Chinese Scholar Predicts Artificial Intelligence Will Bring the ‘End of Capitalism’

In this April 26, 2018, photo, a robot entertains visitors at the booth of a Chinese automaker during the China Auto 2018 show in Beijing, China. Under President Xi Jinping, a program known as "Made in China 2025" aims to make China a tech superpower by advancing development of industries …
AP/Ng Han Guan

In an op-ed published by the Washington Post last week, law professor Feng Xiang of Tsinghua University predicted that artificial intelligence (AI)technology will usher in the final triumph of socialism and the “end of capitalism.”

The essay offers valuable insights into the ideological war China will wage against the United States in the coming decades, arguing that its system of authoritarian central planning is economically, socially, and morally superior to free-market capitalism.

Feng’s central point is that artificial intelligence could either create more “income inequality” by allowing capitalist fat cats to rake in bigger profits with lower costs for human labor, or it could be harnessed to socialist political leadership to make central planning work better. He phrases this explicitly as a sales pitch for China’s “socialist market economy”:

The most momentous challenge facing socio-economic systems today is the arrival of artificial intelligence. If AI remains under the control of market forces, it will inexorably result in a super-rich oligopoly of data billionaires who reap the wealth created by robots that displace human labor, leaving massive unemployment in their wake.

But China’s socialist market economy could provide a solution to this. If AI rationally allocates resources through big data analysis, and if robust feedback loops can supplant the imperfections of “the invisible hand” while fairly sharing the vast wealth it creates, a planned economy that actually works could at last be achievable.

The more AI advances into a general-purpose technology that permeates every corner of life, the less sense it makes to allow it to remain in private hands that serve the interests of the few instead of the many. More than anything else, the inevitability of mass unemployment and the demand for universal welfare will drive the idea of socializing or nationalizing AI.

Marx’s dictum, “From each according to their abilities, to each according to their needs,” needs an update for the 21st century: “From the inability of an AI economy to provide jobs and a living wage for all, to each according to their needs.”

Feng is essentially responding to Friedrich Hayek’s argument that free markets are smarter than centrally-planned economies, because a vast network of individual investors, entrepreneurs, and customers can absorb and process more information about opportunities and pitfalls more quickly. The socialist fantasy of brilliant, selfless, morally superior political leaders designing a fair and prosperous economy keeps running into the limitation of human ability to gather and process information in a timely manner. Capitalists find new market opportunities while central planners struggle with political biases and outdated information.

China’s new idea is that AI will finally allow central planners to overcome their knowledge deficit against the free market, creating a new high-tech economic utopia where prosperity and social justice are perfectly balanced … but there’s actually nothing new about the ideas Feng lays out. Adding the power of artificial intelligence technology does not change the nature of those ideas.

There is already a name for the political philosophy China espouses, and that name is not “communism” or “socialism,” no matter how strenuously the Chinese Communist Party will insist on those labels. The correct term for modern China’s ideology is fascism.

Fascism is not defined solely by ethnic repression, the brutal suppression of dissent, cults of personality, or a pervasive police state, although China has all of those things. The political and social horrors of fascism flow from its core economic theory of privately-owned capital controlled by the political elite. Unlike communism, there is private ownership of capital, but every enterprise is expected to obey the commands of the central government for the greater good of the state. That is a much more accurate description of modern China than “communism” or “socialism.”

Everything Feng proposes about the superiority of China’s system, enhanced with artificial intelligence technology, was said about Italian and German fascism before World War II. Fascism was touted as practically and morally superior to free-market capitalism. Its admirers saw it as a kind of economic superweapon that urgently needed to be embraced by the Western world before it fell behind. They said there was no way selfish, short-sighted, profit-hungry captains of industry fighting each other and sacrificing the public good to line their own pockets could possibly compete with fascist governments pursuing unified industrial plans designed by the most brilliant minds of the era.

Feng repackages that 20th Century argument for the 21st Century:

These companies have been able to get away with their social irresponsibility because the legal system and its loopholes in the West are geared to protect private property above all else. Of course, in China, we have big privately owned Internet companies like Alibaba and Tencent. But unlike in the West, they are monitored by the state and do not regard themselves as above or beyond social control.

It is the very pervasiveness of AI that will spell the end of market dominance. The market may reasonably if unequally function if industry creates employment opportunities for most people. But when industry only produces joblessness, as robots take over more and more, there is no good alternative but for the state to step in. As AI invades economic and social life, all private law-related issues will soon become public ones. More and more, regulation of private companies will become a necessity to maintain some semblance of stability in societies roiled by constant innovation.

As with every lazy argument for socialism on American campuses, Feng fields an army of straw men against the forces of capitalism, such as his absurd notion that capitalism could just stop creating jobs for humans because robots are cheaper, and his parting shot at a state of “laissez-faire capitalism” that exists nowhere in the world, and most certainly not in the America of 2018. Socialists always get away with whining that “true socialism has never been tried” as they tiptoe around the grisly wreckage of places like Venezuela, but laissez-faire capitalism really is the system that has never been tried.

Feng does have a solid point that economics and politics converge in the concept of resource allocation, but the measure of a society is not solely determined by the efficient distribution of resources. There are plenty of highly-efficient system concepts that turn into obscene horrors when attempts are made to force them upon real people, or that fail once human peculiarities are introduced into the equation. Humans are not worker bees, and they never will be. The level of compulsion necessary to enforce a centrally-planned economy developed with AI assistance would be incompatible with anything resembling the Western ideal of individual liberty and constitutional rights.

That’s a feature, not a bug, to China as it gears up for ideological combat against the United States and Europe to determine who will be the hegemonic global force for the rest of this century. The point is to convince people across the developing world, and enthusiasts for socialist authoritarianism in the U.S., that the Constitution is obsolete junk superseded by the latest brilliant plan for Utopia. It’s not a new argument, no matter how powerful the computers employed to draft that plan are.

Unfortunately, it’s always been an argument that swayed too many people in the free world. China will promote it far more effectively than Nazi Germany or Soviet Russia ever did. The defenders of liberty and capitalism had better start getting into shape for the fight of the millennium.

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