When the Music Stops: AI and Deflation

Artificial Intelligence is rewriting the rules of economics, but is also bounded by that same economics. This is a long article, even by my standards. It represents my thinking about the implications of artificial intelligence on the economy, beyond the normal cheerleading that seems to so frequently accompany discussion of topic. Feel free to respond to me at kurt.cagle@gmail.com Artificial intelligence, the use of computer processes to infer and make decisions on information about the world that is not necessarily explicitly given, has been a hallmark of much of this decade. From word processors that went from simple spell check to office suites that now have a significant hand in the production process, from cruise control to self-driving vehicles, from halting speech recognition software to fully integrated video/audio concept recognition, AI and its related technologies have quietly but perhaps irrevocably changed our relationship with computers far more than most people realize. Yet as the information revolution continues, the impacts that it is having upon our economy are now reaching an extent where most of the models that economists have formulated about how that economy works are being thrown out. We're in terra incognita at this stage, and this, in turn, is forcing politicians, policy makers, economists, business leaders and everyday people to rethink many of the fundamental assumptions on which we base our notions of work, value and utility. Almost everything that deals with intellectual property has gone digital in the last three decades, as we move from an environment where not only are the physical products that used to convey that IP - from novels to newspapers to movies to music no longer require the physical media to transport content, but increasingly IP being produced today cannot be transcribed back to physical media.