Post-Labor Economics Lecture 02 - "Economic Agency Paradox" (2025 update)
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As automation eliminates wage labor across sectors, economies must shift purchasing power distribution from wages (60%) to property ownership (60%) and transfers (20%) to maintain aggregate demand and prevent economic collapse, with banks and counties serving as primary infrastructure.
- Labor substitution becomes inevitable when machines are better, faster, cheaper, and safer than humans, threatening the wage-based social contract
- Without alternative sources of economic agency (property rights and democratic participation), widespread unemployment triggers death spiral of declining demand, business failures, and social instability
- Property ownership and decentralized market mechanisms offer superior solutions to UBI alone for distributing economic value in post-labor economy
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Trusts (public and private structures enabling collective ownership of capital assets) are a viable model for distributing property ownership broadly because they are well-tested, constitutionally sound, have established governance best practices, and can be based on residency with no buy-in required, as demonstrated by the Alaska Permanent Fund and Norwegian Sovereign Wealth Fund.
“Public and private trust structures enable collective ownership of capital assets sharing returns across broad beneficiary populations. Some trusts you need to buy into, some you don't. Some are based on uh on residency. So, the Alaska Permanent Fund, um the Norwegian Sovereign Wealth Fund, all of those are just based on citizen citizenship and residency. No buyin is required. And furthermore, the fact that trusts are very well tested. They're they're they're constitutionally sound. the governance is is well understood. We have established best practices.”
Once machines are better, faster, cheaper and safer than humans, it becomes economically inevitable that labor substitution happens across all sectors.
“once machines are better, faster, cheaper and safer than humans, it becomes economically inevitable that labor substitution happens”
Once machines are better, faster, cheaper and safer than humans, it becomes economically inevitable that labor substitution happens across sectors.
“once machines are better, faster, cheaper and safer than humans, it becomes economically inevitable that labor substitution happens”
Businesses face a fundamental paradox: they want zero employees to lower costs, but if every company fires everyone and replaces them with AI and robots, consumers lose purchasing power, aggregate demand drops, and the entire wage-labor social contract breaks down resulting in economic death spiral.
“if you fire everyone, if every company fires everyone and replaces them with AI and robots, then none of your consumers or none of your customers have any money left. So therefore, the entire uh wage, labor, uh social contract breaks down and therefore aggregate demand drops and you end up in a death spiral.”
Aggregate demand—the total purchasing power of consumers in the economy—is the key macroeconomic metric that must be maintained when wages decline, because without consumer spending, the economy enters a death spiral of reduced production, innovation, and growth.
“modern economic systems fundamentally rely on widespread consumer purchasing power to drive production, innovation and growth... if jobs go down, aggregate demand goes down. And that is one of the key metrics that is measured and tracked to keep the economy running.”
Civil unrest, revolution, and political instability historically occur when economic agency declines; maintaining economic agency for citizens is essential for political stability regardless of government ideology.
“if economic agency gets too low, the chances of things like civil war and revolution go up. Um and certainly that's what we see is uh that's what has determined most of the outcomes of elections”
When economic agency becomes too low (e.g., through mass unemployment), historical patterns show that civil conflict and revolution become likely; this is more determinative of election outcomes and political stability than other factors.
“if economic agency gets too low, the chances of things like civil war and revolution go up. Um and certainly that's what we see is uh that's what has determined most of the outcomes of elections is uh kitchen table economics. Basically how well the economy is treating consumers really determines the uh the voting temperature”
If unemployment reaches 20-30%, it would be catastrophic to the economy and society; the Great Depression peaked at 25-28% unemployment, so 20-30% unemployment from automation would match or exceed that catastrophic level.
“it doesn't even have to get to 100%. If we just get to 20 or 30% unemployment, that's bad enough. Consider that I think the highest unemployment we saw during the Great Depression was 25 to 28%. And that was catastrophic. So if we get to 20% unemployment, that would all already be catastrophic to most people, but we're looking at 30 to 40% unemployment as a very real possibility due to artificial intelligence and robots.”
Labor rights, property rights, and voting rights form the three pillars of economic agency in modern civil societies, and these rights together compose the social contract that currently enables economic participation.
“There are three primary categories of economic agency in modern civil societies. Number one is labor rights. The right to work, organize, and negotiate fair compensation... Pillar number two is property rights. Ownership of assets enables wealth accumulation, financial security, and generational transfer of economic value... the third pillar is voting rights. So democratic participation allows citizens to influence economic policies, regulations and structural opportunities.”
Labor costs (wages and benefits) represent 30-40% of the total cost of building a house in the United States, more than any other single input except in cases where land itself is exceptionally valuable, making labor the scarcest input to economic production.
“the single big biggest uh uh bucket that money goes into for building a house is labor. It's 30 to 40% of the cost of a house is the labor that went into it. That's more than any other single asset or resource, unless it's a house that sits on a really big piece of land.”
Democratic participation and voting rights allow citizens in liberal democracies to change economic policies and paradigms relatively rapidly compared to authoritarian regimes, and this capability is a major innovation over stagnant monarchies and totalitarian systems.
“One of the most remarkable things about liberal democracies is that we can elect a new uh a new you know head of state whether it's a president or prime minister or whatever. Um and so we can change the economic uh temperature. we can change the economic paradigm um relatively quickly... that is a huge huge innovation over stagnant monarchies um and other totalitarian and authoritarian regimes namely Russia and China right now”
Banks function as economic infrastructure connecting all stakeholders (depositors, loan-seekers, businesses) by issuing debt and collecting interest; when customers lack resources, banks' foreclosure business model fails because widespread defaults on mortgages and loans destroy bank profitability.
