Wealth of Nations, by Adam Smith lays the foundation of modern economic thought by exploring the value of labor, capital, and land. He deduced economic value to effort, productivity, and exchange. In Smith’s world, labor wasn’t just a cost. It was the engine of value creation.
In the brink of Artificial General Intelligence (AGI) and superintelligent systems, we are witnessing a direct challenge to that equation. Labor, as Smith defined it, is no longer the exclusive driver of value. Machines, algorithms, and autonomous systems are doing what once required human effort. And this disruption forces us to question the core doctrines of economics.
In my opinion, we are standing at the edge of what I believe is a redefinition of economic value itself.
What Happens When Labor Shrinks?
First, cost structure,
In Smith’s framework, the price of a good reflected the amount of labor embedded in it. If labor is replaced—whether by AI or humanoid robots—the cost structure collapses. Although it implies an explosion of economic growth, there is more to consider.
Second, circulation of value
When we remember the extreme connectivity of actors in an economy, Labor isn’t just a production input; it’s actually the channel through which money circulates. Wages don’t merely pay individuals; they fuel consumption, demand, and resource distribution across society.
Here’s the paradox:
– If companies can exist without or with very few human workers, they don’t pay wages.
– But without wages, people have no income.
– Without income, demand collapses.
– Without demand, economic circulation breaks down.
“The future is already here — it’s just not evenly distributed.”
William Gibson
So, from what I observe and hear from people around me in San Francisco, AGI is almost certain and it’s just a matter of time, 2027 or 2030. Centuries old economic doctrines needs to be questioned and redefined and functional institutions build on top of them.
Obviously, this is actually an existential turning point rather than a mere labor crisis.
Here is What I think is going to happen.
I want to keep this short and say what I actually want to say:
Even though we -human- are evolved for a slowly moving physical world, at the same time, we are extremely resilient and adaptive. Certain motives and traits are going to prevail (creativity, curiosity, need for purpose, search for individual recognition etc. )
I know we can’t predict what ‘s going to happen on Monday ar the stock market from Friday, but I want to try my shot and share my forecast about 2030 – 2035
There will be 10s of times more solo operating, self-employed, super-specialized and super-productive individuals.
They will need great tools and systems to operate. Current systems and tools will evolve many times.
I will write more about the questions I have in coming posts.
Omer,
March – 2025
Palo Alto, California.