Stu on Nostr: I’m not sure I follow? If fewer people are employed because of AI, economic demand ...
I’m not sure I follow?
If fewer people are employed because of AI, economic demand will fall and the economy will shrink.
The economy is not merely about economic supply, if AI boosts our ability to produce things but reduces the flow of capital to consumers then it will lead to a smaller economy.
Because in order to transact, any seller needs a buyer.
In a capitalist system, it is the consumer who is the engine of the economy. Frivolous consumption and high monetary velocity consumers are the foundation of a strong economy. Strip those consumers of their buying power and you quickly grind to a standstill. It doesn’t matter what you can supply. It doesn’t matter if your productivity balloons, you cannot economically produce more than your consumers can consume.
If fewer people are employed because of AI, economic demand will fall and the economy will shrink.
The economy is not merely about economic supply, if AI boosts our ability to produce things but reduces the flow of capital to consumers then it will lead to a smaller economy.
Because in order to transact, any seller needs a buyer.
In a capitalist system, it is the consumer who is the engine of the economy. Frivolous consumption and high monetary velocity consumers are the foundation of a strong economy. Strip those consumers of their buying power and you quickly grind to a standstill. It doesn’t matter what you can supply. It doesn’t matter if your productivity balloons, you cannot economically produce more than your consumers can consume.