Well-written; seems like an expanded and more detailed version of the Twitter essay that made the rounds a couple weeks ago.
One thing this piece doesn't contemplate is deflation. Competition will still exist in this world; if friction decreases and renders switching costs lower for a wider variety of industries, while AI efficiencies improve margins, prices in those markets will be competed down to a substantially lower marginal cost floor.
In other words, people may make less money, but goods in industries which benefit from AI should become cheaper in a growing set of competitive markets. The magnitude of the impact on prices should correlate with the magnitude of the employment impact; the better AI is at taking our jobs, the cheaper prices should get for an ever wider basket of goods.
One thing this piece doesn't contemplate is deflation. Competition will still exist in this world; if friction decreases and renders switching costs lower for a wider variety of industries, while AI efficiencies improve margins, prices in those markets will be competed down to a substantially lower marginal cost floor.
In other words, people may make less money, but goods in industries which benefit from AI should become cheaper in a growing set of competitive markets. The magnitude of the impact on prices should correlate with the magnitude of the employment impact; the better AI is at taking our jobs, the cheaper prices should get for an ever wider basket of goods.