Post-Labor Economics Lecture 01 - "Better, Faster, Cheaper, Safer" (2025 update)

Summary

David Shapiro's lecture on post-labor economics delves into the anticipated paradigm where humans are no longer the primary labor force. This shift stems from advancements in automation and AI, triggering a slow displacement of human jobs. As technology surpasses human capabilities in myriad ways – becoming better, faster, cheaper, and safer – economic dynamics are poised for disruption. Shapiro discusses the implications on demand and supply sides of labor, the dissolution of social contracts tied to labor, and the paradox businesses face between cutting costs and maintaining consumer power. The lecture also touches on the economic and social shifts anticipated in governments, banks, and businesses as they adapt to these changes. In essence, post-labor economics will redefine how societies function, emphasizing ownership over traditional wage labor.

Highlights

• The lecture sets a foundation for post-labor economics in the age of AI. 🤖
• Human labor detachment from economic productivity is becoming a reality. 🏭
• Post-labor paradigms emphasize ownership rather than traditional employment. 🚀
• Social and economic structures face change, with governments and banks playing pivotal roles. 🏦
• Future employment may focus on jobs where human connection and authenticity are preferred. ❤️

Key Takeaways

• Automation disruption is inevitable as machines become better, faster, cheaper, and safer. 🤖
• Post-labor economics signifies a shift away from human labor as a primary economic force. 💡
• Human jobs will persist mostly where there is a demand for other humans despite robotic alternatives. 👥
• Governments, banks, and businesses must adapt to new economic paradigms driven by AI and automation. 📈
• Economic agency is shifting from wage-based to ownership-based models. 🏠

Overview

David Shapiro kicks off his lecture with a thought-provoking assertion—human labor, as we know it, is facing obsolescence. This isn't a story about doom and gloom, however. It's about preparing for a future where automation and AI have displaced many traditional roles, radically reshaping our economic landscape. Imagine a world where machines don't just assist us, but outperform us in role after role, from janitorial work to expert knowledge jobs—all while being more efficient, more cost-effective, and safer.

The narrative is easygoing yet serious, touching upon major transformations on how economies function without us in the labor force. Shapiro invites us to explore 'better, faster, cheaper, safer' as the mantra for inevitable change. As machines cross these thresholds, companies face a paradox: reducing labor costs while preserving consumer purchasing power. He details how job markets are evolving, with some roles remaining due to the intrinsic human touch they provide.

Governments, financial institutions, and businesses are called upon to rethink and redefine their roles in a world governed more by ownership than by employment. As automation marches on, the critical question becomes: who owns the machines? Shapiro urges an exploration of new frameworks where economic agency could pivot from wages to ownership—a call for societies to innovate socially as much as technologically. The seeds planted in this first lecture promise a deep dive into the heart of future economic systems.

Chapters

• 00:00 - 00:30: Introduction to Post-Labor Economics The chapter introduces the lecture series on post-labor economics, highlighting that it will be a four-part series exploring the contemporary state of post-labor economic theory as of 2025. This series is the culmination of years of research. The first lecture, titled 'Better, Faster, Cheaper, Safer: Why Human Labor Will Go Away,' is set to explain the reasons behind the diminishing need for human labor.
• 00:30 - 01:00: Definition and Introduction to Post-Labor Economics Post-labor economics is an anticipated economic model where wages exchanged for labor will no longer be the primary economic driver. A key concept is the decoupling of labor from economic productivity, facilitated by advancements in artificial intelligence and robotics that decrease the demand for human labor. This paradigm shift indicates a future where traditional labor plays a reduced role in the economy.
• 01:00 - 03:00: Automation Displacement and Economic Decoupling The chapter discusses the concept of automation displacement within the framework of post-labor economic theory. It starts by explaining the process of creative destruction or labor substitution, whereby advanced technological systems will replace the majority of human workers. This is especially impactful on knowledge workers, skilled blue-collar workers, and unskilled labor alike. From janitors to steel mill workers, to lawyers—all these roles may face displacement due to automation.
• 03:00 - 04:00: Social Contract Breakdown and New Paradigms In this chapter titled 'Social Contract Breakdown and New Paradigms', the focus is on the evolving economic landscape due to technological advancement. It discusses how tasks traditionally done by humans, especially in areas like accounting, might not have a fundamental requirement for human involvement if machines can accomplish them. This leads to the concept of 'economic decoupling'. Economic decoupling refers to the phenomenon where GDP growth and economic productivity can continue or even accelerate independently of human labor or the input of human expertise. Essentially, it explores the notion of a future where the role of human labor and capital is increasingly diminished in the face of advancing automation and technology.
