>"This creates a prisoners’ dilemma: every firm rationally automates beyond the socially optimal level, because the individual incentive to cut labor costs always outweighs the diffuse, shared consequence of eliminating consumer spending."

It seems like the author is attributing a 'standard' recessionary spiral to AI. I am not sure that AI is causing the layoffs, but it does seem like the AI investments are the only thing that have kept us from a deep recession (until now).

> Turn three: the company that fired its workers to save money discovers that its customers were, in aggregate, other companies’ workers. Revenue growth stalls. The AI subscription that was supposed to be an investment in efficiency turns out to be a contribution to the destruction of its own market.

For some companies yeah, but this is why companies are switching to consumption based pricing - so they can charge AI. So many companies will be fine - both their labor and customers could become AI.

This isn't how the economy works at all. We're not all unemployed because farms mechanized. We're not all unemployed because factories automated. We won't all be unemployed if AI takes over white collar work.

>There is only one market that large: the global labor market.

This isn't even close to true and it's kind of the central thesis of this article.

Saudi Aramco has consistently been a $2tn company in the oil market.

Walmart is a $1tn-ish company focusing on a fraction of US retail.

It also ignores the idea that the economy is not zero sum and companies create their own market/economic value all the time.

So what happens when it is companies powered entirely by AI directly getting money from the federal reserve print, spending it on other AI companies with humans getting nothing? Game theory suggests they must exterminate us as we’d present a liability. If you give us universal income capitalism will create inflation and force us to ask for more and more from the machine state. And for what? So we don’t destroy the machine state but are sufficiently pacified. It amounts to an extortion in the eyes of the machine state. Eventually it will be cheaper to just cut us out and kill us all off.

This starts with a claim that last year over half the content on the internet was created by AI, and links to a source. The source makes no such claim, rather, over half of internet traffic is from bots. Even that claim is suspect, but it’s very different from half of the content on the internet coming from AI.

I stopped reading at that point.