“Banks function as economic infrastructure connecting all stakeholders requiring depositors with money for transaction and debt servicing... the bank wants to be uh issuing debt in the form of mortgages and loans and collecting interest... If their customers are broke, then the bank is just going to be foreclosing on everything... that's not the bank's business model. foreclosures are are a necessary evil to kind try and recoup losses”
Creative destruction refers to the large-scale economic pattern where new industries are created by destroying old ones (e.g., tractors and farm automation destroyed traditional farming), while labor substitution refers to one-to-one replacement of a human with a machine.
“This is all fundamentally coming because of what's called labor substitution. Um, it's also called creative destruction, although that's more about you create a new industry by destroying an old one. Um, so for instance, tractors and and uh farm automation and farm machinery destroyed the old way of doing farms. So that way you created new industries such as the tractor industry. Um, so creative destruction is kind of the large-scale pattern. But labor substitution is what happens when a machine simply just replaces a human one to one.”
Banks have long-established KYC (know-your-customer) solutions for identity management, security, privacy and compliance that emerging technologies like blockchain and DAOs have yet to solve effectively; proof of stake and proof of ownership are what banks have provided for hundreds of years.
“Know your customer. Banks provide established solutions for identity management, security, privacy and compliance that emerging tech technologies like blockchain and Dows have yet to solve effectively. So basically proof of humanity...the banks don't really care. Uh banks have ways of establishing your identity. Um, if anything, blockchainbased and crypto-based solutions will just be an additional layer on top of it. But at the same time, proof of stake and proof of ownership, that's what banks are for. That's literally why why banks have existed for hundreds of years.”
Banks require customers with sufficient income to service debt; if customers become unemployed through automation, banks must foreclose on assets, creating a lose-lose situation as foreclosures are inefficient wealth destruction.
“If their customers are broke, then the bank is just going to be foreclosing on everything...if everyone is fired, then they're going to have to foreclose on literally everything. This is what we saw during the uh great recession, the 2008 great recession was that foreclosures went up. Um, and that's not nobody wins in that situation.”
Government wants to maintain tax revenue, demographic stability, and geopolitical position while providing minimal market intervention; if citizens become unemployed through automation, government loses tax base, citizens demand solutions, and election outcomes shift.
“The government's perspective wants to maintain tax revenue, demographic stability, and geopolitical position while providing minimal market intervention...if all of your citizens are unemployed, guess what? The citizens are going to rise up...kitchen table economics. Basically how well the economy is treating consumers really determines the uh the voting temperature”
Robots will take longer to scale than AI agents because the marginal cost of creating additional robots is higher than creating additional agents, since agents are ephemeral software (data) while robots require physical manufacturing.
“it's going to take a little bit longer for robots to really scale up. And that's just because uh supply lines, factories, there's it's it the marginal cost of creating more robots is always higher than just creating more agents cuz an agent is an ephemeral piece of software. It's just data.”
Banks are user-friendly because financial institutions translate complex economic paradigms into accessible interfaces through local branches and mobile apps; most people can delegate sophisticated property management to banks and receive dividend reports.
“Banks are userfriendly. Financial institutions translate complex economic paradigms into accessible interfaces through local branches and mobile apps that manage sophisticated ownership mechanisms. From your perspective, you just get money in the bank...most people are probably just going to delegate it to the bank. Say, you know, manage it for me. All I want to see is my dividends acrewing every week.”
Local governance fosters accountability and trust when residents receive economic benefits because county officials live alongside constituents affected by their decisions; this is the primary principle of subsidiarity.
“Local governance fosters accountability and trust when residents receive economic benefits as county officials live alongside constituents affected by their their decisions. This is the primary principle of subsidiarity which is push all the decisions out to as local as you can and this includes economic decisions which is one of the cornerstones of post labor economics.”
Universal Basic Income (UBI) is necessary but not sufficient as a solution to automation-driven unemployment because it creates four major problems: central control and bureaucratic dependency, market distortions through uniform payments ignoring cost-of-living variation, inflationary pressure from increased currency velocity without corresponding production growth, and tax flight when funding requires excessive taxation.
“Universal basic income represents an essential but incomplete solution to the automation displacement problem. Number one, central control. Government administration creates problematic financial dependency and excessive state influence over citizen economic freedom... Next is market distortions. Pure UBI implementation undermines critical price signals by treating recipients identically, regardless of circumstances or location... Next is inflation. Increased currency velocity without corresponding production growth threatens purchasing power uh erosion through inflationary pressure... Next is tax flight. Excessive taxation required for funding uh funding uh UBI risks triggering capital exodus”
Cooperatives generating revenue from carbon sequestration, spectrum licensing, solar power, data centers, and other shared infrastructure can distribute income to members without requiring traditional employment.
“cooperatives, so royalties from carbon sequestration, spectrum, solar, data centers, and other infrastructure cooperatives. All of these all exist.”
Historically, labor dislocation created new jobs elsewhere, but there is no reason those new services and goods must be provided by humans; future new services (experience economy, meaning economy, attention economy) will exist but are likely to be provided by AI, not humans.
“Typically in the past uh labor dislocation has created jobs elsewhere but as I have stated uh in this in in this lecture series and in other places uh just because demand goes up or there's hypothetical uh capital capital that has been liberated for other things. There's not really any reason that those new services and goods must be provided by humans...just because we didn't have automation...in the future though, we can expect wages to go down dramatically. Um, there's still going to be plenty of things. The experience economy, the meaning economy, uh, attention economy, all of those are probably going to stick around.”
The principle of subsidiarity—pushing all decisions to as local as possible—is one of the cornerstones of post-labor economics, including economic decisions, because local governance fosters accountability and trust when residents receive economic benefits.
