AI will destroy economy as we know it

I've been thinking about AI taking jobs a lot recently.

Obviously, I'm a developer, so the first thing I think about is coding.

AI is getting ridiculously good at it. Maybe it doesn't replace every developer, but honestly it doesn't even need to.

If a company needed 10 developers before and now 2 developers with AI can do the same amount of work, what happens to the other 8?

People usually say they'll just learn something else.

Okay.

What?

That's the part I keep getting stuck on.

Because coding isn't the only thing AI is getting good at.

Digital marketing? AI.

Graphic design? AI.

Photoshop? AI.

Video editing? AI.

Writing? AI.

Customer support? AI.

Accounting work? Probably a lot of it.

Basically anything where your entire job happens on a computer seems like it can eventually be done by AI because AI itself operates in the same environment.

And maybe none of these jobs completely disappear.

There will probably still be developers.

There will probably still be designers.

There will probably still be marketers.

But that's not really the point.

If 10 people used to be required and now you need 2, you still have 8 people looking for something else to do.

And this happens everywhere at the same time.

That's what scares me.

So everyone switches careers?

Let's say millions of people working digital jobs start realizing this.

They're obviously not going to sit there doing nothing.

They'll move into whatever seems safer.

Maybe law.

CA.

CS.

Finance.

Consulting.

Whatever still seems like it requires a human.

But now another problem starts.

If everyone is moving into those professions, suddenly there are way more people competing for the same jobs.

Even if AI never replaces lawyers, imagine the number of people trying to become lawyers doubles or triples because their previous careers stopped making sense.

The supply of workers goes up.

Does the demand go up equally?

Probably not.

So salaries start getting pushed down.

And even these professions aren't exactly safe.

A lawyer does a lot of reading, research and drafting.

A CA deals with huge amounts of information and documents.

These are exactly the things AI is getting good at.

Maybe you still need the actual lawyer or CA to verify everything and take responsibility.

But again, what if one lawyer with AI can do the work five lawyers used to do?

We're back to the same problem.

Fine. Do something physical.

This is probably where the argument eventually goes.

Become a plumber.

Become an electrician.

Become a mechanic.

Do construction.

Do something AI physically cannot do.

And actually, I think these jobs are safer for quite some time.

It's one thing for an AI to generate a React component.

It's another thing entirely for a robot to come to my house, figure out why some random pipe is leaking, open everything up, realize somebody did some weird jugaad 15 years ago, find the correct part and fix it.

The physical world is messy.

But then I start thinking about the same problem again.

If huge numbers of people lose digital jobs and physical jobs are the remaining option, won't those jobs also get flooded with people?

Obviously not every software developer is going to become a plumber.

But people have to do something.

And if the supply of labour keeps increasing in whatever professions are left, wages there get pressured too.

Then eventually robotics gets better.

Maybe that takes 10 years.

Maybe 30.

Maybe much longer.

I have no idea.

But if robots eventually become cheap and capable enough, even that wall starts disappearing.

And this is where I don't understand what happens to the economy anymore.

Because who is buying everything?

Let's take the extreme case.

Companies automate everything because obviously they would.

Why wouldn't they?

If I run a company and AI lets me produce the same output with 20 employees instead of 100, that's an insane advantage.

My competitor will do it.

So I have to do it too.

Now repeat that across the economy.

Companies become insanely productive.

Costs go down.

Profits might go up.

We can produce more things than ever before.

Amazing.

Except...

Who is buying them?

The 80 people I removed weren't just employees.

They were customers somewhere else.

They bought phones.

Food.

Cars.

Subscriptions.

Houses.

Clothes.

Games.

Flights.

Everything.

If enough people stop earning money, they stop spending money.

If they stop spending money, businesses lose customers.

Then businesses make less money.

Then they cut more costs.

Which probably means even fewer employees.

That's the loop I keep thinking about.

You can't have companies producing infinite amounts of stuff while nobody has money to buy any of it.

At some point the problem isn't unemployment anymore.

The problem is that our entire system assumes people work to earn money and then use that money to consume things.

What happens if the work part is no longer necessary?

Maybe the system itself changes

This is where things like UBI suddenly stop sounding like random futuristic ideas.

I'm not saying UBI is the answer. I genuinely don't know.

But governments aren't going to casually watch some enormous percentage of their population become unemployed.

Imagine what happens politically.

People have loans.

Rent.

Families.

Food expenses.

And more importantly, angry unemployed people aren't exactly something governments want.

Something would have to change.

Maybe people get some kind of basic income.

Maybe companies get taxed differently.

Maybe working 40 hours a week stops being normal.

Maybe ownership becomes much more important than labour.

Maybe entirely new industries appear.

Maybe there's some economic model we haven't even thought about yet.

I don't know.

That's the weird thing.

We're building the technology faster than we're figuring out what society looks like if it actually works.

Of course, I could be completely wrong

There's another side to this.

Maybe AI makes things so cheap that we just start doing way more things.

If software that costs ₹50 lakh to build today costs ₹5 lakh with AI, suddenly way more businesses can afford custom software.

If it becomes ₹50,000, even tiny businesses can have software built specifically for them.

So maybe instead of needing fewer developers, we just build 100x more software.

Same with videos.

Games.

Design.

Research.

Education.

Maybe entirely new markets appear because things that were previously too expensive suddenly cost almost nothing.

We've seen this happen before.

Computers didn't just make existing calculations cheaper.

They created things that basically didn't exist before.

The internet did the same thing.

Maybe AI does that on an even bigger scale.

But I don't know whether new demand grows faster than AI improves productivity.

That's the part nobody can really answer.

And this is why I'm not convinced by “AI will create new jobs”

Maybe it will.

It probably will create jobs we haven't thought of.

But whenever I hear this, I think about one thing.

Previous machines replaced things humans did.

AI is trying to replace the thing humans use to learn new things.

Intelligence.

If a machine replaces my current task, I can learn another task.

But what if the machine can learn that task too?

Where exactly am I supposed to keep moving?

And if robotics eventually solves the physical side as well, then what exactly is the economic value of human labour?

Maybe there still is plenty.

Maybe humans will always want other humans involved.

Maybe AI hits some massive wall.

Maybe regulation slows everything down.

Maybe I'm thinking way too far ahead.

Again, I don't know.

So what am I doing about it?

For a while my reaction was basically:

Fuck, what career is safe then?

But I'm starting to think that's the wrong question.

If AI becomes good enough that being a developer is completely useless, switching to digital marketing isn't saving me.

Neither is Photoshop.

And if it becomes good enough to replace lawyers, accountants, engineers and everything else too, I probably wasn't going to find some magical profession at 23 that would protect me for the next 50 years anyway.

So the best thing I can think of is to own things.

Own products.

Own businesses.

Own equity.

Own investments.

And learn how to use AI instead of trying to compete with it.

Because if AI makes one person capable of doing what ten people used to do, I would much rather try to become that one person.

And if labour really does become less valuable over time, I don't want my entire life to depend on selling my labour.

I don't know whether any of this actually happens.

Maybe 20 years from now I'll read this and laugh at how much I overthought it.

I hope I do.

But right now I don't think the interesting question is:

“Will AI take my job?”

I think it's:

If AI eventually makes most human labour unnecessary, what happens to an economy where almost everyone needs to sell their labour to survive?