Is AI the nail in the coffin of capitalism? Saturated markets cannot absorb more goods, and companies cannot grow indefinitely in a world of constrained resources and population. At the same time, with the rise of automation, a handful of skilled individuals with computers can achieve what once required large organizations.
If people don’t work, who will buy?
“If AI displaces human workers faster than the economy can reabsorb them, it risks eroding the very consumer demand firms depend on. We show that knowing this is not enough for firms to stop it. In a competitive task-based model, demand externalities trap rational firms in an automation arms race, displacing workers well beyond what is collectively optimal.”
arXiv.org
The AI Layoff Trap
If AI displaces human workers faster than the economy can reabsorb them, it risks eroding the very consumer demand firms depend on. We show that kn...