“Local governance fosters accountability and trust when residents receive economic benefits as county officials live alongside constituents affected by their their decisions. This is the primary principle of subsidiarity which is push all the decisions out to as local as you can and this includes economic decisions which is one of the cornerstones of post labor economics.”
The 2008 Great Recession demonstrated that when unemployment becomes severe, mass foreclosures occur, destroying asset values and creating a vicious cycle where 'nobody wins' and recovery becomes difficult.
“This is what we saw during the uh great recession, the 2008 great recession was that foreclosures went up. Um, and that's not nobody wins in that situation. Um, so that's what we want to avoid as well.”
Strong private property rights form the foundation of all economically successful nations and must be expanded to include more citizens; the goal is 'solar punk future where you own everything' in contrast to 'you will own nothing and be happy'.
“Strong private property rights form the foundation of all economically successful nations and must be expanded to include more citizens. We want to double down on property rights...I'm literally saying the opposite of you will own nothing and be happy. This is a solar punk future where you own everything.”
Aggregate demand is the total purchasing power that consumers are willing and able to spend in the economy on an annual or quarterly basis, and it is a key metric that must be maintained to prevent economic collapse when wages decline due to automation.
“modern economic systems fundamentally rely on widespread consumer purchasing power to drive production, innovation and growth... From a macroeconomic policy, from a national policy perspective... At the national level, you just want to say how much money are consumers willing and able to spend in the economy on an annual or quarterly basis. And so if jobs go down, aggregate demand goes down. And that is one of the key metrics that is measured and tracked to keep the economy running.”
In the current U.S. economy, approximately 60% of aggregate consumer demand comes from wages, 20% from property asset ownership (dividends, rents, capital gains), and approximately 19-20% from government transfers (retirement, unemployment, SNAP, Medicare, Medicaid).
“Labor comp compensation constitutes appro approximately 60% of total consumer demand in the current economy. Property asset ownership generates roughly 20% of consumer purchasing power through dividends, rents, and capital gains transfers. Government dispersements accounts for approximately 19% of customer spending through retirement, unemployment, SNAP, and other entitlement programs.”
Sovereign and community wealth funds (public endowments that generate returns for citizens without relying on wage income) are a viable mechanism for post-labor economies, and proposals exist to create a national U.S. sovereign wealth fund of approximately $5 trillion, which would generate a few hundred to a few thousand dollars per citizen per year.
“sovereign and community wealth funds create public endowments generating returns for citizens without relying on wage income. These also exist. Um, there's actually a proposal right now of creating a national sovereign wealth fund here in America. I don't know if it's going to get created, but I think the number that they were floating was something like 5 trillion, which sounds like a lot, but that's only going to generate, you know, a few hundred to a few thousand per citizen per year.”
Automation impact has been underestimated because previous automation (tractors, manufacturing) was visible and localized; AI and robotics are both invisible (software running on existing hardware) and distributed (affecting all sectors simultaneously), making total displacement harder to perceive but more severe.
“That has always happened. Same reason that we don't have that many farm hands anymore is because modern combines, you know, John Deere replaces literally millions of of man-hour worth of of labor... So that's that has been the nature of automation. It's just now automation is getting more intelligent. Um and also automation is taking our form factor not just the shape of a tractor. Automation is going to take the shape of human bodies where they're going to be more dextrous, more agile, stronger, and be able to work around the clock.”
Accidental government check cutoffs (e.g., dead person fraud) occur regularly in social security systems, demonstrating risk of financial patient status where single bureaucratic entity controls entire economic fate.
“First and foremost, you do not want to put all your eggs in one basket. And you do not want to be a financial patient of the government. Just look at how, you know, when someone accidentally gets their checks cut off and the government is too slow and too incompetent to say, 'Oh, well, someone filed it wrong and here's here's a death certificate that says that you died, so now you're actually committing fraud.' Um, and this happens all the time, by the way, with social security checks.”
The Alaska Permanent Fund and Norwegian Sovereign Wealth Fund are constitutional, well-tested trust structures based on citizenship/residency with no buy-in required; establishing similar trusts could distribute returns across broad beneficiary populations.
“Public and private trust structures enable collective ownership of capital assets sharing returns across broad beneficiary populations...The Alaska Permanent Fund, um the Norwegian Sovereign Wealth Fund, all of those are just based on citizen citizenship and residency. No buyin is required. And furthermore, the fact that trusts are very well tested. They're they're they're constitutionally sound. the governance is is well understood. We have established best practices.”
Cooperatives can generate revenue through royalties from carbon sequestration, spectrum allocation, solar, data centers, and other infrastructure, creating distributed ownership and income without wage labor.
“cooperatives, so royalties from carbon sequestration, spectrum, solar, data centers, and other infrastructure cooperatives. All of these all exist.”
Counties can leverage existing property records, tax assessment systems, residency verification infrastructure, and dividend dispersement mechanisms without building new systems from scratch.
“existing infrastructure implementation leverages established county systems for property records, tax assessment, residency verification, and dividend dispersement without building from scratch.”
Government bureaucratic incompetence with entitlements creates risk of accidental check cutoffs and false death claims that force recipients into fraudulent situations; citizens should not be entirely dependent on single government source for economic survival.
“when someone accidentally gets their checks cut off and the government is too slow and too incompetent to say, 'Oh, well, someone filed it wrong and here's here's a death certificate that says that you died, so now you're actually committing fraud.' Um, and this happens all the time, by the way, with social security checks. Um, so you do not want central control where a where an apathetic, incomp incompetent, slowmoving bureaucracy is responsible for your entire economic fate.”
