Mises Argues Monetary Inflation Fuels AI Excesses

In a June 13 opinion piece on Mises.org, Brendan Brown argues that Pope Leo XIV's encyclical "Magnifica Humanitas" (May 2026) - which calls for robust AI regulation and greater inclusion of moral voices in AI development - does not acknowledge the role of monetary policy in driving the AI investment boom. Brown contends that an "unsound money regime" and persistent monetary inflation have produced malinvestment in the digital and AI sectors by distorting capital-market signals.

Brown presents an Austrian-economics critique rather than empirical analysis. The mechanism he posits: central-bank monetary expansion lowers the cost of capital, channeling funds toward speculative technologies - including AI - that would not attract investment under sound-money conditions. The article frames this as a structural driver of AI excess that governance reformers and the papal encyclical both overlook. If the Pope recognized this link, Brown suggests, the Church could build moral authority for "sound money" as a check on AI-sector excess. These are argument-level claims presented as opinion, not sourced empirical findings.

Commentators from multiple traditions have linked cheap money to sectoral booms and busts, and some academic work connects lower real interest rates to increased investment in intangible and speculative assets. Observers will recognize this as a reframing of AI risk from technical safety and governance toward macroeconomic incentives - a perspective uncommon in mainstream AI policy circles but not without precedent in heterodox economics.

For policy-minded practitioners: the article shifts the frame from model safety and regulation to the economic incentives that shape capital flows into AI research and deployment. Funding conditions influence research priorities, startup formation, and deployment pace. Pope Leo XIV's encyclical was presented alongside Anthropic co-founder Christopher Olah at the Vatican on May 25, 2026, and has drawn wide commentary; the Mises piece represents a libertarian-economics response to that discourse.

• •Whether other economists or policy voices echo the link between monetary conditions and AI-sector malinvestment.
• •Any empirical studies testing whether low real rates have disproportionately inflated AI investment.
• •How papal and civil-society AI governance efforts engage - or do not engage - with macroeconomic incentives as a structural driver of AI development.