Brynjolfsson 2014;Butcher 2018). Sustaining that the continued progress in machine learning has driven new global transformational trends invoking the rise of techno-nationalism (Miailhe 2018;Möllers 2020), recent contributions from International Relations theory (Choucri 2012;Maurer 2019) and Institutional Economics (Parkes 2015;Wagner 2020) are used to having a converged and joint understanding about the impact of cyberspace and new technologies towards foreign policy and the nation-state. Thus, under the lens of neoclassical realism, process-tracing methods are utilized to assess the impact of algorithmic agents in international affairs by considering its effects at both the macro-and micro-levels in the areas pertaining to social, economic, political, and institutional phenomena.…”

“…Thus, the lack of an imperative in balancing China (Fägersten 2019) and the American private sector (Herrero 2019) in the last decade allowed Poland and Europe to head off in different directions that make it more difficult for Europeans to coalesce around a single choice in the near future. The variation in state preferences in Europe, in part due to the influence that each of their distinct economic position has in their response to these systemic imperatives (Brawley 2012), most clearly seen in Sino-German economic relations (Rangel 2020;Sebena 2020) In addition, the growing interconnectedness of people, organizations, and machines which results from the Internet brings forward a change in the underlying dynamics of the econosphere as a platform-based ecosystem powered by data, cloud computing, and advanced manufacturing displaces previous economic principles (Dopfer 2005;Harper 2012;Wagner 2020). As we make the transition into the digital economy, the penetration of digital technologies into entire societies and the use of machine learning in big data analytics create new challenges for Polish leaders at a time when big tech firms are increasingly growing in scale and influence in the midst of the events pertaining to 2020.…”

“…The introduction of AI agents into society and their role as the new economic actors uncovers new economic patterns which transcend economic theory as human-agent collectives dictate new properties to digital entities where individuals are no longer the ultimate point of reference of moral obligations (Kirschgässner 2013;Puaschunder 2018). Subsequently, in a digital environment where humans are the minority on the Internet since 2010, adjustments in the division of labor between humans and machines become pronounced, since "in a world with AI a transition takes place from the economic pattern of division of human labor and specialization… to micro-division of labor and even further specialization" (Wagner 2020).…”

“…Interestingly, while we present the strategic value of cyberspace with its impact on international affairs (Maurer 2019) and the erosion of our economic and institutional order rooted in normative individualism in the midst of AI agents and human-agent collectives (Wagner 2020), digital data as an increasing element in the production of knowledge and China's institutional statecraft illustrates several complications deriving from the Information Age (Solove 2004;Ikenberry 2017), thereby demanding suitable institutional arrangements founded on agent-based computational economics within the context of broader changes which affect the international order (Nye 2011;Agrawal 2019;Daneke 2020).…”

“…A few further insights can be supplied. First, in regards to the geoeconomics of data, growing state intervention in cyberspace and the abusive practices by large tech corporations, both prevailing in the logic of the United States' promotion of a free flow of data and China's wide-ranging restrictions on cross-border data flows ultimately pushes Poland to pursue a strategy under the umbrella of a technocratic supra-national system suffering from a contemporary legitimacy crisis (Rensmann 2019) as growing complications persist (Gaub 2020 Secondly, data, software, and computation not only structure our behavior and modify the principles of economics but also demand major institutional changes (Koppl and Kauffmann 2015;Wagner 2020). While new factors of production, such as data and AI-based machine labor, now entail new set of rules and theoretical concepts (Parkes and Wellman 2015), the ability to predict and shape human behavior through customized databases and machine learning tools (Stachl 2020) uncovers new paradigms in capitalisms' value creation model, as well as governmental and public administrative use of algorithmic and advanced technologies (Landau 2020).…”