Introduction

One of the biggest arguments against AI replacing jobs is that many people believe the government will protect them, or that society wouldn’t allow it. But the trend of the last quarter-century has been clear: unicorn companies are built specifically to make transactions more efficient by removing the human element. Amazon, Robotaxis, and apps like Uber Eats are valued so high because of the efficiency gain due to the absence of human interaction as a requirement for commerce.

We're seeing another trend too, where companies are downsizing their workforce. In 2024, a mid-sized IBM tech implementation team went from 10 consultants to under 5. Not because of layoffs, but because AI literally replaced half their team. The result was more output per head, but fewer heads. And because they didn't want to fire their consultants, hiring froze. Many people will understand that the 2024 job market slowdown may have been due to AI affecting hiring.

We are officially entering the fifth stage of economic development: past the agrarian economy, the industrial economy, the computer economy, and the digital economy. Now we are in the AI-Cybernetic economy, which might be the most disruptive to the human condition. The AI-Cybernetic Revolution is fundamentally different from the Industrial Revolution & Computer Revolution because it introduces a self-replicating, self-improving intelligence that does not rely on human labour or learning curves to evolve. While the Industrial Revolution mechanized physical labour and created massive employment opportunities through factories and infrastructure development, it still required humans at every level. We needed them for operation to innovation. In contrast, the AI-Cybernetic Revolution threatens to automate both mental and creative labor, making even high-skill professions potentially obsolete. AI can generate, manage, and scale knowledge work with minimal human intervention, bypassing the traditional flow of value from human input to economic output, as recently seen with MIT's SEAL algorithm, which can teach itself. Whereas the Industrial era expanded the role of labor, the AI era compresses it, creating growth without jobs. This shift could undermine the core logic of capitalism, which depends on wages fueling consumption. Free market capitalism faces unprecedented challenges.

As a first-year business student observing these trends, I offer this analysis not as definitive prediction, but as a framework for understanding what may be the most significant economic transition of our lifetimes. I welcome corrections and alternative perspectives.

It is essential to acknowledge, however, that AI is not the sole factor driving economic imbalance. Demographics, geopolitical tensions, and globalization inertia are also contributing forces. AI is simply accelerating these trends at breakneck speed, showing us that free market capitalism may no longer be the ideal system for efficiency. Let's try to understand how free market capitalism, the system we use to organize our social contracts, could fail.

There are two prongs which are affecting the fundamental rules of free market capitalism:

Firstly, the destruction of the flow of capital. Secondly, the destruction of services and manufacturing goods.

1. The Destruction of the Flow of Capital

First, AI may significantly reduce the flow of capital to workers by eliminating jobs, which in turn reduces consumer purchasing power due to lower income transfers from corporations to individuals. This could begin to break down the societal structure of employment. The issue is that it is happening so fast. Therefore, workers do not have a chance to upskill. For this reason, we’re seeing record unemployment in the world, despite record GDP growth.

According to IMF 2023 reports, many developing economies are experiencing "jobless growth," with productivity rising while employment stagnates or even goes down. In countries like India, while the economy has grown, employment per capita has declined. Because of rapid development, and also the fact that it's cheaper to import certain services, reemployment is not able to occur. This causes individuals to get stuck in generational poverty. Thus, the World Bank highlights a divergence between GDP and labour participation, especially in automation-prone sectors (World Bank, 2024). Meanwhile, OECD projections suggest major labor disruption in services and administrative roles by 2030 due to AI, with almost 27% of jobs being at high risk for automation. The highest risk appears to be in finance, which is a trade that can take many years to learn (OECD, 2023).

Of course, not all sectors are equally affected. Government, education, care work, and physical trades may experience slower transitions. However, the overwhelming trend remains: low-value labour is vanishing, and retraining efforts are not moving fast enough to compensate.

2. The overproduction of services and manufactured goods

Second, AI may soon have the capability to overproduce in the digital world, and eventually in the physical world. AI pushes the production possibilities frontier (PPF) past the consumption frontier (CPF). In plain terms, we may now be able to produce more than humans can earn enough to consume, or even have the time to consume.

This is already happening on the internet, where AI-generated services have started to outcompete human-generated services. Many human producers are being affected. This will likely affect other corporations too, bringing down the effective price for almost any service or good to dirt-cheap levels because of the sheer supply volume on the market. These tight margins could inspire firms to prioritize AI over hiring workers, who are expensive, leading to a self-reinforcing cycle of firings and efficiency gains. With bots able to scrape content, LLMs becoming accessible, fake voices becoming indistinguishable, and the ability to generate footage at scale, it is very possible that every service capable of being delivered online could one day be replaced by AI.

As for manufacturing goods, we’ve seen Optimus from Tesla walk, navigate, and even dance, and it would not be a stretch to imagine it soon beginning to manufacture. Musk himself suggested that androids might become the first 100 trillion dollar industry, precisely because they could take over almost any industry.

