Uploaded July 2026 | Updated September 2026, 2 weeks ago
There is no separate "economics of AI," Peter Klein argues, any more than there was an economics of the internet—there's just economics, applied to specific goods and services. He demystifies what today's models actually do (predict the next word), places them in a long history of "new economy" hype that never required new economic theory, and works through the industry with standard tools: subjective value, the theory of the firm, network effects, and the incumbents' lobbying for regulation to raise rivals' costs. He closes on the deeper question—whether an AI can act in Mises's sense—and argues it cannot: an AI exercises what he calls derived judgment, executing tasks on an entrepreneur's behalf, but it can never decide whether to be an entrepreneur at all.
Recorded at the Mises Institute in Auburn, Alabama, on July 24, 2026.
Mises University is the world's leading instructional program in the Austrian School of economics, and is the essential training ground for economists who are looking beyond the mainstream.
0:00 Intro: There Is Only One Economics
4:02 AI in Historical Context: From the Odyssey to Turing
7:04 How AI Works: Symbolic AI, Neural Nets, and Transformers
12:15 Narrow AI vs. Artificial General Intelligence
13:15 The Basic Economics of AI Goods and Services
16:16 The "New Economy" Myth and Information Goods
22:22 The AI-Producing Sector: Models, Open and Closed
27:23 Pricing, Energy, and Regulatory Capture
31:25 The AI-Using Sector: AI as a Tool
36:26 Prediction Machines and the Value of Judgment
41:27 Can AI Act? Praxeology and Judgment
46:33 Summary
Find free books, daily articles, podcasts, lecture series, and everything about the Austrian School of Economics at https://Mises.org.
X ► https://x.com/mises/
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Podcasts ► mises.org/podcasts
There is no separate "economics of AI," Peter Klein argues, any more than there was an economics of the internet—there's just economics, applied to specific goods and services. He demystifies what today's models actually do (predict the next word), places them in a long history of "new economy" hype that never required new economic theory, and works through the industry with standard tools: subjective value, the theory of the firm, network effects, and the incumbents' lobbying for regulation to raise rivals' costs. He closes on the deeper question—whether an AI can act in Mises's sense—and argues it cannot: an AI exercises what he calls derived judgment, executing tasks on an entrepreneur's behalf, but it can never decide whether to be an entrepreneur at all.
Recorded at the Mises Institute in Auburn, Alabama, on July 24, 2026.
Mises University is the world's leading instructional program in the Austrian School of economics, and is the essential training ground for economists who are looking beyond the mainstream.
0:00 Intro: There Is Only One Economics
4:02 AI in Historical Context: From the Odyssey to Turing
7:04 How AI Works: Symbolic AI, Neural Nets, and Transformers
12:15 Narrow AI vs. Artificial General Intelligence
13:15 The Basic Economics of AI Goods and Services
16:16 The "New Economy" Myth and Information Goods
22:22 The AI-Producing Sector: Models, Open and Closed
27:23 Pricing, Energy, and Regulatory Capture
31:25 The AI-Using Sector: AI as a Tool
36:26 Prediction Machines and the Value of Judgment
41:27 Can AI Act? Praxeology and Judgment
46:33 Summary
Find free books, daily articles, podcasts, lecture series, and everything about the Austrian School of Economics at https://Mises.org.
X ► https://x.com/mises/
Facebook ► facebook.com/mises.institute
Instagram ► instagram.com/misesinstitute
SoundCloud ► soundcloud.com/misesmedia
Apple Podcasts ► podcasts.apple.com/us/artist/mises-institute/1280664810
Rumble ► rumble.com/c/c-2212754
Odysee ► odysee.com/@mises
Podcasts ► mises.org/podcasts
