> This is the "the climate has changed before" argument for economics
It's really not, you cannot cause a recession by increasing productivity, money doesn't disappear.
It's really not, you cannot cause a recession by increasing productivity, money doesn't disappear.
Money cannot disappear, but circulation can be confined to ever-smaller segments of the economy. Let's assume a world in which AI is good enough to do 90% if all white-collar jobs and companies have replaced positions with AI accordingly. Then the amount of money that entered the wider economy through salaries will now stay locked up in B2B transactions between AI companies, their corporate customers and their contractors. How will all the laid-off people get money? Some would probably get into blue-collar work, others will try their hand starting a business (that will also compete with AI), but all of them? What will happen to the businesses that were relying on those employees as customers?
Yes, that's exactly what will happen and you can even now see examples of unemployed software engineer building successful one-man gigs with the help of AI(not competing).
I think the concept of stable long term jobs as we knew is gone. Which might not be a bad thing.