To summarize…

Despite more production, there is less money trickling down because occupations are being destroyed. According to the World Economic Forum's Future of Jobs Report 2023, an estimated 83 million jobs could be lost by 2027 due to technological transformation. The dataset covered 673 million jobs. This suggests that nearly 13% of the jobs that existed in 2023 might not exist by 2027. By the middle of 2025, this seems increasingly likely: the criteria for landing anything today feels much higher than it did two years ago. Less labour being needed, and perfect competition squeezing firms out of profit, are some of the biggest problems with AI.

But, which jobs will end up existing in the future?

It doesn't matter if we fight a war on AI or if we have a peaceful 21st century, because either way the winning side will likely be using AI. The general rule of thumb is this: the only remaining jobs may be those that manage AI or drive its progress. So basically, managers and researchers. We will likely need managers to ensure that AI stays aligned with the human race (so there isn’t an AI rebellion), and we will need researchers to help AI do more tasks, work more efficiently, and build technologies that keep it under human control. Every other job is at risk of being replaced eventually. The term “eventually” can mean one year from 2025 or fifty years from 2025, depending on the rate of technological progress. When people talk about jobs being replaced, the question shouldn't be "which" jobs will be replaced. It should be "when" the jobs will be replaced.

So then, how will the economy logically evolve?

Right now we are having a production boom. In North America, because AI can bring so much growth to an economy by stimulating foreign aggregate demand for its services, it's good for government tax revenue. During the initial growth of Agentic AI and androids, there will likely be no rules on them, as we've seen so far. Additionally, in a world with global bargaining, no nation can afford to fall behind by not implementing AI. In the initial years, like right now, we will likely see job losses, but the death of work is still far away. As replacement accelerates, though, people may begin to realize that they might not be safe. Social protests could begin springing up. Because this would be a protest to redistribute valid surplus wealth, and because consumer goods really are becoming cheap to manufacture, laws that simulate UBI or other income redistribution programs may be put into place. We might see technologies like socialist dividends come into play.

Governments may resist initially due to lobbying pressure or budget inertia, but the fiscal math of UBI becomes more compelling when corporate profits skyrocket and wages collapse. Early pilot programs in smaller nations will likely test this.

The reason why we may see UBI, and not something like Metropolis or Cyberpunk. This is because there is surplus (and it is sustainable surplus). I am assuming also that we will live in utopia like conditions is because generations of young people from Gen-X onward have been consistently educated under human-rights-based systems, and have been educated about the dystopias that could come. There is almost no school system in the western hemisphere that doesn't teach about human rights and social progress. They make you watch 2001: A Space Odyssey, read George Orwell, and understand what creates a dystopia in civics class. Lastly, the biggest reason why I am assuming we will have UBI is because there is no valid reason to oppress people, because we may soon have more than enough for everyone. Oppression in countries like the Soviet Union or monarchist France was due to these states using force to enforce inequalities because there wasn't enough for everyone, since we needed people working the fields and jobs which were considered undesirable. We all know that AI, and androids will be able to do that. Those jobs may be the first to go, actually.

The Age of AI Blocs and Techno-Autarky

Eventually, as AI accelerates production and reduces the need for global interdependence, the global economy will begin to fracture. We will likely see the slow de-globalization of trade, not because of political will alone, but because automation reduces the economic necessity of foreign labour. Why import what your domestic AI can produce better, faster, and cheaper?

Only critical resources, like rare earth minerals, semiconductors, and food or water in specific regions will remain the glue of geopolitical trade. The rest will be localized, or even completely internalized by sovereign AI production systems.

Economically, this could mean the rise of national techno-autarky. Countries may aim to become self-sufficient in algorithmic productivity and data sovereignty. Those who succeed may reduce dependency on volatile global markets, and may be able to control their supply and demand statistics for their domestic economy. Those who fail to build their national boundaries might become integrated into a greater whole. Because digital borders don't exist, youth from Mexico and Canada and Europe have made highly integrated social networks with the U.S, which is the global power. Because these economies are already highly integrated, and share similar values and have ruling elites who are allied to each other, it would not be a stretch to assume that the "West" will become a huge blob, with the U.S remaining the global hegemon. What is a nation except a collection of social networks? The reason why integration is possible, especially in the West, is due to the humanistic ideological mission which allows social democracies like Canada to function.

Thus, traditional economic theories built on the assumption of comparative advantage may collapse. What replaces them could be something new: economics of control, resilience, and sovereignty rather than economics of price and efficiency. Today with the power of our huge data centers and huge algorithmic machines, supply and demand can be predicted. Economics is the study of scarcity. Soon, we may need to study opulonomics, which is the study of abundance.

China and India are two of the other big AI power blocks that we may see in the future. Truly, we are entering an era with 3 or a few more fragmented AI economies, each optimized for national interest. The future will be a struggle for resources, rather than for export value. It is a return to the primal economy.

Prosperity is almost a given for a country, if they control the millions of different types of resources they need and have the human capital capabilities with humans and AI. It could be a return to feudal times. There might be AI technocrats controlling certain parts of national economies, in exchange for a loyalty to the state, which may have an AI scaled military.

Maybe the AI revolution may inspire us to look towards the stars, to feed our growing consumer good industries.

