Turn one: a company licenses AI to replace a significant portion of its workforce. Costs drop. Margins expand. The stock price goes up. Everyone on the earnings call is happy. When Block’s Jack Dorsey laid off nearly half his workforce in March, citing AI coding agents, investors responded with a twenty-five percent stock price surge in after-hours trading. The market rewarded the elimination of human labor with an immediate, massive transfer of value to shareholders. Turn two: the replaced workers stop earning income. They cut spending. The businesses they used to patronize see revenue decline. Some of those businesses also adopt AI to cut costs, compounding the displacement. Consumer demand contracts across the economy. 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.
Democratic governance rests on a bargain so old we’ve forgotten it’s a bargain at all. The governed have something the governors need: labor, tax revenue, military service, consumer spending. This dependency is the source of democratic leverage. The whole system functions because power is distributed, and it’s distributed because the people at the top need something from the people at the bottom. Remove labor from that equation and watch what happens.
When value is generated by AI systems owned by a handful of corporations already world-class at tax optimization, every fiscal mechanism of democratic governance starves at once. The tax base erodes. Collective bargaining becomes vestigial (employers who don’t need employees don’t bargain with them). Consumer spending, which depends on labor income, contracts. Piketty’s r > g, the engine of wealth concentration, accelerates because AI severs the last link between capital accumulation and the need for human labor as a production input. Without redistribution, as one analysis of the framework put it, “approximately everything will eventually belong to those who are wealthiest when the transition occurs.”
Autocracies are better customers for this technology than democracies, which is precisely why the broligarchy has rapidly shifted its support behind Trump and MAGA. A democratic government that deploys AI to replace its workforce faces electoral consequences. An authoritarian government faces no such constraint and gains a surveillance and control dividend on top of the economic efficiencies. Saudi Arabia, the UAE, Singapore: vast capital, centralized decision-making, no electorate to answer to, and an active interest in technologies of control. This is one of the motivating factors in the Valley’s latching on to Trump: he and his cronies can be bought, and as importantly, they have no loyalty to democracy. The economic incentives for AI companies point toward the entities with the fewest democratic accountability mechanisms.
Anthropic’s own research has documented something worse than displacement: active deskilling. Junior engineers who relied on AI coding agents didn’t complete tasks much faster and understood their work less when quizzed afterward. The technology is degrading the expertise of the next generation of workers at the same time it’s competing with them for their jobs. The retraining argument assumes people can develop new skills to stay relevant. The evidence suggests the tools are preventing them from developing skills at all.
The argument (that we should optimize for the welfare of trillions of hypothetical future beings, and that present-day costs are acceptable in service of that goal) is a framework any competent ethicist can dismantle in an afternoon. It has no limiting principle. It cannot distinguish between genuine moral urgency and the self-serving conclusion that whatever the speaker was already doing is cosmically important. In practice, it is a machine for generating justifications for the concentration of power by people who have decided they are the ones best positioned to steward the future of the species. How convenient.
Camus staked his intellectual legacy on the claim that the person standing in front of you is not an input to a utility function. Their suffering is not redeemed by a future state of affairs they may never see. Their dignity is not negotiable against projected outcomes. The person who exists now (who has a job they’re about to lose, a family they support, a community that depends on a functioning local economy) is the unit of account. Not humanity in the abstract. Not the trillions of future beings that the longtermists conjure to win their expected-value calculations. Once that commitment is abandoned, the door opens to every form of rationalized cruelty that the twentieth century spent a hundred million lives trying to teach us to reject.
The interventions that could matter are known. Public ownership stakes in AI infrastructure. Aggressive antitrust enforcement. A genuine tax regime on automated labor. Branko Milanovic’s prescription is characteristically direct: spread capital ownership more widely, tax the highest capital incomes more aggressively. None of these are technologically difficult. All of them require functioning democratic institutions with the will to challenge the richest companies in human history. The companies that would need to be taxed are spending millions to defeat the politicians who propose it.