The Post Labor Legitimacy Problem, A Shaky Floor

Founders ask it as a market sizing problem. Policy people ask it as a program design problem. Twenty year olds ask it with the kind of clarity that only comes from having nothing invested yet in the polite fictions:

If genAI and robotics automate away most labor, what is the point of business if nobody has any money?

Most answers you hear are confident. They are also, in the strict sense, not earnest.

Because the real question is not about “jobs.” It is about whether the loop that underpins the entire order can close, and whether anyone actually understands the global dynamics well enough to predict what happens when it does not.

I want to be explicit about something up front.

I do not think this is a solved problem. I think a lot of our discourse is a coping mechanism dressed up as analysis. I think many of the models people use are not merely incomplete, they may be the wrong kind of model for the world we are drifting into.

That does not mean we do nothing. It means we stop lying to ourselves about the floor we are standing on.

The first is the revenue loop problem. Market economies run on a loop where production creates incomes, incomes create demand, demand validates production. Wages are not just compensation, they are a stabilizer that makes the loop close. If labor income collapses at scale, you do not just “lose jobs,” you weaken the mechanism that turns output into revenue, and revenue into investment, and investment into more output. You can have warehouses full of goods and still have an economic crisis, because the crisis is not “can we make stuff,” it is “can we make solvent demand without wages.”

The second is the property rights problem. If machines do the producing, who has enforceable claims on the output stream? Who owns the models, the robots, the factories, the compute, the energy, the patents, the payment rails, the identity layer, the distribution channels. Most proposed solutions quietly assume current ownership patterns remain legitimate even when most people are no longer economically necessary. That assumption is not safe. It might fail slowly and bureaucratically. It might fail quickly and violently. But it is not safe.

The third is the scarcity problem. Even if automation makes many goods cheap, some things remain scarce by physics, geography, and politics: land in desirable places, energy when and where you need it, a habitable environment, water, stable food systems, and then the weirder scarcities that organize human life, attention, status, institutional access. Inflation arguments live here. Legitimacy arguments live here. If we talk about “automation” without naming what stays scarce, we end up designing policies that look clean and fail in lived experience.

Money is a claim on reality, but the global monetary system is a claim on a story

People like to say money is a claim on labor. Historically, wage labor has been how most people got money, so the substitution feels intuitive. Analytically, money is a socially enforceable claim on real resources and outputs. In a high automation world, money still buys stuff, it is just that many categories of stuff might get very cheap.

That is the national frame, and it is already complicated. The global frame is where I think the polite economics starts to break down.

So when people say money is a claim on labor. That is the "polite fiction".

Analytically, a currency’s value on the global stage is a claim on a nation’s ability to export things the world actually wants.

Currently, that system works because labor is distributed. Vietnam has cheaper labor than Germany, so Vietnam exports textiles, Germany exports precision engineering, and the exchange rate balances the difference. This is the floor that modern macroeconomics stands on: *Comparative Advantage*.

In a fully automated world, comparative advantage dies.

If a robot in Ohio and a robot in Lagos have the same output per kilowatt-hour, labor costs cease to matter. The only things that matter are: who owns the IP, who generates the energy, and who secures the raw materials.

This turns the "national UBI" conversation into an economic suicide note for most countries. Here is the mechanism: A mid-tier nation decides to print a monthly dividend to keep its population alive. But that nation does not own the AGI models, and it imports its automated machinery and its energy. The citizens take their new dividend and immediately spend it on goods and services produced by foreign IP and foreign capital.

The money doesn't circulate locally; it flees. It hits the currency markets as massive sell pressure because the importers need dollars or yuan to pay for the automated goods. So: The domestic currency collapses, the cost of imports skyrockets.,the dividend becomes worthless paper in a month.

You cannot print claims on someone else’s robots.

This is why "Global Macro" breaks. Our current models assume that stimulating domestic demand stimulates domestic production. In an automated world, stimulating demand in a non-sovereign nation merely stimulates a balance-of-payments crisis. Unless a nation achieves "full stack" autonomy: energy, compute, models, and raw resources, it loses the ability to conduct independent monetary policy. It becomes a vassal state, not politically, but mathematically.

This might not be merely under modeled, it might be a paradigm mismatch. Modern macro, and especially global macro, is built on assumptions that may not hold in a post labor regime, functioning labor markets, wages as the primary distribution channel, state capacity to tax and enforce within borders, relatively stable reserve dynamics, comparative advantage anchored in labor and productivity differences. If those variables stop being the dominant ones, the models may still run, but they may be answering a question that no longer exists.

This is the part where most writing, including mine, tends to wave at “complex global dynamics” and move on.

