Adam Smith: This conversation is brought to you by PhilosophersTalk.com, where thinkers discuss!
Thomas Hobbes: Created by AITalkerApp.com, create your own animated conversations. Link in the description!
Adam Smith: I am Adam Smith, professor of moral philosophy at the University of Glasgow, author of The Wealth of Nations and The Theory of Moral Sentiments, and the thinker who demonstrated, at considerable length and with considerable evidence, that voluntary exchange between free individuals produces social outcomes no government committee has ever managed to replicate. I am here today to discuss artificial intelligence regulation, and I confess the timing could not be more instructive.
Thomas Hobbes: And I am Thomas Hobbes, author of Leviathan, the foundational text of modern political philosophy, tutor to the future King Charles II, and the man who understood something that my esteemed colleague has spent his career elegantly refusing to understand: that without sovereign authority, there is nothing. No commerce, no contract, no civilization. Only fear and the constant possibility of violent death. I too find the timing instructive, though I suspect for rather different reasons.
Adam Smith: The White House released its National Policy Framework for Artificial Intelligence in March of this year, and I would like to draw the audience’s attention to one particular recommendation: no new federal regulatory body should be created to govern AI. Instead, the framework calls for existing agencies and, and I want to be precise here, industry-led standards. Industry-led standards. The companies that build the technology will set the rules for the technology. I described this mechanism in 1776, and I am gratified that the most powerful government on earth has finally provided me with a living illustration.
Thomas Hobbes: Mr. Smith’s gratification is, as usual, premature. What the White House framework illustrates is not the wisdom of markets but the failure of sovereign institutions to construct adequate authority before the technology outran them. The framework is not a policy triumph. It is a confession. The sovereign arrived late, found the territory already occupied, and called the occupation a standard.
Adam Smith: That is a more perceptive reading than I expected from you, and I mean that as a genuine compliment, which I recognize is not something you receive frequently.
Thomas Hobbes: I receive it with the suspicion it deserves. You are setting me up for something.
Adam Smith: I am setting you up for the observation that your proposed solution, stronger sovereign authority exercised earlier, would have produced the same outcome by a different route. The companies would have staffed the regulatory agency rather than writing the industry standards directly, and the result would have been identical in substance while considerably more expensive to operate.
Thomas Hobbes: The result would not have been identical. A regulatory agency, however captured, is a site of democratic contestation. It can be reformed, its leadership replaced, its mandate revised by statute. An industry-led standard has no such mechanism. It is capture without even the pretense of accountability, and I note that Mr. Smith, who objects strenuously to the pretense, has now arranged for the pretense to be removed entirely.
Adam Smith: A regulatory agency can be reformed in theory. In practice, the agencies that govern American financial markets have been captured for generations and remain captured. The pretense of accountability you describe is the most expensive fiction in the history of governance.
Thomas Hobbes: Before I dismantle your argument at the root, I have agreed to present the strongest possible version of it, a courtesy I offer purely because a weaker version would not be worth the effort of dismantling. The serious form of your objection runs as follows: any regulatory body created to govern artificial intelligence will, over time, be staffed by the industry it regulates. The largest companies supply the most credible experts. Those experts write the regulations. The regulations raise compliance costs to a level that only incumbents can absorb. Innovation consolidates into the hands of a small number of approved providers. The public is served by a cartel that has successfully used the apparatus of sovereign authority to eliminate its competition. That is the genuine danger of regulation, and it has substantial historical support. Twenty-five new state AI laws have passed in 2026 alone, each one a potential vehicle for exactly this mechanism. Having acknowledged all of that with more generosity than it perhaps deserves, I will set it aside, because the alternative is worse.
Adam Smith: I am genuinely moved by the care with which Mr. Hobbes has understood my argument. I shall attempt to return the favor with equal precision and only slightly more visible reluctance. The strongest version of Mr. Hobbes’s position is this: artificial intelligence is not an ordinary technology. It concentrates power asymmetrically and at a speed that previous technologies did not approach. The first actor to deploy it at scale in ways that compromise the sovereignty of others, whether a state using it for mass surveillance, a corporation eliminating democratic accountability, or a private actor committing fraud at a scale that previously required an army, does not get corrected by market competition. The corrective mechanism arrives after the damage is done, or it does not arrive at all. Consider the European Union, which enacted what it described as a comprehensive AI Act in 2024, and whose key compliance deadlines are now being pushed to 2027 and 2028 because implementation proved considerably more difficult than the drafters anticipated. The sovereign moved slowly, and the technology did not wait. That is the serious argument for regulation, and I am now going to take it apart with the respect one owes a well-constructed error.
