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Economist Adam Smith, who introduced the idea of the “invisible hand” to explain how markets naturally regulate themselves, also showed how dividing tasks in a pin factory could boost productivity. Today, advanced technologies like artificial intelligence and digital “twins” are revolutionising industries in a similar way, creating new jobs and driving economic growth through innovation and efficiency.
Essential Question: How do Adam Smith’s principles of the “Invisible Hand” and free markets continue to shape modern economies and innovation, as seen in both traditional systems and contemporary technologies like AI and digital marketplaces?
Click to read the article below and then answer the questions:
AI productivity will be as profound as Adam Smith’s pin factory
Discussion Questions
How does Soumaya Keynes compare the potential economic impact of AI? What is the significance of this comparison?
What role do AI and digital twins (DTs) play in modern factories like BMW’s iFactory?
How are the advancements in AI and digital infrastructure changing the labour market, according to the article?
How does the division of labour in Adam Smith’s pin factory relate to modern AI and DT technology?
What economic concept does the article suggest might experience an “inflection point” due to AI and digital technologies? What historical comparison is made?
How might free markets support the adoption of AI and DT technologies?
Joel Miller and James Redelsheimer, Foundation for Economic Education.
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