Conclusion: The Clock Is Ticking

The AI-Cybernetic economy is no longer theoretical. It’s not waiting for you, or anyone to catch up. The system of free market capitalism, based on human labour, wage-driven consumption, and competitive advantage, is being dismantled by a force more efficient, more scalable, and less dependent on us than ever before. Growth without jobs is the new economic normal.

Didn't I say though that utopia is inevitable? It definitely is. But there will be hardships along the way. The path to justice in any society requires members to be victims of injustice. This is why you need to be prepared.

This is a moment of reckoning. Waiting for governments or markets to act first is no longer a viable strategy. If you're a policymaker, it's time to draft radical new frameworks like UBI, AI dividends, or public ownership of AI corporations. If you're a worker or student, it's time to pivot hard. Either learn to build or manage AI. Or else, you'll be managed by it. And if you’re a thinker, a founder, or a leader: learn to make algorithms that redistribute power, not just capital.

The question is not whether change is coming. It is whether or not you will be crushed by the momentum of the change. We may have about a decade, maybe less. Act accordingly.

Acknowledgements

Acknowledging the assumptions behind this analysis, I aim to strengthen my credibility by making them explicit, grounded in current trends, and framed as projections rather than inevitabilities. Throughout the essay, I recognize the pace of AI development is not guaranteed, and the presence of black swan events. Still, the trajectory outlined is based on observable signals: from hiring freezes due to AI integration, to OECD and World Bank data on jobless growth, to the rise of autonomous AI agents in practical applications. Where necessary, I highlight alternate scenarios or constraints, allowing space for future correction without undermining the overarching vision. The biggest assumption is that technology will actually make the state stronger, rather than making it weaker, as highlighted and predicted in The Sovereign Individual.

Peter Thiel, co-founder of Palantir and a fervent supporter of The Sovereign Individual (he wrote the forward) is the best example of this shift. He has effectively built a private company that functions with the same intelligence and surveillance responsibilities as the CIA. While he philosophizes about the end of the state, his company is deeply embedded in the US government's defense infrastructure, and he is a part of the blob. Similarly, the EU’s AI Act puts sweeping restrictions on AI development, except for military use, retaining the state's monopoly on violence. This is a clear indication that the state is not surrendering power but selectively expanding it where sovereignty and security are concerned. It is very clear that AI is not going in a path of independence and freedom as Peter Thiel wrote, but rather, a path of state control.

Assumptions Underlying This Forecast

• AI will self-compound and exceed traditional automation, becoming a self-replicating labor and intelligence force.

• The state will become stronger, not weaker, due to AI centralization, regulatory necessity, and military adoption.

• Capitalist structures based on scarcity and wage labor will be destabilized because now we need societal structures based on abundance.

• Deglobalization will be accelerated, as AI enables domestic production and decreases dependency on human labor abroad.

• Technology is ultimately state-aligned, whether through funding or regulatory co-option, as demonstrated in AI development globally.

Extra:

And what does this mean for the human condition?

The human condition has been subjective and different depending on continent and country, and the AI-Cybernetic revolution will universalize what it truly is. What does it mean to be human? AI will allow everyone to truly live sustainably, and like they have everything in the world. There will be no starvation, we will have access to all the consumer goods we want, and the digital world will evolve along side it. It will be a fight for meaning rather than for scarcity.

Humans will still need work, because through doing and creating they will find fulfillment. But, work is no longer necessary. So what do we do?

The best alternative will be a gamified life. Our life will become increasingly gamified, with quests. They will function to work as a mechanism for redistributing currency. In blocs, humans will compete with each other, because of how natural competition comes to us. Your life may become like a video game.

But isn't that completely meaningless? Nothing you do matters anymore. You can have no impact on the world.

And you're not alone in feeling that. My next article is going to highlight what the solution is: it is psychology, the study of the psyche, and the integration of technology in making a new species of Human: Homo Cyberneticus. That is the only way we will be able to integrate with AI.

Jung described the world as having 16 different types. With gender, and using C.S Joseph's nurture system (Explosive & Implosive), we can get up to 128 individual personality types. As we begin to study cognition further, and break down cognitive functions further, we may get even more types. To move forward, we will need to understand ourselves more.

Stay tuned.

Works Cited

Economic Policy Institute. (2023, February). Unbalanced labor market power is what makes technology adoption disruptive. https://www.epi.org/blog/tech-adoption-and-labor-market-power/

Garfinkle, A. (2023, January 13). 90% of online content could be ‘generated by AI by 2025,’ expert says. Yahoo Finance. https://finance.yahoo.com/news/90-of-online-content-could-be-generated-by-ai-by-2025-expert-says-201023872

OECD. (2023, July 11). Employment outlook 2023: Artificial intelligence and the labour market. https://www.oecd.org/employment-outlook/2023/

Piketty, T. (2014). Capital in the twenty-first century. Harvard University Press. https://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Century

World Bank. (2024, September 26). Jobless development. Policy Research Working Paper No. 10928. https://openknowledge.worldbank.org/handle/10986/42204

World Economic Forum. (2023, April 30). The future of jobs report 2023. https://www.weforum.org/publications/the-future-of-jobs-report-2023/