armcat3d ago

The AI Layoff Trap

https://arxiv.org/abs/2603.20617

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 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.

arXiv.org
Show threaddrivebyhooting

The trick is bypassing the human consumer as well.
Companies satisfy (human) consumer needs as a byproduct of profit maximization. But human consumers are inefficient. They have to sleep, require medical care, etc.

A purely machine economy would be far more efficient. Therefore in the limit we should eliminate reliance on human labor and consumption to build a more perfect and efficient world.

Apr 13 at 6:34amWeb
Show threadpaulpauper3d ago
The "economy on a chip" thought experiment .
Show threadsamrus3d ago
The humans consume to fulfill needs, how do those needs get fulfilled in a post human economy?
Show threadexitb3d ago
Having large amounts of people with unfulfilled needs is not exactly a novel idea.
Show threadithkuil3d ago

Just train machines on the huge corpus of human needs so they can need things like no human has needed things before.

What can possibly go wrong

Show threadtonyedgecombe3d ago

>The humans consume to fulfill needs

That's not how the capital class thinks of human consumption.

Show threadgiacomoforte3d ago
You jest, but isn't this the logical conclusion? A sufficiently smart AGI has no need for humanity, at all.
Show threadleokennis3d ago

Idea! Maybe these now redundant humans can be turned into a kind of battery, so they serve as a source of energy for the machines?

Perhaps it's then smart to make the humans have a brain/computer interface, to make then dream/think they are living in a normal society so they don't revolt.

Show threadtreetalker3d ago

Agents everywhere!!

Do you like what I've done with the place?