In this Institute of Economic Affairs interview, IEA Editorial Director Kristian Niemietz speaks with Professor Peter Boettke, professor of economics at George Mason University. The conversation explores artificial intelligence and what it means for both capitalism and socialism, starting with a deep dive into the original socialist calculation debate of the 1920s and 1930s between Ludwig von Mises and socialist economists. Professor Boettke explains how Mises demonstrated that without private property and market prices, socialist planners cannot make rational economic calculations to distinguish between technologically feasible and economically viable projects. This fundamental inability to “produce more with less” meant socialism could never achieve its promised burst of productivity, instead leading to economic deprivation and political tyranny. The discussion covers the historical figures involved, from Marx’s critique of capitalism to Bukharin’s New Economic Policy, and why the economic calculation problem wasn’t about bad leaders but inherent systemic flaws. The conversation then turns to modern concerns about “techno-socialism” and whether AI changes the calculation debate. Professor Boettke argues that while AI improves data processing, it doesn’t solve the fundamental problem of needing market-generated prices to guide resource allocation. He contrasts invention with innovation, emphasising that innovation requires the creative powers of a free society rather than committee-based planning. The interview concludes with thoughts on AI in education, the difference between human capital building and signalling, and why technological advancement depends on allowing dissenters and outsiders to innovate freely. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit insider.iea.org.uk/subscribe
