Traditional economics assumes human rationality and infinite growth, but we need to use biophysical economics to capture how AI shatters this the traditional model. AI doesn’t end scarcity; it shifts the bottleneck to physical energy and data centers from labor and time. Meanwhile, autonomous algorithmic actors cause market collusion and exploit human consumers. Our economic game with AI can never be fair to us because of information asymmetries.
Traditional economics assumes human rationality and infinite growth, but we need to use biophysical economics to capture how AI shatters this the traditional model. AI doesn’t end scarcity; it shifts the bottleneck to physical energy and data centers from labor and time. Meanwhile, autonomous algorithmic actors cause market collusion and exploit human consumers. Our economic game with AI can never be fair to us because of information asymmetries.