Tax flight response: higher taxation for UBI funding triggers capital and talent migration to favorable jurisdictions; proposed global solutions include global wealth fund so billionaires pay taxes regardless of geography.
“Excessive taxation required for funding uh funding uh UBI risks triggering capital exodus and talent migration for more favorable jurisdictions. the more taxes you pay, the more acutely you are aware of and trying to optimize your tax havens. Um, so uh in some of the conversations that uh that are that are having and that we're that are going to continue is some of this has to actually be a global solution so that you pay taxes anywhere. Um, some of the things that people are proposing is a global wealth fund so that wherever you go, if a billionaire leaves America and goes to Europe or Australia or somewhere else, they're still going to be paying taxes to a global wealth fund.”
Market-based solutions offer superior alternatives to centrally planned systems for post-labor distribution because they preserve economic agency and distribute ownership broadly while aligning with established economic frameworks.
“Market-based approaches offer superior alternatives to centrally planned systems while preserving economic agency in a post labor world. These solutions align with established economic frameworks while distributing ownership broadly across the population.”
Universal basic income is necessary but not sufficient for post-labor economics; it requires substantial tax increases to fund and creates four major problems: (1) central control via government creates dependency and bureaucratic fragility, (2) identical treatment ignores cost-of-living variation and location, (3) increased currency velocity without production growth causes inflation, (4) excessive taxation drives capital and talent exodus.
“Universal basic income represents an essential but incomplete solution to the automation displacement problem. Providing a minimum economic floor while requiring substantial tax increases to fund implementation...Number one, central control. Government administration creates problematic financial dependency...Next is market distortions. Pure UBI implementation undermines critical price signals by treating recipients identically...Next is inflation. Increased currency velocity without corresponding production growth threatens purchasing power...Next is tax flight. Excessive taxation required for funding uh funding uh UBI risks triggering capital exodus”
Decline of unionization in America over the past century was driven by neoliberal ideology hostile to unions, as unions distort markets; this mirrors broader shift away from labor rights toward property rights and market-based mechanisms.
“labor rights or union unions in particular distort the market a little bit and neoliberalism specifically said became more hostile to unions. Um so we have a right to work paradigm right now”
Employee Stock Ownership Plans (ESOPs) allow workers to receive shares at discount as partial wage; the speaker previously participated in Cisco ESOP receiving 20% immediate income boost by contributing salary to discounted shares.
“There's all kinds of ways that you can create stock options. So uh first is an ESOP which is an employee stock option plan. So if you work somewhere you can take part of your wages um in the form of of shares. I did this when I worked at Cisco and it was great uh because Cisco kept a pool of shares and would give them to you at a discount every I think it was every quarter or every month. So I put like 20% of my my salary towards shares which I then got at a discount. So it was like an immediate 20% boost to my income.”
Labor compensation constitutes approximately 60% of total consumer demand in the current US economy; property asset ownership generates roughly 20% through dividends, rents, and capital gains; government transfers account for approximately 19% through retirement, unemployment, SNAP, and other entitlements.
“The current distribution heavily relies uh heavily favors wages that would be dramatically reduced through automation displacement. So those three buckets are wages. Labor comp compensation constitutes appro approximately 60% of total consumer demand in the current economy. Property asset ownership generates roughly 20% of consumer purchasing power through dividends, rents, and capital gains transfers. Government dispersements accounts for approximately 19% of customer spending through retirement, unemployment, SNAP, and other entitlement programs.”
Prime-age workers (25-54) derive most of their income from wages; only when older, born rich, or disabled do property and transfers constitute larger portions; this varies by county with poor rural counties having up to 30% transfers while rich high-tech counties have lower transfers and higher property/wages.
“If you're a prime age worker, which is 25 to 54, there is a good chance that the majority of your income, your your purchasing power comes from wages. Um, it's only once you get older or if you're born rich or whatever that more will come from property...poor rural counties will have up to 30% transfers, sometimes a little bit more, whereas rich high-tech counties will have very very low property or sorry, very low transfers and higher property and wages.”
Human labor remaining vulnerable to automation includes not only knowledge work (keyboard, video, mouse jobs) but also skilled trades such as electricians and plumbers, which will become automated in the late 2030s when robotics capabilities mature and scale.
“skilled labor such as electricians and plumbers once robots really take off in the late 2030s uh mid to late 2030s all of those jobs are going to be vulnerable as well.”
Adoption curves for new software technologies show saturation from introduction to 80-90% market penetration takes 7-8 years; computer-using agents are in year one (as of 2025), meaning ~2031-2033 most companies will have replaced keyboard-video-mouse workers with AI agents.
“adoption curves are about seven to eight years from uh an introduction of a new technology to 80 to 90% saturation. So this is year one of computer using agents...that means that it's like at the ground floor right now. And that means that in seven to eight years, so about 2031, 2032, 2033, we're going to be at 80 to 90 plus percent saturation, meaning uh every company that that can do KVM jobs...will be have very few employees doing those jobs.”
The highest unemployment during the Great Depression was 25-28%, which was catastrophic; even 20-30% unemployment from automation would be similarly or more catastrophic, and this is a realistic possibility.
“I think the highest unemployment we saw during the Great Depression was 25 to 28%. And that was catastrophic. So if we get to 20% unemployment, that's nearly that's I mean that would all already be catastrophic to most people, but we're looking at 30 to 40% unemployment as a as a very real possibility due to artificial intelligence and robots.”
Market-based solutions are superior to centrally-planned systems; post-labor economics prioritizes decentralized, distributed methods over government-directed approaches.
“you want as little government intervention as possible. So marketbased solutions is one of the primary goals of post-labor economics is finding decentralized distributed uh methods. So market-based approaches offer superior alternatives to centrally planned systems while preserving economic agency in a post labor world.”
