A recent conversation with a group of economics graduates at Chulalongkorn University in Bangkok followed by a meeting with a leading AI entrepreneur at the cutting-edge of this technology left me reflecting on several fundamental questions. Most importantly, does AI truly mark an economic revolution or are we overstating its uniqueness?

Economics has always adapted to major disruptions - Adam Smith’s free markets emerged as mercantilism faded, Karl Marx’s critique addressed industrial exploitation, John Maynard Keynes addressed many of the economic issues arising from the Great Depression and monetarism developed against a background of stagflation. Many argue however that AI is in a totally different league driving unprecedented change and challenging most, if not all, long-held assumptions about labour, productivity and decision-making. But is AI in fact fundamentally different from past industrial transformations?

The “dismal science” has long debated the role of labour in economic production. AI is automating not just routine tasks but high-skill cognitive work which fuels concerns about widespread job losses. But would Adam Smith see this as revolutionary or merely an extension of the division of labour? Every major technological leap - from mechanisation to computing - displaced jobs but ultimately created new ones. Are we too quick to assume AI will eliminate more work than it generates? If productivity is no longer directly tied to human effort, does this make universal basic income and AI-driven wealth redistribution inevitable or will there be better ways to integrate AI-driven gains into the broader economy?

AI is also reshaping decision-making. Classical economic models assume humans act rationally to maximise utility and this influences everything from market prediction to policy design. Yet AI, trained on human data, can reinforce inefficiencies and biases rather than eliminate them. Would Adam Smith see AI as an extension of the invisible hand? As AI influences financial markets and policymaking, will it enhance economic efficiency or introduce new algorithmic biases thereby creating unforeseen distortions?

The real risk may not be AI itself but our assumptions about its impact. Will it be the most disruptive force since the Industrial Revolution, or simply another chapter in the evolution of economics? The dismal science has faced many transformations - perhaps AI is just the next.

How do you see economic policy adapting to AI’s role?

#economics #macroeconomics #artificialintelligence #digitaltransformation #economicpolicy #investmentbanking #financialmarkets #futureofwork #monetarypolicy #globaltrade