• 04:00 - 05:00: Aggregate Demand Challenge The chapter titled 'Aggregate Demand Challenge' discusses the transformation of economies that have transitioned to a post-labor paradigm, emphasizing the role of automation. In this context, automation is defined broadly, encompassing various technologies from household robotic devices like Roombas to industrial robots and AI agents, including humanoid robots. The chapter suggests that with such advancements, traditional economic constraints, particularly those related to labor, will no longer hinder economic growth.
• 05:00 - 08:00: Better, Faster, Cheaper, Safer Criteria The chapter discusses the potential of technologies to disrupt human labor, focusing on 'Better, Faster, Cheaper, Safer' criteria. It outlines a chain of consequences beginning with automation displacing human labor, leading to economic decoupling, and ultimately culminating in the breakdown of the social contract, where the fundamental principles of wage labor are rendered obsolete.
• 08:00 - 12:00: Human Labor Attributes and AI Advancements The chapter discusses the interplay between human labor attributes and advancements in artificial intelligence. It begins by addressing the concept of the right to work within liberal democracies, emphasizing the absence of restrictive caste or class systems governing job eligibility. This sets the stage for exploring how intelligent machine economies might reshape these traditional labor dynamics.
• 12:00 - 16:00: Labor Demand Side and Human Employment The chapter discusses labor rights, specifically the concept of the 'right to work', which allows for hiring and firing at will. Despite having rights, employment depends on hiring, and companies might prefer robots over human workers. The need for new paradigms in a post-labor world is also addressed.
• 16:00 - 19:00: Lump of Labor Fallacy and Infinite Human Demand This chapter explores the 'Lump of Labor Fallacy' and the concept of infinite human demand. It investigates the economic challenges posed by automation, particularly regarding employment and aggregate demand. The chapter highlights the potential consequences of increased automation: as jobs disappear, wages drop, and subsequently, aggregate demand reduces. Such a scenario could lead to a failure of current consumer-based market systems, which are dependent on traditional employment-based purchasing power. Essentially, it underscores the problem that arises when unemployment becomes too high, impacting the economy's capability to maintain demand.
• 19:00 - 22:00: Automation Ownership and Wage Labor Breakdown The chapter titled 'Automation Ownership and Wage Labor Breakdown' delves into the economic implications of automation and AI replacing human labor. It raises the issue of who will purchase goods and services if automation leads to widespread unemployment. The chapter suggests that as machines become better, faster, cheaper, and safer, the economic forces will drive the replacement of human workers, making it an inevitable outcome of technological advancement.
• 22:00 - 25:00: Businesses' Perspective on Automation The chapter discusses the inevitability of machines taking over jobs traditionally done by humans when they become more efficient, cost-effective, and safer. An example provided is the transition from manual labor with pickaxes to using steam shovels and eventually to self-driving steam shovels. The implication is a shift in how businesses view automation, prioritizing economic rationality over human employment in specific roles.
• 25:00 - 30:00: Consumer and Government Perspective on Post-Labor Economics The chapter explores the impact of automation on the labor force, particularly focusing on low-skilled workers. The transition from manual labor to automated machinery like excavators exemplifies this shift. Automation is deemed advantageous when it results in outputs that significantly outperform human efforts, delivering superior quality, durability, and precision. However, it is acknowledged that only the very top professionals in a field may match or exceed such outputs.
• 30:00 - 35:00: Bank Perspective and Economic Agencies The chapter discusses the advancements in AI models, highlighting their exceptional performance in code challenges, outperforming 90% of human coders. It anticipates further improvements, predicting AI models to reach the 99th percentile in coding tasks by 2025 or 2026, potentially becoming the best in the world. The chapter also hints at broader implications, such as AI integrated into robots, though it cuts off before delving into details about AI in construction or housing.
• 35:00 - 36:00: Conclusion and Preview of Episode 2 In the conclusion of Episode 1 and preview of Episode 2, the focus is on the advantages of automation over human labor. Key points highlight that while humans might cut corners, robots do not unless programmed to do so. Automation offers speed, completing tasks much quicker than humans, translating time into cost savings. The concluding remarks emphasize that automation is not only faster but also cheaper, affecting the bottom line positively. The discussion sets up expectations for Episode 2 to delve deeper into these themes.

