Economic Thought Experiment on AI-Driven Layoffs
gabriel1 · x · 2026-07-05
The author proposes a thought experiment: a 10-person company uses AI to double efficiency, lays off 5 people, and doubles its profit. The newly freed market space attracts a competitor, Company B, which hires those 5 workers. The result is full employment, and price competition between the two companies makes the world better off. In a follow-up, the author notes that in reality, companies often train employees to do more with AI, meaning the worst-case scenario isn't actually bad for anyone.
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