Communist experiments have largely failed because of Hayek’s Knowledge Problem. Hayek — Thatcher and Reagan’s go-to economist —explained that no state apparatus could ever know what was best for individuals, or a country, because it’s too far removed from the details of daily life. A market economy, by contrast, decentralises decision-making to the lowest level. For example, the market — not the state — determines the price of a loaf of bread in a village, as Adam Smith described in his Wealth of Nations.
But now along comes AI. AI can devour vast amounts of data and, soon enough, might overcome Hayek’s Knowledge Problem. AI could govern in ways that Stalin, Enver Hoxha, or Pol Pot couldn’t have imagined.
A key strand of Marxism often overlooked is his theory of history. Marx argued that society progresses through stages: slavery, feudalism, capitalism, then socialism, and finally progressing to communism.
When the Russian Revolution happened in 1917, many British communists disapproved, believing Russia hadn’t sufficiently developed and had skipped Marx’s fourth stage — socialism.
Fast forward to the UK today. We have the highest taxation levels in decades, with NHS spending alone accounts for around 11% of GDP. The NHS, social benefits, and public education are all examples of socialism in action — redistribution at work. It’s as obvious as Boris Johnson’s unsuitability for high office that today we’re living in Marx’s fourth stage of history. But will his final stage of history come to pass, all aided by AI?
If AI (or “Skynet,” for the sci-fi inclined) can solve Hayek’s Knowledge Problem, we may finally see if Marx’s vision holds true. A world where we can, in Marx’s own words, “hunt in the morning, fish in the afternoon, rear cattle in the evening, criticise after dinner, just as I have a mind, without ever becoming hunter, fisherman, shepherd or critic” just may become a reality.
I know this thought terrifies many of you.
(Photos are of Stalin’s bedroom, study, train, plus a bust of him, taken by me in Gori, Georgia, in 2005)