Post-Labor Economics Lecture 01 - "Better, Faster, Cheaper, Safer" (2025 update) Transcription

• 00:00 - 00:30 Welcome to my lecture series on post-labor economics. This will be a four-part series in which I will uncover and uh explain post-labor economic theory as it stands today 2025. It will be updated in the future, but this is basically the culmination of the past 2 or 3 years worth of work. So with all that being said, let's get into it. Uh lecture number one is better, faster, cheaper, safer. Why human labor will go away. First and foremost, what is post-labor
• 00:30 - 01:00 economics? Uh, plain and simple, post labor economics represents the anticipated economic paradigm where the exchange of wages for labor is no longer the primary driver of the economy. One of the ways that you can think about this is a decoupling. If artificial intelligence and robots continue a pace, basically if they continue advancing at the rate that they are, we can expect that the uh that the component of demand for human labor will actually go down as part of the economy. Uh in short, labor
• 01:00 - 01:30 substitution will happen. So let's get into uh some of the primary criterias of post-labor economic theory. First and foremost, automation displacement. So this is basically the process of creative creative destruction or labor substitution whereby uh advanced systems will replace the majority of human workers uh in particular knowledge workers and skilled blue bluecollar workers uh will will all go away and unskilled labor. So anything from janitors to steel mills to lawyers and
• 01:30 - 02:00 accountants. there's not really any first principles view in terms of like there's no physical reason that you actually need a human to do that if a machine is capable of doing it. Um so then what leads what what the the first order consequence of that is what we call economic decoupling which is that GDP growth and economic productivity will continue or accelerate while becoming increasingly detached from human labor or expertise inputs. uh meaning that human labor, human capital
• 02:00 - 02:30 will no longer be a bottleneck or even a primary consideration in the growth of economies that have adopted a post-labor economic paradigm and have achieved that level of automation. Um just as a quick uh aside if I use the word automation, automation is all automation. And that's anything from uh Roomba robots and industrial robot arms to artificial intelligence agents uh humanoid robots and that sort of thing. So automation is
• 02:30 - 03:00 the superset category of all technologies that are capable of disrupting the need for human labor. the next order consequence. So if these first two things happen, automation displacement happens or labor substitution happens followed by an economic decoupling the the second order consequence is social contract breakdown. The fundamental wage labor social contract collapses when even uh when even the theoretical right to work becomes meaningless in a super
• 03:00 - 03:30 intelligent machine economy. So what this means is that uh you have a one of the fundamental social contracts of of liberal democracies is the concept of the right to work. You have the privilege uh to work for any company that will hire you or anyone else who wants to hire you. We don't have a cast system that says you can't do these jobs. We don't have a class system that says you're not allowed to be president or whatever. Like if as long as you are qualified, you can do any job. um anyone
• 03:30 - 04:00 can hire you and fire you at any time. So that's what that's what we mean by a right to work. Those are or labor labor rights. Um however, even if you have the hypothetical right to work, if no one hires you, it doesn't matter because when you think about it from a company's perspective, the company is going to prefer to hire robots rather than you. And we'll get into that later in this lesson. Um so then the next up is we're going to have to come up with new paradigms and that is post labor. Um then the final component is aggregate
• 04:00 - 04:30 demand challenge. So this is where uh from the perspective of economists or the state or macroeconomists the biggest problem is that if wage if if jobs go away, wages drop, aggregate demand drops. So current consumer-based market systems may fail when automation boosts productivity but traditional employmentbased purchasing power disappears. So that's what when I say demand or aggregate demand, that's what I mean. Basically, if unemployment gets too high, so TLDDR, unemployment gets
• 04:30 - 05:00 too high, nobody is spending any money. Therefore, who's going to even pay for the goods and services produced by AI and robots? So, there you go. That's post labor economics at a 30,000 foot view. Now, better, faster, cheaper, safer. Uh once machines cross these performance barriers, economic forces make the replacement of human workers not just possible, but inevitable. So this is whenever you look across uh history, as
• 05:00 - 05:30 soon as a machine or an alternative is better, faster, cheaper, and safer than humans, it becomes economically irrational to have humans still doing that job. So I just saw on Twitter before I hit record, someone was talking about, oh yeah, but but what about steam shovels, right? Innovation and and steam shovels. And you know, it's like, well, yeah, we use steam shovels because that was better, faster, cheaper, and safer than humans with pickaxes and shovels, right? That's why we use heavy equipment. But what happens when the steam shovel drives itself? You don't need a human driver, right? So then
• 05:30 - 06:00 you've replaced hundreds and hundreds of of low-skilled workers with peaxes and shovels with a single, you know, automated excavator. So better uh this criteria is is defined as when automation delivers measurably superior outputs compared to humans, producing higher quality code, more durable structures, and more precise designs. Uh so basically it's just it produces output better than what most humans can do. um except maybe the top humans in their field. Um and at the time of recording, many of the be many of the
