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.
More from AGI Musings
- Can closed frontier models support CBRN defense, or do we need open ones too? — olcan · 2026-07-27
- Steven Pinker says intelligence is bounded, not a limitless scalar like height — SydSteyerhart · 2026-07-27
- A poster imagines AI evolving into synthetic, collective, and beyond-intelligence systems — CurieuxExplorer · 2026-07-27
- AI surpassing human intelligence will be noticeable, as Claude's cryptic output proves — zetalyrae · 2026-07-27
- AI lab staff have gone strangely quiet about next-year capability predictions — ChrisGPT · 2026-07-27
- AI could erode science by flooding research with credible slop — rbhar90 · 2026-07-27