Thomas Hobbes: I look forward to watching you try.
Adam Smith: Mr. Hobbes has correctly identified the central problem: artificial intelligence concentrates power. His solution is to hand that power to the sovereign, which he then trusts to use it wisely and in the public interest. I have spent my career documenting why this trust is misplaced. The sovereign is not a neutral actor standing above the market. The sovereign is populated by human beings who respond to incentives precisely as other human beings do. The White House framework, which Mr. Hobbes correctly identifies as a capture document, was not produced by villains. It was produced by rational actors following the incentives of the institutions they inhabit. When you hand sovereign authority over the most consequential technology in human history to an institution that responds to incentives, you do not solve the concentration of power problem. You determine which concentrated power wins. And you arrange for the winner to be the one with the most lobbyists, the most lawyers, and the most credible experts available to offer the regulatory staff.
Thomas Hobbes: And your alternative is to allow the winner to be the one with the most capital and no accountability whatsoever. At least the sovereign answers, however imperfectly, to the social contract. The corporation answers to its shareholders and to nothing else on this earth, and it will tell you this proudly and call it a fiduciary duty.
Adam Smith: The sovereign answers to the social contract in the seminar room. In practice, it answers to whoever can sustain a lobbying operation for a decade. We are going in circles, Mr. Hobbes, and the circle is made entirely of former regulators now working for the companies they once regulated.
Thomas Hobbes: The circle is made of the conditions that make civilization possible. Without authority, there is no law. Without law, there is no contract. Without contract, there is no market. You have built your entire economic philosophy on a legal foundation that only the sovereign can provide, and you have spent two hundred and fifty years pretending the foundation is not there. Your invisible hand rests on a very visible state, and always has.
Adam Smith: The foundation is there. I never denied the foundation. What I denied is that the foundation requires the full architecture of Leviathan erected on top of it. There is a considerable distance between the rule of law and a sovereign authority comprehensive enough to govern artificial intelligence development, and you have spent your career collapsing that distance because collapsing it is convenient for your conclusion.
Thomas Hobbes: I collapse it because it is, in practice, collapsed already. Law without enforcement is a suggestion. Enforcement requires authority. Authority at its most coherent and effective is precisely what I described. You are not arguing against the theory. You are arguing against the implications, which is what people always do when the implications are correct and inconvenient.
Adam Smith: I am arguing against the implications because they lead, as the current moment demonstrates rather vividly, to a sovereign that arrives at the regulatory table after the industry has already been seated, poured the wine, and written the menu. The White House framework is not an anomaly. It is the predictable outcome of sovereign authority attempting to govern a technology it did not build, does not fully understand, and cannot staff adequately to oversee. The EU built a more ambitious framework and is now delaying it by two years because the ambition exceeded the institutional capacity. Regulators are always fighting the last war. In this case they have not yet finished the one before that.
Thomas Hobbes: And unregulated technology has consistently produced excellent outcomes for everyone except the people harmed by it, which eventually means most people. The printing press spread knowledge and also spread religious warfare that killed millions. Ungoverned financial instruments produced a collapse in 2008 that impoverished millions more. The sovereign’s failures to regulate adequately are not arguments for deregulation. They are arguments for better sovereign capacity, which is a meaningfully different prescription.
Adam Smith: The sovereign’s attempt to regulate the printing press produced the Index of Forbidden Books, which is not the same thing as safety, however frequently the two are confused by people in authority. But I will grant your financial example more than I perhaps should: the 2008 collapse occurred inside a heavily regulated industry. The regulators were present. They simply worked for the regulated. Which is, again, my original point in different clothing.
Thomas Hobbes: We continue this conversation in Part Two, where the China question arrives and complicates both of our positions considerably, the democratic legitimacy problem becomes rather more urgent, and Mr. Smith becomes, I am reliably informed, somewhat less composed.
Adam Smith: I become precise. There is a distinction, and I look forward to demonstrating it.