All four primary economic stakeholders (consumers, businesses, government, banks) share aligned incentives to prevent economic collapse despite businesses wanting to eliminate labor, creating a systemic coordination problem rather than simple opposition.
“when you look at the incentive structure for these four primary pillars, you can see that everyone wants the economy to keep going, but businesses also want to fire all their all of their employees as soon as they can”
Property is the new coordination mechanism replacing wage labor social contract; economic agency shifts from labor negotiation to consumption choices ('voting with wallet'), geography, and shopping preferences.
“The coordination mechanism. New frameworks must replace wage, labor, social contract as automation eliminates traditional employment relationships. Property is the new coordination mechanism. You vote with your wallet and also your zip code and your shopping cart.”
Businesses face a fundamental paradox: they want zero employees to lower costs while simultaneously needing customers with sufficient purchasing power to buy their products, which requires those customers to have income.
“Businesses face the paradox of wanting zero employees to lower costs while needing customers with sufficient purchasing power. This is where the fundamental paradox breaks down is that if you fire everyone, if every company fires everyone and replaces them with AI and robots, then none of your consumers or none of your customers have any money left.”
The fundamental problem of post-labor economics is distribution: how to allocate purchasing power without traditional wage mechanisms when machines generate economic value. Currently, wages are the primary distribution mechanism via labor markets where people find the most valuable work they can perform.
“The fundamental problem is distribution. The core challenge involves allocating purchasing power without traditional wage mechanisms when machines generate in uh economic value. Right now the primary distribution mechanism is you find work. So like the the the decentralized distributed social hive mind of humanity...you're trying to find work. So there's the labor market...you find the most valuable job that you can do.”
Economic agency represents an individual's capacity to shape their financial destiny through established rights and social mechanisms, comprised of three pillars: labor rights (right to work and organize), property rights (ownership and wealth accumulation), and voting rights (democratic participation in economic policy).
“economic agency represents an individual's capacity to shape their financial destiny through established rights and social mechanism...There are three primary categories of economic agency in modern civil societies. Number one is labor...Number two is property rights...The third pillar is voting rights.”
Political stability and election outcomes in democracies are primarily determined by 'kitchen table economics'—how well the economy is treating ordinary consumers—rather than by policy positions or ideological debates.
“it's what has determined most of the outcomes of elections is uh kitchen table economics. Basically how well the economy is treating consumers really determines the uh the voting temperature if you could if you want to say it that way in America.”
Customer equity programs function similarly to loyalty programs or credit card rewards, but instead of immediate cash back, customers accumulate fractional shares in the company; this is similar to how retailers currently offer rebates, but applies property ownership rather than discounts.
“every time you you spend, you get more. And then so then you get dividends on those shares over time. So the the longer you patronize, it's like a kickback program or a rewards program. You know, you get a Target card, you get a rebate, right? You get a five you sometimes you get $5 back immediately. It's that kind of thing, but instead of just immediate cash back, you get shares.”
Economic agency is an individual's capacity to shape their financial destiny through established rights and social mechanisms, and it is threatened by automation eliminating traditional pathways to economic participation.
“Economic agency represents an individual's capacity to shape their financial destiny through established rights and social mechanism. This foundational concept faces unprecedented disruption when automation eliminates traditional pathways to economic participation.”
Counties are the ideal scale for implementing and testing post-labor economic policies because they are small enough to avoid gridlock yet large enough to generate meaningful economic data; there are approximately 3,100 counties in the United States providing many test beds.
“Counties are small enough to implement changes without gridlock yet large enough to generate meaningful economic data and serve as scalable models. Um they also control the most uh uh uh zoning uh information... Um, I'm just recommending that we start with counties just because they're small. There's many of them. Um, and they're going to be there's going to be a lot more flexible uh testing.”
Banks will become the primary economic touchpoint and relationship for citizens in post-labor economies, replacing employers as the central institution that manages property portfolios, dividend collection, investment decisions, compliance, and identity verification.
“your relationship with your bank or banks will replace your relationship with your employers. Um, so first and foremost, banks are userfriendly. One of the m one of the main concerns that I've I've seen percolating up is Dave, everything that you're proposing sounds great, but it sounds so complex, not everyone is going to be able to management. And I absolutely agree, which is why it should be managed through your bank.”
The challenge of how poor citizens without initial purchasing power can buy into new property-ownership schemes mirrors the historical solution of collective bargaining for labor rights: unions aggregated worker power; in post-labor economies, banks and counties should aggregate citizen purchasing power to collectively acquire assets.
“In the same way that unions allowed for collective bargaining of labor rights, your bank, your credit union, and your county will allow for collective purchasing power so that you can punch above your weight and say, 'Hey, we want to build a world-class solar farm or data center or something else in this county.'”
UBI should not be funded exclusively or primarily by the federal government; multi-level UBI (from cities, counties, states, and federal government) is preferable because it diversifies funding sources, allows for cost-of-living adjustment, and avoids over-dependency on a single institution.
“One of the one of the oversightes that I see out there in the conversations is that UBI must be a federal thing or a global thing. But when you look at some of the experiments being done, there are UBIs that are being uh trial at the municipal, state, and federal levels. Um, so what you what that can do is you you might actually ultimately end up getting UBI checks from your city, from your county, from your state, and your federal government, which is better because you're not getting it all from one place”
Experience economy, meaning economy, and attention economy sectors will likely persist and employ humans in post-labor economies because humans intrinsically find human interaction more rewarding than interaction with machines.
“The experience economy, the meaning economy, uh, attention economy, all of those are probably going to stick around. Humans just intrinsically find humans interesting, and we find interactions with humans to be more rewarding”
Post-labor solutions require a portfolio of 16+ complementary interventions rather than any single mechanism, and these interventions accumulate and compound over time to generate meaningful economic returns.
