Artificial Intelligence and Capitalism

Surbhi Tyagi, Lady Shri Ram College For Women

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In the last few decades, Artificial Intelligence has undergone exponential growth in its capacities.
It is no longer a part of the dystopian future that science fiction movies, pop culture and books
narrate, but has become general-purpose technology that permeates every corner of our life.
From self-driving cars to facial recognition in large-scale surveillance systems, all over the
world, there is a relentless race to leverage the benefits of AI. Considered to be the 'Fourth
Industrial Revolution', AI with its algorithms and cutting edge automation has started to impact
the economic and societal organisation and decision making (Marr, 2018). While debates on
ethics of AI are long-standing, recent contestations on the effect of AI on capitalism and the
economy have surfaced.

AI and robots have the potential to revolutionise our way of life, labour market and economy.
Scholars are increasingly claiming AI to be the last frontier of capitalism.(Katte, 2019) With the
coming of automation, the tasks normally done by human beings are now done by machine and
given the rapid rate at which AI is developing, the substitution of human labour will perpetuate.
The complementary effect of automation claims that when a human job is automated, the amount
of wealth generated in the economy increases. That increases demand, which in turn increases
employment. Therefore AI will lead to the generation of more jobs. This might be true for the
short term but in the long term, it will become convenient and feasible to replace most jobs. The
end result of this is not difficult to imagine - a labourless world.

Replacement of jobs by algorithms and robots threatens social upheaval due to mass
unemployment and the creation of the ‘useless class’ (Niyazov, 2019). The working class having
no advanced technical skills or knowledge will lose their leverage in the workplace. This will
force them out of the labour markets which would come to be dominated by robots. As human
labour gets weakened, the workers will be left with no viable employment alternative. The
cumulative economic and emotional resentment and frustration of this class towards the wealthy,
who obviously will comprise of owners and controllers of automated knowledge, threatens to
destabilize the economy and society. Capitalism has so far survived because of its abilities of
co-opting dissent and hegemonic consent. However, the scope of co-option in the AI-driven
world seems rather bleak, thus directly challenging the foundations of capitalism. Capitalism’s
undying thirst for innovation, production and technological advancement gave birth to AI which,
in Karl Marx’s words, might prove to be capitalism’s ‘inherent contradiction’.

AI threatens to dig capitalism’s grave by exposing yet another one of its inherent contractions of
overproduction. Capitalism is saddled with a crisis of overproduction. The introduction of AI
would only aggravate the crisis by making millions of jobs obsolete thus reducing the consumer
market. This would directly hamper the health of capitalist economies forcing states to replace
the ‘invisible hand’ with a democratically planned socialist economy. The flourishing of AI will
only generate benefits for the tech overlords, i.e., those who invent and control the robots. These

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owners of AI will naturally be reluctant to share the benefits of the technological advancements
with others leading to increased income gaps in the society, which would again give impetus to
state involvement in the economy to guarantee universal basic income and minimum standards
of living. The only recourse that would be available with the government to finance the welfare
schemes on such a scale where a percentage of the population will be dependent on government
assistance will be increased taxation on income and consumption. State’s involvement beyond a
certain level will eventually put an end to unregulated, laissez-faire capitalism. AI can thus,
nullify capitalist equilibrium and tip the balance in the favour of centralized economic
systems.(Xiang, 2018)

The opposite camp claims that AI will make capitalism more embedded and pervasive in our
lives in the form of the big data economy. The advent of surveillance capitalism which uses
business models based on the digital world is extremely reliant on the big data generated from AI
to make money. (Innis, 2018) Knowledge and data have replaced capital to become the
foundational stone of capitalism. AI is used to study consumers, target them and control their
choices through subconscious consent. AI is furthering the concept of non-coercive domination
and this consensual compliance is useful for capitalists to promote their cultural, moral,
economic and ideological gains. Shoshana Zuboff claims that AI is converting humans into
pawns of ‘Silicon Valley’s capitalists’ by fashioning private human experience into computed
behavioural predictions for production and exchange.(Kowalczyk, 2020) Data extraction, social
and psychological profiling and behaviour control have provided astonishing business growth for
the companies giving a further push to commercialisation and market capitalism. Experts fear
that AI not only has the potential to strengthen the capitalistic roots of the economy but also
transform the world of politics.(Chace, 2020) The recent case of involvement of Facebook and
Cambridge Analytica in 2016 US Presidential election is considered to be the first step towards
operation of reigns of politics by surveillance capitalism. With AI increasing the profitability of
capitalism, improving decision making and rationalization, capitalism’s fall due to AI is difficult
to imagine for some.

Artificial Intelligence has significant potential to boost economic growth and productivity that
strengthens capitalism but at the same time, it harbours the seeds of destruction of capitalism as
it creates risks of job market polarization, rising inequalities, structural unemployment and
emergence of a new and undesirable industrial structure. The rise of automation will certainly
accompany the rise in inequalities and when that happens the state would be called in to protect
the tenets of the society which will weaken the dynamism and resilience of capitalism. The
disruptive effects of AI on capitalism are predicted to trump its profitability of computerisation.

This paradox requires the creation of viable and suitable conditions to nurture the potential of AI
along with carefully addressing and defusing the risks it poses.(Szczepanski, 2019) The core
issue in this dilemma are the questions about the distribution of gains from AI and harnessing of

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AI with ethics. Only time will tell, whether AI will force capitalism out of existence or become
its elixir. The present is for thinking about what form of economy and society can ensure that we
get the most out of AI and robots, to defend against future human joblessness and tech titans
cornering all the riches. (Chu, 2018)

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References

1) Chace, C. (2020, June 15). Artificial Intelligence, & Fully Automated Luxury Capitalism.
Forbes.
2) Chu, K. (2018, July 20). If AI takes over the world, capitalism may well not survive.
South China Morning Post.
3) Engster, F., & Moore, P. V. (2020). The search for (artificial) intelligence, in capitalism.
Capital & Class, 44(2), 201–218.
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5) Katte, A. (2019, December 15). AI And Capitalism: Why The Ghost Of Marx May Be
Secretly Smiling. Analytics India Magazine.
6) Kowalczyk, H. A. (2020, April 20). Human and artificial intelligence in capitalism. Data
Driven Investor.
7) Marr, B. (2018, July 2). How Artificial Intelligence Could Kill Capitalism. Forbes.
8) Niyazov, S. (2019, November 30). The Future of Capitalism in the Age of A.I. - Towards
Data Science. Medium.
9) Szczepanski, M. (2019, July). Economic Impact of Artificial Intelligence (AI). European
Parliament.
10) Xiang, F. (2018, March 3). AI will spell the end of capitalism. Washington Post.