CAI1020 Week Six: AI and the Economy

1. From Tools to Economic Agents

Speed and scale exceed human oversight.

The decision-making power migrates upward.

economic decisions that used to be distributed across thousands of individual managers, loan officers, pricing teams, and recruiters are now made by the system

Accountability becomes diffuse.

2. Algorithmic Pricing

The California Case

  • In 2026, a class action lawsuit was filed in California alleging that AI-driven pricing algorithms used by major gasoline retailers had resulted in prices systematically higher than competitive markets would have produced.
  • Price fixing by gas stations
  • Software is called Kalibrate.
  • article
  • Hedge funds; algorithmic trading
  • The Hummingbird Project
  • The Flash Boys

    • The Agency and Responsibility Puzzle

  • Much antitrust doctrine was designed for a
  • world of human conspirators, though newer laws such as California’s AB 325 are beginning to address algorithmic pricing directly.
  • Who is actually making the market decision?
  • coordination without agreement, harm without conspirators, and outcomes without authors
  • Algorithmic pricing is commonly used in airlines, hotels, ridesharing, e-commerce, and housing rentals.

    • 3. AI and the Future of Work

  • Will AI cause mass unemployment?
  • It can reduce worker autonomy, increase surveillance, and challenge the current entry-level learning pathways
  • Previously, it was thought that jobs requiring high intelligence and/or creativity were safe

    • Work, Autonomy, and Dignity

  • The shift from creator to editor. – skilled worker's job changes from producing to reviewing and correcting AI output.
  • The erosion of judgment. – workers often become rubber stamps
  • Surveillance and pace control. – granular monitoring is demoralizing and dignity reducing.
  • Player Piano

    • The Generation Z Perspective

  • The credential paradox. – AI is demonstrating that many knowledge tasks can now be automated or significantly augmented
  • Awareness of training exposure. – Gen Z is aware that their creative and intellectual output may be used to train systems that then compete with them.
  • The autonomy deficit. – AI is absorbing tasks that previously used human judgment is viewed as a loss of professional agency.

    • 4. The Geopolitical Dimension

  • The same agency problem appears at a larger scale when a small number of firms and countries control the infrastructure through which AI decisions are made
  • Frontier AI development is concentrated in a small number of nations,
  • dependency on foreign choices about what gets optimized, what gets monitored, and what gets decided

    • 5. The Justice Question

    What would a just AI economy need to preserve, regardless of how it distributes gains?
  • Human agency in consequential decisions.
  • Meaningful work.
  • Democratic control over essential infrastructure.
  • A share of the gains for those disrupted.