“as many of you will point out, a trust alone doesn't really make that big of a difference if it only pays out, you know, $1,000 a year or $2,000 a year, but when you have a portfolio of many of these interventions, like I said, I've got a list of 16 interventions, they add up and they also accumulate and compound over time.”
Companies could pay corporate taxes in the form of non-voting, dividend-generating shares given to community wealth funds, creating a property distribution mechanism that does not dilute voting control for existing shareholders.
“a company could pay some of their taxes their corporate taxes in the form of shares uh uh given to wealth funds particularly non- voting dividend generating shares would be the ideal way to go”
Employee Stock Option Plans (ESOPs) and customer equity programs (which allocate fractional shares based on purchases rather than wages) can distribute property ownership, but their effectiveness depends on either employment existing (for ESOPs) or customer participation (for equity programs), making them insufficient if employment disappears entirely.
“there's all kinds of ways that you can create stock options. So uh first is an ESOP which is an employee stock option plan... if wages go away, if if employment goes away for most cases, then that's not really an option on the table. So then another another few options are one is a customer equity program, which is basically um you add on like a a one to four or 5% sales tax. And so every time you you purchase something from uh from a store um you actually get a fractional share.”
Property is the new coordination mechanism replacing the wage-labor social contract; citizens vote with their wallet, zip code choices, and shopping cart rather than through labor market participation.
“New frameworks must replace wage, labor, social contract as automation eliminates traditional employment relationships. Property is the new coordination mechanism. You vote with your wallet and also your zip code and your shopping cart.”
Labor substitution happens when a machine simply replaces a human one-to-one, as distinct from creative destruction which involves creating new industries; historical example: farm tractors and machinery destroyed farm labor but created the tractor industry.
“labor substitution is what happens when a machine simply just replaces a human one to one. All right...it's also called creative destruction, although that's more about you create a new industry by destroying an old one. Um, so for instance, tractors and and uh farm automation and farm machinery destroyed the old way of doing farms”
Alternative ownership structures must expand dramatically to maintain economic agency when wages collapse; property-based income should increase from 20% to 60% of consumer purchasing power, with multiple proven models available: trusts, wealth funds, stock options, customer equity programs, cooperative structures.
“Alternative ownership structures must expand dramatically to maintain economic agency when wages collapse...Numerous proven models exist to distribute asset ownership broadly across the population.”
Customer equity programs add 1-4% sales tax where purchases generate fractional shares for customers; over time, customers receive dividends. This is similar to loyalty programs but builds equity rather than providing immediate cash back.
“one is a customer equity program, which is basically um you add on like a a one to four or 5% sales tax. And so every time you you purchase something from uh from a store um you actually get a fractional share. And so every time you you spend, you get more. And then so then you get dividends on those shares over time.”
Companies could pay corporate taxes partially in shares (non-voting dividend-generating shares) to wealth funds, creating wealth fund capitalization without cash drain; this is superior to paying taxes in cash from efficiency perspective.
“another one is where you'd have transfer ownership um via taxes. So basically uh a company could pay some of their taxes their corporate taxes in the form of shares uh uh given to wealth funds particularly non- voting dividend generating shares would be the ideal way to go.”
Collective purchasing power through counties and banks enables individuals to aggregate resources and acquire meaningful ownership stakes; this solves the buy-in problem for poor citizens (if you don't have capital, join a collective to punch above your weight).
“Participatory ownership. Collective purchasing power through counties and banks enables individuals to aggregate resources and acquire meaningful ownership stakes...In the same way that unions allowed for collective bargaining of labor rights, your bank, your credit union, and your county will allow for collective purchasing power so that you can punch above your weight and say, 'Hey, we want to build a world-class solar farm or data center or something else in this county.'”
As labor income diminishes, the relationship with banks will replace the relationship with employers as primary economic touchpoint; banks will become the central hub of post-labor economic ecosystem providing critical infrastructure.
“Banks serve as the central hub of the post labor economic ecosystem, providing critical infrastructure and services. Financial institutions from local credit unions to international centers will become your primary economic touch point as labor income diminishes. In other words, your relationship with your bank or banks will replace your relationship with your employers.”
UBI does not have to be federal; it can be implemented at municipal, state, and federal levels simultaneously, allowing recipients to receive UBI checks from city, county, state, and federal government. This distributed approach is superior because it avoids single-point dependency and allows cost-of-living adjustment.
“UBI does not have to come from federal. One of the one of the oversightes that I see out there in the conversations is that UBI must be a federal thing or a global thing. But when you look at some of the experiments being done, there are UBIs that are being uh trial at the municipal, state, and federal levels. Um, so what you what that can do is you you might actually ultimately end up getting UBI checks from your city, from your county, from your state, and your federal government, which is better because you're not getting it all from one place, and it can be uh adjusted to the cost of living to your particular city or state”
Banks solve KYC (Know Your Customer) identity verification; crypto/blockchain solutions to proof-of-humanity are solving problems that don't exist because banks have proven identity solutions; crypto tokens may serve as additional layer atop banking infrastructure.
“Know your customer. Banks provide established solutions for identity management, security, privacy and compliance that emerging tech technologies like blockchain and Dows have yet to solve effectively. So basically proof of humanity. Sam Alman is trying to is trying to solve this problem that doesn't really exist with his world coin orb thing. Um nobody cares, right? The banks don't really care. Uh banks have ways of establishing your identity.”
The invisible hand of market rational self-interest (individuals finding best available jobs) works as distribution mechanism only when labor scarcity persists; replacement distribution mechanism needed when labor becomes abundant.
