Artificial General Intelligence and the End of Human Employment: The Need to Renegotiate the Social Contract

TL;DR

This paper discusses how the rise of Artificial General Intelligence (AGI) impacts employment, wealth distribution, and social stability, emphasizing the need to renegotiate the social contract through new economic policies like UBI and progressive taxation.

Contribution

It highlights the economic and social challenges posed by AGI and proposes policy solutions to prevent instability and ensure equitable wealth distribution in a post-labor economy.

Findings

AGI reduces human wages and shifts economic power to capital owners.

Widespread AGI use can lead to wealth concentration and inequality.

Proposed policies include UBI, cooperative ownership, and progressive taxation.

Abstract

The emergence of Artificial General Intelligence (AGI) labor, including AI agents and autonomous systems operating at near-zero marginal cost, reduces the marginal productivity of human labor, ultimately pushing wages toward zero. As AGI labor and capital replace human workers, economic power shifts to capital owners, resulting in extreme wealth concentration, rising inequality, and reduced social mobility. The collapse of human wages causes aggregate demand to deteriorate, creating a paradox where firms produce more using AGI, yet fewer consumers can afford to buy goods. To prevent economic and social instability, new economic structures must emerge, such as Universal Basic Income (UBI), which redistributes AGI-generated wealth, public or cooperative AGI ownership, ensuring broader access to AI-driven profits, and progressive AGI capital taxation, which mitigates inequality and sustains aggregate demand. Addressing these challenges in form of renegotiation the Social Contract is crucial to maintaining economic stability in a post-labor economy.