• 06:00 - 06:30 latest AI models are in the 90 plus percentile of code challenges. Meaning that for any given uh coding task, they produce better code than 90% of human coders. Um and by the time you watch this later in 2025 or 2026, it'll probably be the 99th percentile. Um or literally the best in the world. And that's just one example. Um, once the once the AI is is in robots, I don't know if you've ever had a house built or or lived in a house that was built by
• 06:30 - 07:00 humans. Humans cut corners. Um, robots don't cut corners unless you tell them to. Um, next is faster. This is just time. Um, if it if if automation completes the task in a fraction of the time that humans do it, time is money. It's that simple. Um, if they are better and faster and everything else, there you go. And then cheaper. Um, this is another this is this also goes to the bottom line. Faster time is money. But cheaper is just what is the total amount
• 07:00 - 07:30 of money that you put into it. If if hiring a robot to do the same job that a human does is five times less or 10 times less or 100 times less, guess what? If you as a business owner have a finite amount of money to spend, you're going to go with the cheapest option that you have. So then when you combine the fact that that that cheaper option is also better and faster, guess what? it becomes completely irrational to hire a human if you have the option of hiring some kind of automation whether it's an agent or a humanoid robot or whatever and then safer. This is for regulatory
• 07:30 - 08:00 and legal purposes. One of the biggest one of the biggest pieces of friction for why Fortune 500 companies won't uh adopt AI and robots as quickly as as we might like is safety is legal liability is uh loss prevention risk control those sorts of things. Um however when you look at self-driving cars both Tesla and Whimo have fewer fatal accidents per rider mile than human drivers sometimes by a factor of 10 or more. So they're
• 08:00 - 08:30 already safer, but they can't handle every single edge case and so on and so forth. Anyways, so the mantra is better, faster, cheaper, safer. Anytime a machine is crosses those uh four, excuse me, those four criteria, labor substitution becomes inevitable. So labor substitution is where you take a human and you say we're not going to use human labor, we're going to use a machine instead. So that's labor substitution. Creative destruction is a broader term that focuses on when you
• 08:30 - 09:00 basically destroy an entire industry with a new technology. Um so the automobile destroyed the horse industry for instance. Um that's a useful shortorthhand. All right, moving on. Now when you think about okay well what what is it that a human is selling? When you're selling your labor whether it's physical labor or knowledge work or whatever there are four basic like fundamental attributes that you're selling. And if this looks like a D&D character sheet, that's kind of kind of what it is. So you've got strength,
• 09:00 - 09:30 you've got dex, you've got int, and then you've got charisma or wisdom, right? You could add wisdom in here, but strength, dexterity, cognition, and empathy. So basically, when you look at all the trends, advanced AI and robotics are are rapidly surpassing humans across all domains of productive capability. This is looking at the labor supply side. So on the labor supply side, human strength was replaced a long time ago. It was replaced by steam. It was replaced by diesel. It's been replaced by electric motors and batteries. Um so
• 09:30 - 10:00 human strength is already obsolete. Um so you you know when you when you think about like oh using your muscles it's like yeah technically like construction workers use their muscles. Um, but there, you know, that's more a dexterity thing because holding up a beam and using a drill, that's more of a dexterity task, which is which is uh precision rather than bulk strength. It's not a human out there with a shovel digging the foundation. It's not a human
• 10:00 - 10:30 out there with a a a pack of bricks on his back delivering the bricks for the foundation. Those are all done by machines. So like yes, human strength is still partially relevant, but the majority of calories expended on moving heavy stuff is machines, trains, planes, boats, um you know, we're not using carts and wagons to move stuff anywhere everywhere all the time. We have forklifts, uh those sorts of things. Um dexterity. Dexterity is this is high precision stuff. So this is uh fixing
• 10:30 - 11:00 plumbing, wiring, um using drills and hammers and those sorts of things that require uh the application of physical force but with higher precision um and balance and in chaotic environments. Dexterity is is the next frontier where robots are coming. Robots are already stronger than humans. They're just not quite as dextrous. But if you look at the latest research what's coming out um from pretty much everyone working on robots, the dexterity is coming. Um so
• 11:00 - 11:30 then it's just a matter of fixing the dexterity and scaling up. Next is cognition. So this is the key attribute underpinning all knowledge work uh including STEM, medicine, diplomacy, everything. Um so human intelligence this is this is a quotation from Jeffrey Hinton. Previous uh industrial revolutions made human strength irrelevant. This revolution will make human intelligence irrelevant. Um so basically cognition is going to go the way of strength. Meaning that even
• 11:30 - 12:00 though humans are smart because that this doesn't mean that humans are going to get dumb. It just means that comparatively speaking artificial intelligence will be way smarter than any of us at any given job. So therefore, you know, on the labor supply side, as long as you are more intelligent than a machine, there are things that you can offer a company that the machine can't. But as soon as that flips and it's going to be, you know, like there's going to be a threshold and it's like, okay, the machine is now smarter than you. you don't have anything that you can intellectually offer the company. Empathy or charisma