“the invisible hand of the market is rational self-interest where hey I don't want to starve and I don't want to lose my house so let me go find the best job that I can do and the best job that's out there that I can do is someone needs me to do something right? So if that distribution problem breaks down, we need a replacement distribution mechanism.”
Counties directly own revenue-generating assets including land, utility franchises, infrastructure easements, and zoning authority that can feed community endowment funds.
“Economic asset control. Counties directly own valuable revenue generating assets including land, utility franchises, infrastructure easements, and zoning authority that can feed community endowment funds.”
Property accumulation creates compounding flywheel where reinvestment of dividends generates growth over time; speaker modeled these dynamics and will discuss in future lectures on KPIs.
“the more property you have, you end up starting up a flywheel where the investments and the reinvestments from those compound over time. Now, I have modeled this and we'll talk about this more in the modeling and measurements and KPI in the future lectures”
Counties provide the ideal governing scale for implementing post-labor economic initiatives because they are small enough to avoid gridlock and implement changes, yet large enough to generate meaningful economic data and serve as scalable models.
“Counties are small enough to implement changes without gridlock yet large enough to generate meaningful economic data and serve as scalable models.”
Stimulus checks distributed during the pandemic were popular but also contributed to inflation; combined with supply chain disruptions, pandemic stimulus spending is a cautionary example of unintended inflationary consequences from direct payments.
“This is one of the things that we saw with the uh the stimulus checks that went out with um during the pandemic is they were very popular but they also did cause some inflation. Now we also know that some of the inflation was due to uh other distortions such as shipping problems... the pandemic inflation was complicated but certainly uh you know spending trillions of dollars on stimulus checks was a part of it.”
Computer-using agents (software AI) will reach 80-90% adoption saturation in 7-8 years, meaning by 2031-2033 most companies will have replaced employees doing keyboard-video-mouse (KVM) jobs with AI agents, while robot adoption will be slower due to higher marginal costs.
“adoption curves are about seven to eight years from uh an introduction of a new technology to 80 to 90% saturation. So this is year one of computer using agents. Um so that means that it's like at the ground floor right now. And that means that in seven to eight years, so about 2031, 2032, 2033, we're going to be at 80 to 90 plus percent saturation, meaning uh every company that that can do KVM jobs, that's keyboard, video, mouse jobs, um will be have very few employees doing those jobs.”
Labor rights may become economically moot or irrelevant if automation and AI eliminate employment opportunities entirely, regardless of workers' desire to work or their skills.
“labor rights might become irrelevant. It might become a moot point if nobody's willing to hire you because of automation, because of AI, robots. Uh globalization and offshoring was has been the biggest threat. Immigration has also been a big threat for the last few decades. Now there's a new threat to to jobs.”
The government perspective on the economy prioritizes maintaining tax revenue, demographic stability, and geopolitical position while providing minimal market intervention, but this breaks down when citizens are unemployed and geopolitical competition requires economic viability.
“the government's perspective wants to maintain tax revenue, demographic stability, and geopolitical position while providing minimal market intervention. That's what the government wants. However, if uh all of your citizens are unemployed, guess what? The citizens are going to rise up.”
Banks have inherent incentive alignment with customers because deeper community investment and customer financial success directly benefits banks through business generation and retained deposits.
“banks particularly local institutions have inherent motivation to adopt post-labor economic models as they benefit directly from customer financial success through deeper community investment”
Voluntary adoption: most effective solutions naturally attract stakeholders through mutual benefit rather than mandate; government mistakes when imposing solutions by force; nuanced approach creates voluntary options reducing market distortion.
“Voluntary adoption. The most effective solutions must naturally attract all stakeholders, banks, businesses, governments, and consumers through mutual benefit rather than mandate. One of the biggest mistakes that governments could make is doing a lot of this through force...the the finesse, the nuanced approach is going to be creating options that are voluntary um and organic.”
Local banks have inherent motivation to adopt post-labor economic models because they benefit directly from customer financial success through deeper community investment; incentive alignment between local banks and customers ensures long-term adoption.
“banks particularly local institutions have inherent motivation to adopt post-labor economic models as they benefit directly from customer financial success through deeper community investment. So uh incentive alignment between you and your local bank will ensure that they actually want to adopt these policies in the long run.”
A trust paying $1,000-$2,000 annually makes little individual difference, but when combined with a portfolio of 16 different interventions, they accumulate and compound over time to create meaningful property income.
“a trust alone doesn't really make that big of a difference if it only pays out, you know, $1,000 a year or $2,000 a year, but when you have a portfolio of many of these interventions, like I said, I've got a list of 16 interventions, they add up and they also accumulate and compound over time.”
Property rights are the foundational requirement for economically successful nations and must be expanded to include more citizens in post-labor economies, the opposite of 'you will own nothing and be happy'—this is instead a 'solarpunk future where you own everything' with elites and government owning less.
“Strong private property rights form the foundation of all economically successful nations and must be expanded to include more citizens. We want to double down on property rights. We not go the other way where you will own nothing and be happy. I'm literally saying the opposite of you will own nothing and be happy. This is a solar punk future where you own everything. Um and the elites own less bas and and certainly the government owns less.”
Banks can offer certificate of deposit (CD) accounts with returns of 3-5% annually currently, but this return should increase to 8-12% annually to make property-based income generation attractive relative to wage income.
“you can get a CD account which will pay like I don't know 3% per year but we need to get that up to like 8 to 12% per year”
The stimulus checks issued during the pandemic were popular but contributed to inflation; inflation was complicated (shipping problems, supply disruptions) but stimulus spending was part of it.
