[Litmus2336]

How will an AI decide what the optimal allocation of food for the hungry is, how many computers everyone needs, and whether we should build basketball courts or if it's just a waste of time?

Those are all value judgements, and capital allocation is a value judgement too. I don't think an AI can optimally make decisions like that without the input of people. And an economy based on the input of people is still a free market. Perhaps with an AI in control and personal input we could make a much more democratic market though, which would be interesting.