• 12:00 - 12:30 uh might be the final frontier of human comparative advantage because of authenticity. And this honestly just comes down to demand side which we'll talk about in a minute. But basically sometimes humans will just prefer humans for biological reasons, for evolutionary reasons, for psychological reasons, whatever. It doesn't have to be economically rational. It just says I have a preference and I'm willing to pay extra for a human. Um, so this is all on the labor supply side. So these are the four car four categories of labor supply
• 12:30 - 13:00 and you can track these and I know many of you are saying AI is already more empathetic. I use chat GPT for a therapist. That proves my point is that on the labor supply side, humans might not have much to offer soon. Now on the labor demand side, so there's always two sides to any market. There's supply and demand. Whether you're selling goods, there's, you know, how much wood can you sell and how much how much wood do people want to buy? And then on the services side, you can you might be a massage therapist. So, it's like how how many massage therapists are there versus
• 13:00 - 13:30 how many how much demand is there for massage therapists. So, there's always supply and demand on and in a in a labor market, the labor demand side is where we can look at saying, hey, what kinds of jobs are going to stick around? So in a post- labor economy, human employment persists only where humans specifically demand other humans. And demand is an economic term basically saying I I demand that I want a human for this. Not like, you know, pitchforks, but like I'm willing to pay for it. Um so
• 13:30 - 14:00 specifically where humans demand other humans despite superior automation alternatives. These preference driven employment niches uh represent areas where society willingly pay pays a premium for human involvement. First is high liability jobs. Roles requiring personal accountability will uh maintain human presence due to legal and social demands for responsibility even as professionals increasingly uh augment with AI. So a high liability job could be president, you know, uh judges,
• 14:00 - 14:30 lawyers, doctors, um architects, right? You know, if if someone builds a building and it collapses, you want someone to blame. um you know or if a car if an automated car runs over someone who owns the car, right? All of these questions about liability come up. So uh even if hypothetically there's not necessarily a physical reason that a human needs to be accountable, there might be social and legal and regulatory reasons that you say, "Hey, we want someone to blame who's responsible for this." Next up is statutory positions.
• 14:30 - 15:00 So this is this is where uh legal frameworks do not contemplate um someone other than a human doing a job. Um and so this goes back to all elected officials uh judges some certified professions um like so for instance to be a doctor you have to be board certified. Um and there's many many other uh jobs where you need a professional license. Now, in these cases, those statutory positions, um, that might also be high liability
• 15:00 - 15:30 positions, they'll probably use AI and robots. Um, but it's just, you know, if a robot, if a if a if a doctor has a robot surgeon and the and the robot surgeon kills a patient, the human doctor is the is still the person you're going to sue or whoever owns that robot, right? Next up is the experience economy. So just neurological wiring creates persistent demand for novel humanto human interactions in entertainment arts and physical experiences. So this is this is the direct experience economy. This is
• 15:30 - 16:00 buskers on the street, face painters at fairs. This is musicians at concert halls. Um bartenders, baristas, those kinds of things. Um you know I I went to get lunch with a friend and he said, you know, I've got I've got four daughters. you know what what would what would I what would what would you advise me to to tell them I said focus on experiences and so he's like keep up your baking skills I was like yeah a bake shop is a perfect example of something where you
• 16:00 - 16:30 go to your local bake shop you want to talk to the the baker every morning right that is that is part of the experience economy even if the baker is using robots in the back to help right you still want to have that humanto human connection um so yeah that's that's another good example meaning makers So meaning makers are uh another way you could call this is authenticity jobs although experience economy is also authenticity. One of the underlying attributes for all of these jobs that persist some of these jobs that persist is authenticity and human connection. So
• 16:30 - 17:00 meaning makers those who help navigate existential questions through through shared human experience. This is critical. Shared human experience will retain demand despite AI's analytical capabilities. Um, a lot of us use AI for philosophical stuff, but at the same time, even though all of my fans have access to chat GPT and and every all the AIs that I do, you guys still come to me to make sense of the world because of that human connection. And that's why I make sure that my face is on my videos because that's one of the that's one of the things I can offer. This is not a
• 17:00 - 17:30 faceless AI generated channel. I am literally telling you what I think. And even if you disagree with me, the fact that you say there's another human out there who thinks this, that makes you feel better and more grounded. And then finally, rel uh jobs based on relationships and trust. So sales negotiation, diplomats, town council members, and all those kinds of things. In those cases, you know, what would be the most dehumanizing thing? If you go to a town hall meeting and it's a robot lecturing you about all the decisions
• 17:30 - 18:00 that the robots are making. No, you want a human to yell at, right? You want a human to to negotiate with, to debate with. You want your fate to be controlled by other humans, even if those humans are flawed because at least then the human is going to be on your level rather than the machine overlords. Now, I know that sometimes we talk about like, oh yeah, bring in the machine overlords. Um, the machines can help us uh negotiate and mediate. And who knows, I might be wrong about some of these. All right, moving on. That's the labor demand side.
