What would a post-labor economy *actually* look like?

Starting to explore the unanswered questions

Most conversations about AI’s long-term impact eventually lead to a common refrain: ‘We’ll need to establish a new economic system once human labor becomes obsolete.’ But so far, no one has figured out what this system would look like. Very few people have even attempted to explore this question beyond a surface-level paragraph or two. There's some basic ideas floating around, like UBI, but is that really the extent of our contribution to thinking about this future?

I wanted to explore what a stable economy in this future might actually look like, diving into fundamental questions such as: Will money still have value? How will resources be produced, distributed, and owned? Who will decide the amount that each human is entitled to?

This essay aims to figure out the right questions I think we should be asking, and some initial thoughts on what the answers to those questions should be. In future essays, I hope to start outlining more concrete proposals of what this economy might actually look like.

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Before we start thinking about an “economy of the future”, we should step back and clarify, what even is this thing we call the ‘economy’? We use this word as if it is a fundamental part of human societies - something that has always existed and will always exist.

The “economy” is defined today as basically everything that people produce, trade, and consume in a society. We try to capture the “size” of an economy with a metric called Gross Domestic Product, which basically adds up the cost of all the final goods and services that are bought and sold in a population. But why exactly do we measure this? It seems like a strange thing to try to quantify. Most conversations about economics never seem to acknowledge why we care so much about things like interest rates and tax policy and GDP.

The simple purpose of economics is to figure out the best way to distribute resources so everyone can have what they need and want.

For most of history, this has not been a particularly complicated or interesting question. Most societies have not cared to study or debate it, as it’s been pretty obvious how most people obtain their resources, and there hasn’t been much we could do to change that. But the way our society is organized today means that we need to spend lots of time debating trade policy and tax brackets in order to make sure that we’re designing the best possible way for people to obtain the resources they need to survive and thrive.

It’s important to remember this basic goal of economics as we head into this discussion of what a future economy could look like. Whatever complex term we’re talking about or whatever goal we’re trying to optimize, it should ultimately serve the purpose of “giving everyone the resources they need to survive and thrive”.

Before we dive in, I think it’s illuminating to spend a bit of time understanding how humans have organized our economies in the past. How have we historically distributed resources across society, and how “normal” is the way we do things today?

How have we done this in the past?

We’ve been doing things one way for a loooong time

Hunter-gatherers

For most of history, humans lived in small tribes, and shared resources like food, shelter, and tools communally. Exchanges were informal, based on mutual trust ("I'll help you now, you'll help me later"), without formal debt tracking or complex decisions about resource distribution. This was possible because everyone knew everyone in their community personally.

Early agricultural settlements

Around 10,000 BCE, humans started settling in one place and growing crops, causing the size of tribes to grow and become villages. Food surpluses were now possible, so people could store extra for later. Most resources were still shared through personal relationships since people mostly knew everyone in the village. But for surplus stuff, villages started leaning on elders, chiefs, and religious centers to figure out what to do with it — often using it for feasts, ceremonies, or redistributing it to people in need. This was the start of small-scale centralized resource distribution.

City states, nations, and empires

Villages eventually grew to become the size of city states, nations, and empires. For the first time, most people now had to regularly interact with strangers in their society, which meant that many exchanges could no longer be based on purely personal relationships. There now needed to be more formal ways to “track” who owed what who - ledgers of debts. Central authorities started using these methods to track the distribution of resources across society.

As more people started contributing to society in non-food producing roles, the role of central authorities grew - they started to more formally collect taxes (in grains, livestock, currency, etc.) from society and redistributed these resources to those who needed it. When some states began enforcing that their taxes be paid in actual currency, people started exchanging their goods for that currency - this was the birth of markets! However, most people remained self-sufficient (within their family networks), or relied on some form of central redistribution.

Feudal societies

Around 500 CE, many of the major empires in Europe collapsed, and this led to the birth of feudal systems. In these societies, most people (80-90% of the population) were serfs who were under the control of lords. Serfs lived on plots of land that they cultivated - most of the food they produced was owed to the lords and nobility that owned the land, and in return, they could keep enough food to sustain themselves and their family. Most other resources they needed also came directly from the land they worked.

There were some people (5-10%) who lived in urban areas and exchanged goods and services for currency, which they used to purchase the resources they needed.

Early capitalism

The period of 1400 to 1800 saw the slow collapse of feudal structures and the rise of wage labor, where people increasingly worked for merchants, craftsmen, or landowners in exchange for money to purchase necessities like food, clothing, and shelter, particularly in growing urban centers. However, many people, especially in rural areas, retained the ability to directly produce some of their own resources. While markets and trade networks were expanding, they were not yet the dominant means of obtaining basic resources - self-sufficiency and local resource access remained viable options for many.

