By Celine Noureddine
Illustration by Keo Morakod Ung
I. Introduction
Economics presents solutions to worldwide dilemmas through the aim of highest efficiency. The technical soul of economics hides the hard truth: real-world outcomes are often shaped by political decisions rather than the favourable, logical solution. By ignoring politics in economics, we fail to present a complete understanding of markets. With the rise of Artificial Intelligence (AI) and tech companies to power, uncovering the political influence within markets is highly imperative. Therefore, this article explores the political forces behind AI regulation and corporate lobbying, concluding why economics education must include political analysis.
II. The Politics within AI and Automation
AI-driven automation—including enabling AI to make decisions and perform tasks—is not simply about demand for technology; it is shaped by government policy, corporate lobbying, and economic power struggles. For instance, OpenAI (ChatGPT), Microsoft, and Google lobby for minimal AI regulations to maintain their competitive edge, while the EU prioritises labour protections and ethical dilemmas. According to the Financial Times, Silicon Valley has recently fought against the EU’s strict AI regulations. Under the new Trump administration, tech forces feel empowered to address EU fines on AI, accusing the EU of limiting competition and decreasing innovation. Consequently, this pressure on the EU’s AI Act could increase control of AI-automation, implying job losses, monopolies controlling data, and weak labour protection. The labour force opposition to AI automation is already seen in recent strikes, such as Hollywood’s 2023 strike over the fear of AI voices and visuals replacing real-life actors. Moreover, in a 2024 Vox article, reporter Samuel explains how AI models require people’s data to boost model performance, prompting publishers and writers to use paywalls to protect against AI companies. This further depicts economic inequality through job losses, even in arguably unethical manners, like ‘stealing’ people’s data. Hence, if AI policy serves corporate interests over the public good, innovation may increase as economic inequality worsens. Ultimately, political decision-making will determine whether AI will lead to a conflictual economic divide.
III. Market Manipulation: Corporate Lobbying
The rise of technology brings a new era of monopolies comparable to the past monopolies of the oil industry. Google: A powerful monopoly for online search. Amazon: controlling almost half of U.S. sales. How are the big tech companies able to maintain such unfair control of power? Corporate lobbying allows large companies to tailor economic policies to serve their main objective: maximising profit. In the tech realm, the big sharks, including Google, Apple, Meta, and Amazon, maintain dominance through monopolistic practices. As mentioned by a recent Harvard Law article, the U.S. Department of Justice has filed antitrust lawsuits against such major tech companies for harm to consumers and innovation. In addition, the European Union has attempted to curb this power through the Digital Markets Act (DMA), which seeks to impose strict regulations on Big Tech’s market dominance. The monopolistic practices of the large tech companies create great wealth inequality, thereby opposing a main macroeconomic objective of economics: economic equality. In response, the large tech companies have aggressively lobbied against antitrust regulations to maintain their market dominance. As stated in a report by Euronews, these companies collectively spend “over €100 million annually” on EU digital lobbying efforts. The big tech firms further engage in hidden lobbying to undermine the DMA. Ironically, the top digital companies defend by claiming to prioritise innovation. However, by practicing unfriendly market policies, the top firms are driving away competition, thereby reducing innovation and job opportunities and increasing wealth inequality. If left unregulated, tech corporate lobbying will continue to skew economic policies toward private profit rather than market efficiency, as occurred within the oil industry. Without political intervention, industries manipulate regulations to maintain their dominance, leaving smaller competitors, workers, and even consumers with little power in shaping economic outcomes.
IV. Conclusion: Why Economics Education Must Include Political Analysis
Economics often teaches models that assume rational markets and efficiency, but reality isn’t that simple. Economic decisions aren’t just shaped by supply and demand—they’re dictated by power, policies, and politics. Ignoring this creates a false sense of neutrality, making economic theories sound detached from the real world… Nowhere is this clearer than in the tech market. The companies controlling AI, automation, and data are actively tailoring government investments in their favour while lobbying against regulation controls. Society, dependent on the digital resources offered, is swayed by limited information and promises of innovation. Minor AI strikes and labour complaints will have little impact without direct government regulation. This has been experienced in the fossil fuel and oil industries, which spent decades delaying regulation and lobbying against green policies. Society grew reliant on oil and fossil fuels, creating obstacles to addressing climate change. Will the same pattern occur with AI and Big Tech? With proper government regulation that encourages innovation in an ethical manner, job losses, monopolised data, and digital inequality can be minimised. Accordingly, it is essential for economics education to include the political analyses that shape our digital future.
Further reading
https://www.ft.com/content/3e75c36e-d29e-40ca-b2f1-74320e6b781f
https://www.brookings.edu/articles/hollywood-writers-went-on-strike-to-protect-their-livelihoods-from-generative-ai-their-remarkable-victory-matters-for-all-workers/
https://www.vox.com/future-perfect/364384/its-practically-impossible-to-run-a-big-ai-company-ethically
https://hls.harvard.edu/today/antitrust-issues/
https://www.euronews.com/embed/2367772
UCL Rethinking Economics 