• 18:00 - 18:30 Now, one thing that I do need to address is the lump of labor fallacy. So, the lump of labor labor fallacy basically uh under that this assumption underpinned uh Marx's biggest mistake of communist philosophy basically saying that there is a finite amount of labor that needs to be done and that once that labor is done, everyone can go home and and we all have leisure. What Markx got wrong is that human demand is infinite and even as automation and machines took up
• 18:30 - 19:00 took off we found other things for humans to do. Now this leads people to think that technology always creates new jobs. This is not necessarily true. Technology is deflationary meaning that technology uh allows the creation of goods and services at a lower marginal cost. So therefore you have more time and capital to allocate to other demands. So this leads to uh what what really is infinite is human demand. So it's not it's not that technology creates new jobs, it's technology has
• 19:00 - 19:30 tended to create new jobs. But what really is true is human demand is infinite. And so what this means is technological deflation liberates capital that creates new spending categories and continuously expanding human desires beyond basic necessities. However, there is no there is no economic principle or no physical law that says those new demands must be met by humans. So, this is what I call the labor supply fallacy. No economic principle requires human demands to be satisfied exclusively by human labor, opening the door to machine dominated
• 19:30 - 20:00 production. And again, uh many of you out there in the audience are thinking, "Yeah, we know. We know that AI is going to generate everything. We know that robots are going to generate everything. So, who owns the AI and robots?" And we're going to get there. I promise. So next is automation ownership. Specifically what I just mentioned the critical unresolved question remains who controls automated production systems and how consumer preferences influence capital allocation. This is where Mark said sees the means of production. Um to to put that into modern terms that would be if we nationalized all data centers
• 20:00 - 20:30 and and robots and that sort of thing and we all collectively owned it. Um that's not necessarily the best approach. Um that is one possible approach. Uh post-labor economics will actually uh propose ultimately many many other possible approaches that are less revolutionary, more more workable but still address this ownership problem um which we will talk about as property is the main main new uh paradigm. So then
• 20:30 - 21:00 wage labor breaks down. So the wage labor negotiation or social contract uh basically as as Markx uh anticipated and also keynes and others like lots of economists over the last uh century or two have predicted that eventually human labor is going to go the way of the dinosaurs. They weren't wrong. They were just early. Um so if wage labor goes down then basically collective ownership is the is the is the solution. Um, I agree in part, but at a national level,
• 21:00 - 21:30 at a state level is not necessarily appropriate, and you also don't want it entirely run by the state for many reasons, which we will get into. Um, and so the idea that Markx proposed that I disagree with is pure communism, classless, stateless, and cashless society. We're already arguably classless sort of, and that we don't have like a ruling aristocracy. We don't have a a class that is legally different. We do have a ruling class, you know, the elites and the oligarchs and stuff. So, we're not technically a
• 21:30 - 22:00 classless society, but also uh you can't have a stateless society because the state is the people and the state is the apparatus that the people generate to organize and coordinate. So, you can't you literally by definition if you have humans working together that's the state. The state might change. You might not have zars and presidents and kings. You might have a different kind of state, but you're always going to have a state. And then finally, cashless is just not going to work um for many many reasons. You're not getting rid of
• 22:00 - 22:30 currency. You're not getting rid of money. You don't want to moving on. So from all of this like let's take a bis the business perspective in imagine 10 15 years from now or maybe only 5 years who knows uh as companies see hey I can just use this AI or this robot and I don't need employees. So companies face an existential paradox in automation revolution. Eliminating their largest expense while maintaining customer purchasing power. And let me explain
• 22:30 - 23:00 this. So from a business perspective, zero employees is the optimal number of employees. Humans are the most expensive and complex asset that any company has. A factory is simple. It's four walls and some machines. A human employee has insurance, has OSHA, has unemployment, has taxes, has wages, has HR, has all kinds of stuff. Humans are very complex and expensive to hire. And you should only hire them as a last resort. Meaning
• 23:00 - 23:30 that as soon as, you know, agents and AI and robots become better, faster, cheaper, and safer than employees, guess what? Any company that has any level of rational self-interest is going to fire their employees. We're already seeing this start and it's only going to accelerate as AI and robots get better. We haven't even seen the the the the uh main main show yet because robots uh you know intelligent robots are not mass-produced yet. So this however leads to the demand
• 23:30 - 24:00 paradox and so when wage payments disappear across the economy because every employee gets fired so does consumer purchasing power collapsing demand for products. So even though company A which makes widgets and company B which sells you know whatever uh even though they are now producing things with much more efficiency because they fired all their employees well guess what those former employees are going to save money because they're going to f be focused more on feeding themselves and their family. So then demand collapses. So this is this is the
• 24:00 - 24:30 um this is the economic paradox or sorry economic agency paradox which we will talk about in the next lesson. So consumer demand uh corporate survival depends entirely on maintaining customers with sufficient disposable income to purchase goods and services. No employees, no demand, economy collapses. So you end up with this economic stalemate. These opposing these opposing forces eliminating labor costs while preserving consumer spending create an unresolvable structural