Modern economy (today!)

Beginning in the 1800s, the way people access basic resources underwent a significant transformation, driven by the industrial revolution and globalization. Today, nearly everything is produced and distributed through markets, rather than through any central, hierarchical, or planned systems. Most people exchange their labor for wages, and work in specialized roles like factory workers, office employees, or service providers. They then use these wages to purchase their necessities like food, shelter, and clothing in impersonal markets. Taxation and redistribution exists as a social safety net in many societies, but it aims to provide only the bare essentials, and is not the primary way for people to acquire the resources they need to live. Direct production of resources or sharing of essential resources like food is rare and no longer a primary means of survival for most.

Communism: a short experiment in the 1900s

In the 1900s, some nations decided to ditch markets and put the state in charge of figuring out what resources to produce and how to distribute them. The goal was to wipe out inequality and provide basics like food and housing for almost no cost. But central planning did not work at such a large scale - the state was unable to predict the population’s needs accurately, and this led to bread lines, shortages, and often starvation. Over time, inefficiency and stagnation tanked the system.

Where we’re going next

It’s clear that there is a wide range of options for how societies can organize themselves economically. Today, we live in a world where we don’t directly obtain most of the resources we use in our lives - we purchase them in impersonal markets. Gone are the days of sharing food and resources among a community where everyone knew each other personally, and gone are the societies that collected food in central granaries and redistributed it as they saw fit. We now exchange our labor and skills for money, and then exchange this money for the resources we want.

But it’s becoming clear that we are eventually going to be in a world where human labor has no value. So our current economic model can no longer apply. What system of economic organization makes sense in this future world?

To be clear, let’s define more specifically what the capabilities and constraints of this world will be.

Describing this future world

For the sake of this article, we will assume that we are moving into a world with the following characteristics:

• Artificial intelligence systems will be more cognitively and physically capable than humans

• The production of most goods and services will be done by machines

• Many basic necessities will become abundant as the cost of producing them will drop to almost zero (for example, electricity)

What kind of economic system makes sense for this kind of world? Let’s start with the obvious discourse.

The basic solution

If people can no longer make money by working, but still need money to buy things in markets, the most basic way to solve this problem is just to…give them money directly. We’ve all heard of this, it’s called universal basic income (UBI).

What would this actually look like in practice?

A world with UBI

Today, our world is dominated by corporations - these entities are responsible for producing most of the goods and services that we use today. As a result, corporations have captured most of the global wealth that has been generated over the last 2-3 centuries. This wealth has been spread across society in many ways, but two of the most important ones are:

1. Owners of corporations hold equity in corporations, which increases in value, therefore increasing their wealth

2. Workers in corporations receive wages, salaries, and benefits from corporations, in exchange for their labor

This second method of wealth distribution is going to end when human labor is no longer valuable.

This means that by default, almost all wealth generated by corporations will be transferred directly to the owners of corporations.

This is where UBI comes in. To spread this wealth across society, a central authority will heavily tax corporate profits, and then distribute this income across the population.

This is great! Right? Everyone still gets to benefit from the wealth increases that AI will bring, and people will no longer have to work. Well, kind of. Let’s step back and look at this world from a more holistic perspective.

Remember that in this world, humans offer no value to the production of goods and services. AI systems will do all the work - corporations will be run using AI, and as a result, they will likely grow to enormous sizes; much larger than the largest corporations today. As we stated above, all of this wealth will by default be transferred directly to the owners of these corporations.

Consequently, we will have produced two classes of people in this world:

1. Corporate owners, who might become trillionaires or even wealthier.

2. Everyone else, whose basic needs would depend on some form of universal basic income (UBI) or a similar redistribution system

We’re going to “slice” a tiny bit of total wealth and distribute it to everyone else

There will be a very sharp divide between these two classes. Despite humans no longer contributing to the wealth being generated by economic production, a small fraction of them will be benefiting almost entirely from this system. In this world, the people who own no equity in these corporations will have no economic agency (for more on this, check out David Shapiro’s substack). They will be completely reliant on others for their needs to be met.

Not only will wealth be highly concentrated in this future world, but power will also be highly concentrated. The “owner” class will be able to essentially control the flow of all resources in this society, with little to no natural checks on their power. In today’s world, wage laborers hold at least some power over the owners of corporations, as they are needed to perform work. In the future, corporations will not be beholden to any workers, unions, or any such class anymore. It’s true that they will need a certain amount of wealth to be redistributed in order to power consumption of their goods and services, but that’s a fairly small amount of leverage for the public to hold.

