Posted on 04/13/2026 5:47:47 PM PDT by ProtectOurFreedom
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. The resulting loss harms both workers and firm owners. More competition and "better" AI amplify the excess; wage adjustments and free entry cannot eliminate it. Neither can capital income taxes, worker equity participation, universal basic income, upskilling, or Coasian bargaining. Only a Pigouvian automation tax can. The results suggest that policy should address not only the aftermath of AI labor displacement but also the competitive incentives that drive it.
(Excerpt) Read more at x.com ...
If I may, off shoring basic industry wiped out the workers who bought product. When the guy on the line could no longer afford what he made, well, no need to make that anymore.
In the Great Depression too few dollars didn’t buy goods. Where did all the dollars go? Some say they were in the hands of the very few much like now.
I still have doubt AI is all many expect. Eventually it will be a mess of things of intended and unintended consequences. By the time of the fall there will be too few who know how to do to correct.
We are not good at thinking things through to see where they are going. Not all things that are possible are things we should do.
I submit we are already either overpopulated or underemployed with not enough meaningful jobs to provide actualization by any measure. It appears nearly half of people even in this allegedly successful country are incapable of even modest self-support. This would seem poised to get much worse. Sure, there will be those who are able to capitalize on new AI tech but they will be few and even wanting for customers who can afford their product. I am baffled that enough cam afford some of the trivialities offered even now. Door dash, Blue Apron, professional pet sitting, high price extended warranties, many luxury goods etc.
“...Salesforce replaced 4,000 customer support agents with AI...”
Something tells me that AI customer support will be worse than India call center customer support. (No accent tho.).
It is also similar to the inflation vortex of higher wages chasing ever higher prices and vice-versa. Hardly anyone gains a thing really in the long run.
A veteran of many extended treks, I simply walked,enjoyed the days and independent freedom of having all I needed on my back. Guess I misunderstood the objective.
Only one quarter to make this be look better, get a bonus and promotion then move on to flick up something else.
It is not just possible but probable I think.
“If the high tech workers are so smart, they will also find ways to survive, start businesses, etc.”
The problem is WAY bigger than that. This is about fundamentally restructuring the entire economy, not just high-tech workers. Anybody in any industry who uses a computer or phone screen will be affected. Low value-add jobs will completely disappear.
As long as the classic, “all-American” rules of the workplace apply, especially the coupling between accomplishments and rewards, I can see your point. The problem is, recent experience is driving more and more people to workplace cynicism.
Don’t have to, I am living it...
So, I guess the TPTB didn’t think to ask their vaunted AI about the disruptions that might occur if they laid off all of these people?
Interesting. Thanks.
Most companies are using AI as the excuse to lay off\fire employees but fact is they are getting rid of staff for the shareholders earnings..... Just greed more than anything.
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Public and private companies have created a huge amount of non-essential bloat to their bureaucracies over the last 50 years.
With a limited labor force to maintain and produce for our current level of civilization, the status quo can’t be maintained.
Incremental changes are happening and will become more apparent as we head towards 2030.
AI can’t do physical labor...yet. It’s fast at research but much of the research is flawed or is purposely flawed.
I mildly regret I never got around to driving over there to see the Georgia Guidestones - and pee on them.
🤷🏻
I could have done it in a day’s field trip.
And I tip my hat to those who bombed them.
“... turn Claude loose for ... coding ...”
Please give more detail on how it writes code.
I kind of long for days when we have to be self-supportive. When a bad storm comes in, I look forward to a multi-day power outage so we can do some urban camping and get a chance to actually use our survival skills.
Then we see the dependent class among us who couldn’t make it an extra day without some sort of services coming to their door to feed them. Door dash don’t work when the gas pumps are shut down and the restaurants are closed. You’re on your own.
Wow, where was the right wing defending manufacturing jobs when they were shipped out? Hypocrites.
The reason the USA is in debt is because trillions of dollars of lost wages went with the jobs and the govt made up the difference buy printing money.
The model for that was the deindustrialization, offshoring of industry and blue collar jobs that could support a family. Now in addition to H visa replacement the white collar workers face AI replacement. A brave new world.
Ridiculous
Senator rictus puss stolen valor blumenthal is a huge fan of Pigou. It’s all you need to know about this so called sin tax.
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