• 24:30 - 25:00 contradiction. That is assuming that the wage labor social contract is the only way forward. it. It is not the only way forward and neither is seizing the means of production the only way forward. Now, guaranteed jobs is something that some people have talked about. Bill Gates is saying, "Oh, yeah, we'll have two-day work weeks soon. We won't have two-day work weeks." Um, plenty of people in the past have predicted shorter works uh work weeks. That has never happened because why hire five people uh to to spread out that complexity because every
• 25:00 - 25:30 employee has overhead, right? When you can just hire one person and work him to death. Um, so, so shorter work weeks, guaranteed jobs, not going to happen. Artificial employment pro artificial employment programs prove both economically wasteful and psychologically harmful, offering no viable solution to this conundrum. Basically, if you guarantee a job that would be better suited to be done by a machine, that is economically inefficient and it's also demeaning to the human. says, "You're a pathetic human, but uh and a and a machine could
• 25:30 - 26:00 do this better, but just so the fact that we give you something to do, we're just going to, you know, give you a job." Like, no, nobody wants that. All right. So, then let's look at post-labor economics from the consumer perspective. Citizens require economic agency to participate meaningfully in society and markets. When automation eliminates traditional wage opportunities, it undermines the foundational mechanisms through which most people acquire property and build wealth. that is economic agency. Economic agency is the capacity to influence personal financial outcomes
• 26:00 - 26:30 through wages, property ownership and dem democratic participation in economic institutions. So let me restate this uh plain and simple. Economic agency primarily comes from three places. Number one, wages. So that's labor rights. Number two, ownership or property rights. And number three, democratic rights. Those are the three pillars of economic agency. Um, whenever you whenever you look at a country or a state or whatever that is struggling, it's because one of those three breaks down and all you need is one of those
• 26:30 - 27:00 three to break down and you end up with everything from economic stagnation to revolution. Um, so and that that is any one of those is necessary is is actually sufficient to create economic catastrophe. So if wages break down, even if we have property ownership and democratic participation, doesn't matter. We're still going to face financial calamity. Um labor rights. So labor rights are workplace protection that creates social stability by
• 27:00 - 27:30 enabling mobility, choice, and flexibility for workers throughout the labor market. If you can get a better job, go for it. Right? But that comes at the necessary expense of you might get also replaced. This is the uh flexible labor rights are actually one of the biggest double-edged swords of uh of uh our work culture today. Number two, property rights. The ability to acquire, control, transfer assets represents a cornerstone of economic freedom and wealth building opportunity. I can build this channel. I own the intellectual property of this channel. Um you know,
• 27:30 - 28:00 or you might own a business or whatever, right? So you can own stuff. You can own a house, right? And you can you can buy and sell houses. You can buy and sell almost anything that's legal to buy and sell in order to build property uh to build wealth through property rights. And then voting rights, democratic influence over economic policy provides citizens with indirect control over market structures and wealth distribution doesn't always work. Um you know de uh liberal democracy representative democracy is not perfect. It's better than any alternative. So
• 28:00 - 28:30 this is our social contract. Um, so this is this is this is the from your perspective, from most individuals perspective, this is the social contract is you you have economic agency that's based on labor rights, property rights, and voting rights. Well, like I said earlier, if labor rights become irrelevant because nobody's going to hire you anyways, the whole social contract dissolves. Moving on, government perspective. State authorities balance competing needs to provide security, stability and
• 28:30 - 29:00 mediation among economic stakeholders while facing unprecedented labor market disruption. This is what we this is the first half is what is true and then the second half is what we anticipate. So the government provides referee uh role. So neoliberal governance prioritizes minimal market intervention acting primarily as an impartial mediator while allowing private entities maximum autonomy. This means the government is there to mediate the labor market and other markets, you know, with antitrust laws and those sorts of things, labor protections, but otherwise it's mostly
• 29:00 - 29:30 up to the market to figure it out. Um, this is as opposed to other nations that um that have a lot more government intervention about basically saying who you can hire, who you can't hire, how you go about firing people, so on and so forth, or who or what jobs you are and are not allowed to do and that sort of thing. So rather than taking the manager role uh under uh most developed nations today the government takes more of a referee role rather than a manager role. Um the government also provides safety
• 29:30 - 30:00 nets. So American entitlement programs create a significantly lower economic floor than other developed nations leaving citizens more vulnerable to automation displacement. Basically the idea is that unemployment should not be that comfortable because then you won't be motivated to get a better job. I'm not saying that I agree with that philosophy. I'm just saying that's the underpinninging philosophy is that uh unemployment should will only pay you a fraction of what you would make otherwise so that you feel a sense of guilt, shame and fear and insecurity because if you feel insecure, you will