In addition to the owner class, there will need to be another significant concentration of power in this world. The entity that is in charge of enforcing this taxation and redistribution (likely the government) must be extremely resilient against any forms of influence by the owner class in this society. It would always have to advocate for the needs of the “non-owner” class. If at any point, this central authority is corrupted, or even heavily influenced by the owner class or corporate lobbyists, the non-owner class will have no one on their side to bargain with in this society.

This seems…not ideal.

It’s clear that simply adding “UBI” to the way our economy is structured today would lead to a deeply unbalanced and polarized society. Wealth would obviously be highly concentrated, but so would power. Most people would not have the economic agency to truly participate in the decisions that drive society forward. So what are our other options?

Beyond UBI

We’ve understood that a world in which a small subset of humans hold all the means to produce goods and services (we can call this capital) in an economy is deeply problematic. So…why not give everyone capital? If AI is entirely responsible for generating all wealth in this society, why not give everyone a slice of the AI that is responsible for generating this wealth?

Universal Basic Capital is an idea that proposes giving everyone ownership in the economy in some way, such that they are active participants in the growth of the economy and have a meaningful amount of power in their society.

Giving everyone a “slice” of the future economy

This sounds a lot like Marxism, but it’s worth remembering that in this world, humans aren’t contributing in any way to the production of goods and services. So why should only a few benefit from the wealth that’s generated as a result?

A reasonable rebuttal may be that if everyone has the freedom to start a corporation in this world, isn’t everyone free to generate their own wealth? This is an important point, and we do want to preserve this sort of freedom in the future. But it’s unreasonable to expect those who have the starting capital of a UBI check to be able to start companies that easily compete with the class of people who already own significant chunks of an AI-driven economy, and could well be trillionaires by this time.

How would UBC actually work in practice? There are a few options for implementing something like this, which I start to describe below. Note that these are just a starting point, and more thinking is required to flesh out a comprehensive solution.

Ownership in corporations

In this approach, everyone gets a set number of shares in a set of major corporations that are decided by a government fund or an independent body. These shares could be distributed to everyone at birth (or adulthood). Since the wealth generated by corporations primarily benefits the owners of corporations, this solution directly tackles that reality by making everyone an owner.

You might say that people can just buy stocks themselves today. What’s the difference in this approach? The obvious one is the automatic distribution. Today, there are many barriers for people to be able to invest - a large one being a lack of starting capital. It’s also true that we should already be incentivizing more people to invest today, as well as providing more financial education.

There is still the question of how to deal with the long-term impacts of allowing these shares to be tradable - after a few generations, wouldn’t we eventually end up with a small number of people holding all the wealth anyway? Some approaches that have been proposed include a holding period or limits on selling—basically making it so you couldn’t just cash out immediately. There are some obvious drawbacks to these approaches, so some more thinking on these questions is required.

Asset ownership

This involves distributing assets that are relevant to the production of goods and services. This could be physical or digital assets.

Physical assets: Land which is relevant for AI-powered production could be split up and distributed among a population.

Digital assets: Everyone could be granted a certain amount of “compute” (i.e. server time in a distributed cloud network) at birth, or when they reach a certain age - this could scale as computing power of the civilization grows. Another approach is having everyone own the right to certain datasets (i.e. anonymized personal data) that could be used to train AI models and power the AI economy.

Fractional ownership could also enable multiple people to own high-value assets—e.g., 10 people sharing a patent or a large land parcel. There are some approaches that make this more possible, such as tokenizing all assets.

The question of periodic rebalancing will also need to be answered here - i.e. how does this society continue to remain healthy if over generations, the assets start to concentrate within the hands of fewer and fewer people? A possible answer is that we should just let this happen as much as possible, without constant heavy-handed control. More thinking is required.

Wealth funds

Another approach is publicly-managed wealth funds, which would invest directly in AI-driven companies and industries on behalf of the citizens. Under this setup, the state—or an independent public body—would acquire equity stakes in significant corporations that drive the economy, and as these sectors grow and generate profits, the fund would collect dividends from its corporate holdings and pass these returns directly back to people as regular payouts. This ensures that any growth reflected in these corporations would directly be passed down to the citizens.

This model functions similarly to sovereign wealth funds today, such as Norway’s Oil Pension Fund or the Alaska Permanent Fund.

Of course, there are practical challenges here, too. How do we ensure the fund remains transparent, efficient, and politically neutral? How large should its stakes in these companies be, and how aggressively should it pursue returns versus long-term stability? There's also the question of governance: who decides which corporations the fund invests in?