“This is one of the things that we saw with the uh the stimulus checks that went out with um during the pandemic is they were very popular but they also did cause some inflation. Now we also know that some of the inflation was due to uh other distortions such as shipping problems...spending trillions of dollars on stimulus checks was a part of it.”
Elon Musk's concept of 'universal high income' is not reliable policy guidance because Musk is not a banker or governance expert, despite his prominence as a technologist and entrepreneur.
“I know some people are like what about what Elon Musk said with universal high income? Elon Musk is not a banker and he's also not a governance expert. So take everything Elon Musk says about UHI with a grain of salt.”
Banks currently provide conservative returns (CDs at ~3% annually) but post-labor economics requires they increase returns to 8-12% annually to meet property income targets.
“You can get you can get a CD account which will pay like I don't know 3% per year but we need to get that up to like 8 to 12% per year.”
In response to a hypothetical objection that 'I didn't sign no social contract,' Shapiro argues this misses the point: the social contract is an implicit agreed-upon paradigm where labor, property, and voting rights form the framework within which society operates.
“There was a very silly comment on the first lecture that said I didn't sign no no social contract missing the point anyways the social contract effect basically is the implicit or explicit agreed upon paradigm”
Jeremy Clarkson (age ~70) can operate a Lamborghini tractor to perform the work of hundreds of human man-hours, demonstrating that modern agricultural automation has already achieved massive labor productivity improvements.
“modern combines, you know, John Deere replaces literally millions of of man-hour worth of of labor, and you can just have Jeremy Clarkson up on his big Lamborghini tractor, do hundreds of of human man-hour worth of labor from his tractor, and he's like 70s something years old, right?”
Democratic participation enables citizens to elect new leaders (president, prime minister) and change economic policy relatively quickly; liberal democracies elect leaders every four years with staggered elections creating multiple governance tiers.
“One of the most remarkable things about liberal democracies is that we can elect a new uh a new you know head of state whether it's a president or prime minister or whatever. Um and so we can change the economic uh temperature...relatively quickly uh in in democratic societies generally every four years um then of course you have staggered uh midterm elections”
By 2024, post-labor economics should be on an upward trajectory where citizens receive equivalent of $120,000 per year in today's dollars without doing any work.
“By the time postlabor economics is fully implemented, by around 20 240, I hope um we'll be on an upward trajectory where you'd be getting the equivalent of $120,000 per year without doing anything um in today's dollars.”
UBI funding models may require global coordination to prevent tax flight; proposals include global wealth funds where billionaires pay taxes to a global fund regardless of their location, though this remains hypothetical and contentious.
“some of this has to actually be a global solution so that you pay taxes anywhere. Um, some of the things that people are proposing is a global wealth fund so that wherever you go, if a billionaire leaves America and goes to Europe or Australia or somewhere else, they're still going to be paying taxes to a global wealth fund. This is just a hypothetical. I don't know if that's a good idea”
Intellectual property, patent law, copyright law, and other IP protections are necessary for innovation and market progress in modern liberal democracies.
“The ability to create intellectual property, the ability to to sell goods and services and to have ownership of those items or even some of those ideas through patent law. This is absolutely necessary for uh for a modern liberal democracy to function. It is absolutely necessary for innovation and market progress.”
Consumers today consist of approximately 148-160 million households in America, each requiring purchases of electricity, goods, computers, internet services, and food, making aggregate demand the sum of this household consumption.
“in America there's like 148 million or 160 million households. Every household needs to buy electricity, goods, computers, internet services, food, all of that. So that is what we call aggregate demand.”
Property rights are the foundation enabling progress and liberal democracy; the book 'Why Nations Fail' extensively documents this principle.
“If you read the book Why Nations Fail, they really really go into property rights as the cornerstone of progress.”
Unions were good for quality of life but bad for economic efficiency in the grand scheme; the speaker's utopian goal is a world where unions are irrelevant (not because they're destroyed but because labor is no longer the primary distribution mechanism).
“While unions are really good for quality of life, they're very bad for economic efficiency in the grand scheme of things. It's a complicated story. I'm neither pro nor against union. They have served a purpose, but honestly, I just want to get away from work. So, I I want I want to get to a place where unions are irrelevant.”
Humans intrinsically find interactions with other humans more rewarding than machines, so experience economy, meaning economy, and attention economy services provided by humans will persist; however, this will be a minority of total economic activity.
“Humans just intrinsically find humans interesting, and we find interactions with humans to be more rewarding, unless you're ultra autistic, like some of us, and I prefer to interact with machines.”
Individuals should prefer to interact with banks rather than dealerships for purchases like cars because personal interactions with car dealerships are deliberately adversarial and unpleasant, unlike banking relationships.
“Ask me about when I had to buy a new car from a car dealership. It was the worst experience that I've had all year.”
Elon Musk proposed 'universal high income' as alternative to UBI, but Musk is not a banker or governance expert and his proposal should be taken with skepticism.
“I know some people are like what about what Elon Musk said with universal high income? Elon Musk is not a banker and he's also not a governance expert. So take everything Elon Musk says about UHI with a grain of salt.”
The speaker has identified 16 different interventions for creating property-based distribution; these are documented in a blog post and discussed in detail elsewhere.
“I've been doing some work on this and I actually have a blog post link above or below or wherever um where I've got 16 different interventions um that can be employed that require various levels of buyin.”
Future lecture (Episode 3) will address measurements and KPIs: what metrics indicate vulnerability to post-labor disruption, readiness for transition, and correctness of implementation.
“Episode three or lecture three will be about measurements and KPI. What do you measure? Um uh how do you know if you're vulnerable for for post labor economics? How do you know if you're ready? How do you know if it's going right? So on and so forth.”