• 30:00 - 30:30 want to go work. And this is actually has been the official doctrine of the American Fed since at least the 1980s when I think it was Alan Greenspan said something to the effect of like worker insecurity is actually critical. You want workers to be reminded that that unemployment is a possibility. Um because then they will work harder. Um they will complain less and uh and they will tolerate more mistreatment. Um I I'm pretty sure that was Alen Greenspan. Anyways, and I'm also parap paraphrasing. So worker insecurity is in
• 30:30 - 31:00 is in American society by design. Now another thing that governments have to manage is dem uh demographic shifts. National prosperity depends heavily on prime age workers. So that's uh 25 to 54 I think is considered prime age. Uh while declining birth rates already threatening productivity before automation's full impact. So when you consider this, the government is going to want automation to replace those workers because short of forcing people to have babies, which that goes against everything that any free nation
• 31:00 - 31:30 believes in, you're going to want to replace that th those soldiers, those workers um with something you right and so that that something is going to be automation in the form of AI and robots. Another obligation that governments have is external defense. mainta maintaining ge geopolitical position requires substantial tax revenue and able citizens both jeopardized by widespread labor displacement. Um or you could you could argue that it is augmented by labor displacement. Um but if you don't have taxpayers, it doesn't matter. What are
• 31:30 - 32:00 you going to do? Just end up with a nation of nothing but robots, right? Robot citizens that don't age and and can keep working. That is one outcome. But we kind of want to have a place in the world. Like I want to keep living. Um, so I don't necessarily want it to be the United States of robots. So then finally, uh, government intervention. The cultural preference against significant state economic involvement creates barriers to implementing systematic solutions required by automation challenges. uh one of the one of
• 32:00 - 32:30 the TLDDR what this means is that the optimal solutions for post labor economics will be those that propose um market-based solutions things that can be voluntarily uh implemented by companies by consumers and banks. Um and then finally the bank's perspective. So we've covered all four of these perspectives. So there's the business, consumer, government and banks. These are the four primary pillars of civil society. Uh at least from an economic perspective. Uh banks function as
• 32:30 - 33:00 economic infrastructure providing essential services that enable transactions, investments and stability. Their centrality to financial flows positions them as critical architects of any post labor economic system. So first thing they do is maintain accounts. Banks serve as the fundamental repository system for deposits, credit lines, and debt obligations that enable modern economic activity. This means that they have the ability to help shape the direction and flows of all investments and money. Um, and we will cover how banks can actually participate
• 33:00 - 33:30 and implement post labor economics in a future one. Um, but right now we're just kind of setting the stage. Loans and debt credit mechanisms allow time shifting of purchasing power enabling immediate acquisition of assets against future payment commitments. You can buy a house now, pay later. Managing relationships. uh financial institutions occupy a unique mediating position between consumers, businesses and governments in all economic transactions. Again, if you want to visualize it, then the bank is almost the hub of uh the economy and
• 33:30 - 34:00 will be incredibly important to post labor economics. Um and we'll go through all the interventions that that every every stakeholder can implement in a future video. Banking incentives. The bank systems prosperity depends entirely on depositors maintaining accounts, conducting transactions and success successfully servicing debt. This like looking at everything from an incentive perspective. This will actually be the primary lever that we use to underscore uh how post labor economics is going to be implemented
• 34:00 - 34:30 voluntarily. Uh basically banks want uh their their there their depositors to maintain accounts. If you don't have any money in the bank the bank doesn't make money. um if the bank isn't helping conduct transactions, if the economy comes to a standstill, the bank is is suffering. And if no one can pay off debt, the bank suffers. So what the bank wants is people to be wheeling and dealing, using their bank accounts, using lines of credit, and those sorts of things. So banks will ultimately do whatever it takes to ensure that that remains true. Uh as the primary
• 34:30 - 35:00 administrators of econ economic relationships, banks will inevitably become pivotal architects in implementing any post-labor economic framework. The government as we just said wants various things. Uh government wants external defense. It wants to shore up demograph demographic shifts. It wants to provide safety nets and provide be a referee. Um however, we want minimal government intervention. But at the same time, the government wants a paying tax base, right? You could simplify it to the government wants taxpayers. Um and if you're not
• 35:00 - 35:30 making any money, you're not paying any taxes. So the government will intervene and say you need something needs to happen so that consumers so that citizens can spend money and pay taxes. Basically from the consumer perspective you want economic agency. Plain and simple that's it. You want money in the bank account. And this is oversimplified but it's from an economic perspective. And from a business perspective they want zero employees but they want paying customers. So if you really simplify it down to the incentive structures, no employees but paying customers. You want
• 35:30 - 36:00 money in the bank. you don't care where it comes from. Uh the government wants taxpayers uh and economic productivity and then the banks also want uh customers with money. So if wages break down then we have to shift to another means of making sure that citizens and consumers have money to spend. It's that simple. All right, episode two will be about economic agency uh more specifically. So thanks for tuning in and watching to the end. I look forward to seeing you at episode two of this
• 36:00 - 36:30 lecture. Bye.