Questioning the basic fundamentals

So far, we have been playing with some basic ideas that marginally change the way society is structured today in order to fit this post-labor economy. Universal Basic Income and Universal Basic Capital are easy to visualize because they use many of the concepts that exist in our current economy.

But this may not the best way to think about the future. As we saw at the start, there are a wide range of possibilities for how human economies can be organized. Each phase of history has brought new ideas and new economic structures. Since we are entering a radically different world with the next phase, it makes sense to question whether the economic concepts that exist today should continue existing in the future. What do I mean by "economic concepts”? I describe 3 below.

Concept #1: Corporations

Corporations produce most of the goods and services that people use in the world today. The concept of a corporation was originally created so that multiple people could pool their capital and work on large projects together. This had the benefit that no single human would have to carry all the risk of a large project. Anyone who contributed capital to the project would have a “stake” in the project - they would benefit if the project went well, and lose out if it went poorly.

It’s a pretty useful idea - pooling together resources and sharing the burden of a large project among multiple people.

But does it make sense for corporations to continue to be the primary way to produce most of the world’s goods and services in the future?

Ownership

A fundamental and obvious aspect of corporations is human ownership. If humans want to work on a large project together, they should obviously own that project. But as we have seen in previous sections, this may start to create situations that are highly unstable in a world where AI can generate enormous amounts of wealth and funneling that directly to the owners. Capitalism today rewards entrepreneurs who produce value for society. But in the future, it’s unclear what role “owners” would play in a world where human intelligence and labor is useless - will they just be specifying the parameters of the operation and letting the AI run the show?

It seems like we need to come up with novel ideas to distribute the wealth that comes from these large AI-run entities. Humans still should have ownership and power over the operation in some way in order to ensure that the output benefits society, but the way ownership works today creates highly narrow concentrations of wealth as discussed above.

However, its also important to note that ownership today also provides strong incentives for entrepreneurs to provide useful goods and services to society. Can we find a way to maintain such incentives by rewarding those who want to improve the material conditions of society in the future, without having the pitfalls mentioned above?

Optimizing for wealth

Corporations are independent entities that continue to exist long after the humans which initially created them leave or die. We can essentially think of them as their own intelligent structures that are trying to optimize their own goal. The main goal is simply to maximize their wealth.

This environment of corporations “maximizing their wealth” in a free market has proven pretty beneficial to humans in the past 2-3 centuries, as Adam Smith’s “invisible hand” of capitalism predicted. As he stated, if we allow independent actors to function in their own self-interest, they will end up benefiting society as a whole. He may have been talking about individuals, but the same concept applies to corporations.

But this incentive to “maximize wealth” might not be as optimal in a world with superintelligent AI. What would happen if we have thousands of superintelligent corporations simply trying to make as much money as they possibly can in this future? The negative externalities generated by large, powerful corporations are already starting to have serious consequences even in a world without superintelligent AI. These externalities could quickly spiral out of control, especially in a world where humans no longer understand how AI is working.

Is wealth maximization still the best incentive we can come up with for these structures in the future? Or should we have some other goal that more closely aligns with the ultimate value we wish to produce from these entities?

If not corporations, then what?

This is where we need to get creative. We ideally would like to maintain the efficiency of corporations in producing goods and services, but without the pitfalls we mentioned. There are existing alternatives to large-scale production of goods and services, such as public utilities, co-operatives, and even sometimes, nonprofits, but we might need to find a new type of entity which can serve the needs of the future, post-labor economy. We need ways for AI systems to self-organize and produce goods and services for humans to consume, while sharing the wealth generated by such endeavors with the entire population.

I’ve attached a couple of links below that may provoke some thought:

Decentralized Autonomous Organizations

Cooperative paradigms for artificial intelligence

Concept #2: Markets

Markets are systems where resources can be exchanged freely without centralized oversight or planning. Production and prices are determined naturally by supply and demand, reflecting what people want, how much they need, and how readily available those resources are.

Central distribution of resources can be effective in small or narrowly focused contexts, where the population’s needs are easy to predict. However, in large, complex societies, centralized systems have struggled to match the adaptability and efficiency of free markets.

But how will the nature of markets change in a world with superintelligent AI? There are a few themes worth exploring.

Distribution

Markets are superior at distributing resources to people because they can process information about supply and demand in a quick, decentralized way. But what if AI becomes better at predicting the supply and demand of various goods for specific markets? Even if only specific types of markets are disrupted, such as healthcare or real estate, which are notoriously inefficient, the way resources are distributed could look very different.

