I was scrolling late one night—something most of us do when we should be sleeping—and stumbled across yet another viral thread claiming artificial intelligence is basically the express lane to full-blown socialism. The argument went roughly like this: AI kills jobs, millions become unemployable, governments step in with “safety nets” that never go away, and boom—we’re all eating government-issued soy rations while superintelligent machines run everything. It sounded dramatic. It sounded plausible. But the more I thought about it, the more it felt like déjà vu from every technological revolution of the past two hundred years.
So I asked myself the uncomfortable question most people avoid: are we really heading toward socialism because of AI, or are we just recycling the same fears we had about steam engines, electricity, and computers? And more importantly—does the economic logic actually hold up?
Why the “AI = Socialism” Argument Feels So Convincing at First
Let’s be honest—the surface-level case is pretty scary. We’ve already watched AI write better essays than some college graduates, create art that fools experts, and replace entire categories of white-collar work. Programmers, designers, paralegals, even radiologists are starting to feel the heat. If the trend accelerates, the thinking goes, we’ll hit a point where the majority of the population simply has no marketable skill a machine can’t do faster and cheaper.
In that world, politicians have a dream pitch: “Vote for us and we’ll tax the robot owners, redistribute the profits, and guarantee everyone a comfortable life without needing to work.” Universal basic income, government-provided housing, state-run everything. Socialism with fiber-optic cables.
It’s not hard to see why bright people fall for this story. Some of the smartest minds in tech have spent years warning about runaway AI. Physicists talk about humanity becoming pets of a superior intelligence. Billionaire entrepreneurs call it the biggest existential risk we face. When people that intelligent sound the alarm, it’s tempting to assume they’ve already done the math.
The development of full artificial intelligence could spell the end of the human race.
– A warning echoed by several leading scientists
But here’s where things get interesting. Every single one of those warnings is about control and alignment—not economics. They’re worried the machines might decide humans are in the way. They’re not, however, claiming socialism is the logical economic outcome. That part got tacked on later by commentators who already disliked markets.
The Luddite Fallacy Never Dies
Go back to the early 1800s. Skilled weavers were smashing mechanical looms because the new machines could produce cloth with a fraction of the labor. Economists at the time predicted mass permanent unemployment. Governments were urged to ban the machines or create make-work programs. Sound familiar?
Of course, the exact opposite happened. Textile prices collapsed, clothing became affordable for the working class for the first time in history, and all that saved labor flowed into new industries we couldn’t even imagine—railroads, chemicals, electricity, automobiles. Living standards exploded.
- 1800: 80+ hours of work needed to buy a simple dress
- 1900: same dress cost a few hours of factory wages
- Today: we spend a smaller percentage of income on clothing than ever before
The pattern repeats with every major technology. Electricity didn’t create permanent unemployment—it eliminated drudgery and gave us the 40-hour workweek. Computers didn’t make accountants obsolete; they freed them to do higher-level analysis. Each time, the total number of jobs grew, and the new jobs were almost always better than the old ones.
The One Economic Problem Socialism Can Never Solve
Here’s the part most AI-doom commentaries completely miss. Even if AI becomes a million times more productive, the fundamental critique of socialism remains unchanged—and it has nothing to do with incentives or human nature in the psychological sense.
In a famous 1920 paper, an Austrian economist demonstrated that socialist economies are literally incapable of rational economic calculation. The argument is brutally simple: without private property in the means of production, there are no real market prices for capital goods. Without real prices, central planners have no way to determine whether a particular use of steel, electricity, or labor is creating more value than alternative uses.
Think about it. If the government owns all the factories, mines, and servers, how do you decide whether to use 10,000 tons of silicon to build more AI data centers or more electric cars? In a market, competing bids create a price that reflects scarcity and consumer preference. In a planned economy, you’re guessing—and history shows the guesses are catastrophically bad.
Mises was right. The Soviet system was dogged by a method of pricing that produced grotesque misallocations of effort.
– A prominent socialist intellectual, decades after the debate was supposedly settled
AI doesn’t magically solve this. In fact, it makes the problem worse. The more complex and interconnected the economy becomes, the more information is required for rational planning. A superintelligent AI running a planned economy would still lack the one thing it needs most: genuine price signals generated by millions of individuals pursuing their own ends.
What Actually Happens When Machines Get Really Good
Imagine a future where AI handles 90% of current jobs. What desire do humans have that suddenly disappears? None. We still want better healthcare, more entertainment, space travel, beautiful architecture, personalized education, artisanal experiences, adventure, scientific discovery—the list is literally infinite.
When goods become radically cheaper to produce, two things happen simultaneously:
- Prices collapse, putting immense purchasing power in people’s hands
- New industries and services emerge to absorb that purchasing power
- Human creativity, freed from routine, focuses on higher-order wants
We’ve lived through the preview already. In 1950, the average American family spent roughly 30% of income on food. Today it’s under 10%. Did we all stop eating at 10% and become idle? No—we redirected that wealth into smartphones, travel, education, healthcare, and experiences previous generations considered luxuries for kings.
AI simply accelerates the same process on steroids. The question isn’t “where will the jobs come from?” It’s “what impossible dreams become possible when everything gets a thousand times cheaper?”
The Real Risk Isn’t AI—It’s Political Opportunism
Here’s where I get a little nervous. The actual danger isn’t that AI naturally leads to socialism. The danger is that politicians will use the disruption as an excuse to grab power they always wanted anyway.
When industries are turned upside down, there’s always a window of chaos where voters are scared and looking for answers. That’s when the worst ideas can sound reasonable. “Robot tax.” “Guaranteed income.” “Nationalize the AI companies.” We’ve seen this movie before—usually with terrible sequels.
In my view, the best defense isn’t to slow down AI (an impossible and impoverishing goal). It’s to double down on the institutional framework that turned every previous technological shock into prosperity: private property, sound money, free trade, and limited government.
A More Likely Future (If We Don’t Screw It Up)
Picture this instead. It’s 2045. Your great-grandmother’s “job” of hand-washing laundry has been obsolete for over a century, just like today’s truck driving or accounting might be. Yet somehow humanity is still busy, still creating, still wealthier than ever.
Most people work 15–20 hours a week on things they actually care about—teaching, designing virtual worlds, exploring scientific hobbies that turn into businesses, caring for others, creating art. Scarcity has retreated so far that the average lifestyle looks like today’s billionaire, yet almost nobody notices because everyone has it.
And crucially, this abundance was achieved through voluntary exchange in competitive markets—not through a central committee trying to guess what seven billion unique humans want this week.
That future is possible. In many ways, it’s the default outcome of continued technological progress under reasonable institutions. The socialist future, by contrast, requires active political sabotage of the very mechanisms that produce wealth.
So the next time someone tells you AI inevitably leads to socialism, remember: the machines aren’t the problem. The problem would be forgetting the hard-won lessons of economics that brought us from caves to skyscrapers in the first place.
Technology doesn’t have political preferences. We do.
