So, which of market or planning optimises welfare best?
The first theorem of welfare economics, which was demonstrated by Maurice Alais in the case of industrial goods, states that market price equilibrium optimises economic welfare. This theorem justifies for example that medicines can be produced for profit by private firms which compete each other and are free to set market price, because market will eventually optimise welfare and thus save lives.
However, this theorem does not apply to so-called non rival goods, such as information, software or AI models. Unlike medicine, an AI model can be copied at no cost. The only price that optimises welfare for AI models is zero, because it costs nothing to provide an AI model to every human being: it is just software.
Yet, most AI startups in the field healthcare intend to commercialise AI models either as a pay per use service or through proprietary licensing schemes, both of which depart from zero price. Market is therefore not able to optimise welfare. Instead, it leads to the formation of monopolies and eventually high prices.
Planning has other issues. It is not able to predict the future of demand and is thus weak at handling innovation. If we consider Big Data Challenges, not everyone is informed or invited to participate. Many opportunities of innovation are lost.