Abundance

The other major point of difference in this future is that of abundance. Many resources that are scarce today will become abundant in this future, and the role of markets in distributing them will make less sense. Today, things like clean water, electricity, and even information are all things that are readily available to most people due to their abundance. Further technological progress will make more resources abundant.

Concept #3: Money

The following factors contribute heavily to money’s “usefulness” in our modern economy:

• The ubiquity of impersonal transactions, where the people trading have no personal relationship with each other, and therefore every party needs something of value in order for the exchange to take place

• Scarcity, where goods and services have value because there is a finite amount of them that people have access to

• Markets, where resources are available for exchange and traded regularly between buyers and sellers

All of these things could change in a future with superintelligent AI and abundant resources. As the cost of many things becomes negligible and we start distributing them in other ways, the role of money will change.

It seems unlikely that we will ever completely remove the need for something like money, as it is a highly general concept which represents value. One possibility to consider is what kinds of things we will “value” in this future. As we shift away from humans providing purely economic value, our definition of this could expand to include other ways that humans can contribute to their society.

Cultural and social contributions will be more valued than they are today, and it seems likely that people who provide more of this will be rewarded in some way. Whether this will be captured in a formal unit of value like today’s currency, or captured in more informal ways remains an open question.

Going even deeper than the “economy”

We’re now starting to confront some fundamental questions about the core building blocks of an economy. It’s as if we’re rebuilding from the ground up, creating a system that fits this new world while letting go of the outdated concepts we’re currently bound to.

But if we’re serious about designing a new economy for this emerging world, we first need to understand what kind of “world” we’re building for. What vision of society should this post-labor economy support? Let me explain what I mean by this.

Today, many Western countries have the following values. Any economic system they have conforms to these deeper beliefs held by society:

1. Individual Liberty: The belief that people should be free to make their own choices—whether in speech, religion, or personal pursuits—as long as they don’t harm others.

2. Property Rights: The principle that individuals have the right to own and control property, with legal protections ensuring its security.

3. Meritocracy: The notion that success should reflect talent, effort, and achievement, not inherited privilege or status.

4. Democracy: The conviction that political power belongs to the people, exercised directly or through elected representatives.

There are more, but you get the idea.

So when we are designing an economic system for the future, and considering the role of UBI, UBC, corporations, etc — we need to first have an idea of what core values we want this economy to serve. What do we want most people’s lives in this world to look like? It’s only after answering this question that we can design an economy that works for us.

The values listed above seem like a good starting point for what we might want in the future, but many of them start to take on a different meaning in a world where human labor has no value.

So here are some values that I think might make sense for a future world (many of these overlap with the ones mentioned above, but are particularly worth highlighting in this future world):

1. Economic participation and influence: The ability for everyone to have a say in directing the use of automated systems and resources, ensuring these systems reflect human priorities and improve overall well-being rather than purely economic efficiency or wealth concentration

2. Universal access to essential resources: Access to fundamental resources—food, housing, healthcare, education, and information—as a baseline for every individual. This baseline can be raised as societies become more advanced.

3. Rewarding cultural and social entrepreneurship: There should be meaningful incentives to improve one’s society in non-economic ways. This also means that a certain level of inequality in society should be considered healthy, as entrepreneurs are rewarded.

4. Agency and “time autonomy”: The principle that everyone should have maximum freedom to choose how to spend their time

5. Flourishing over progress: The principle that human flourishing should be placed at the center of society’s goals, rather than simply economic growth (these two are usually aligned, but sometimes are at odds)

There are certainly others that would make sense, and the ones I have mentioned also have much room for debate. We need to have clear agreement on these values before we start to define what kind of economy we want to build for the future.

A small aside on community structures

For most of history, we have lived in communities that are small enough such that we have been able to have a personal relationship with everyone within them. This shaped the way we distributed resources, but also was a pro-social and deeply human way of living life. We have moved towards a much more impersonal way of living, where much of our lives are optimized to produce economic output. If we no longer have to move around to specific urban areas for our next economic opportunity, might we return to more communal forms of living? And what could this mean for how we share resources among ourselves?

Next steps

The purpose of this essay was to start exploring the right questions in our pursuit of determining what a post-labor economy might look like. I wanted to go deeper than “UBI” and start questioning the fundamental ideas that define our economy today, and whether they will continue to make sense in the future. In the process of this exploration, it became obvious that we must first agree on a set of shared principles that our future world should abide by, before we can create an economic system which fulfills this vision.

I hope to pick up from this point onwards in future essays on this topic.