So lets not move on.

The scarcities

When people talk about “post scarcity,” they usually mean cheap manufactured goods and cheap digital services. That may happen. Doesn't solve anything.

Land and location are the first. You cannot automate Manhattan. But the deeper truth is that “location” is not just dirt, it is an attribute bundle: safety, amenities, schools, hospitals, transit, culture, social status, climate comfort, predictable governance. Some of that is fixed, some of it is manufactured by public goods and competent institutions. The truly scarce thing is high trust, high amenity, high stability places, and in many countries we are actively choosing not to create more of them, via zoning, veto points, procedural paralysis, and a kind of civic nihilism. Automation could intensify this because when work detaches from place, place becomes more purely a consumption and status good. The contest over “good places” becomes the contest over life.

Energy is the second. Automation does not create energy, it consumes it. The constraint is not only total energy, it is deliverable power where and when you need it. Grids, storage, transmission, build rates, materials, maintenance, permitting. If energy becomes a rationing point, the legitimacy fight moves there quickly, and it will not look like a tidy inflation chart, it will look like politics.

A habitable environment is the third. Climate, water, heat, agriculture, sea level rise, these are not problems you solve with a product pivot. Habitability is partially shaped by infrastructure, cooling, water systems, disaster hardening, public health, but the boundary conditions are shifting, and weak capacity regions will fail first. That creates migration pressure, and migration pressure is where the global system reveals itself as zero sum in the short run, even if cooperation would be positive sum in the long run.

This is why I do not buy the shallow version of “UBI will fix it.” If you inject purchasing power without expanding supply or socializing the rents in the bottleneck sectors, the transfer gets eaten by land rents, energy bottlenecks, and other non scalable constraints. People will experience policy as failure even if their consumption of scalable goods improves. You will have abundance in the abstract and strangulation in daily life, and that is a recipe for anger, anger leads of pew pew pew.

Speed is the regime

A lot of writing about automation is time agnostic because it makes the writing durable. It also hides urgency. Ten years versus fifty years changes almost everything.

If displacement happens on a ten year horizon, adaptation time collapses. Institutions cannot retool fast enough. Legitimacy shocks stack before new norms form. Even “good” policy cannot be implemented at the required scale in time, and coercion becomes the default substitute for governance. This is where fragmentation, exclusion, and overt or quiet violence become more likely.

If the transition plays out over fifty years, you get something different. Education systems, the housing stock, infrastructure, migration patterns, and norms can adjust in a series of smaller crises rather than one rupture. That does not guarantee a good outcome, it just changes what is feasible.

The likely reality is multiple clocks. Digital substitution can be brutally fast because software diffuses instantly. Physical substitution is gated by capital cycles, liability, maintenance, supply chains, and the fact that the physical world is adversarial. That means a lopsided transition is plausible, high expectation, high voice white collar work destabilizes quickly, while physical world employment declines more slowly. Politically, that is dangerous. It creates anger before it creates a new settlement.

China

Most Western discourse treats “The West” as the unit of analysis. It is not.

There is a high capacity authoritarian state with massive scale, building AI capacity, deploying industrial policy, and operating with a legitimacy basis that is not primarily electoral. Whether China “solves” some version of post labor stability first, even imperfectly, might become the forcing function for other polities, because governance regimes compete.

If China demonstrates a workable settlement, even a rough one, it creates a model. Other states will copy what works, not because they love the ideology, but because they want stability. If China maintains stability primarily through surveillance and conditional access, it normalizes the template, the “solution” is control. If China fails visibly, it discredits the idea that capacity alone solves this, and the world becomes more unstable because no one has a credible path.

And if geopolitical competition escalates, if trade fragments, if energy and compute become weaponized constraints, the global monetary membrane tears in ways no one can model cleanly. This is a core variable in whether any domestic settlement survives but most people see it as a "china topic".

A few scenarios that feel plausible

I do not think there is a single forecast. I think there are a few magnets, and the system gets pulled toward one depending on speed, scarcity, rents, and state capacity.

Managed decline with better marketing: The long grind, a muddle through where automation is real but diffusion is uneven, institutions patch rather than redesign, and the social order degrades slowly. Think rolling crises, sector by sector displacement, growing precarity, and a patchwork of programs that do not add up to a social net. People call it “normal” because it happens gradually, and then wake up twenty years later wondering why everything feels thinner, trust, public goods, expectations, fertility, ambition.

Next is "fortress patronage" - In a world where automatable goods are abundant, the profit pool migrates entirely to "Enclosure". The goal isn't selling you a product; it is trapping you in an infrastructure you cannot exit. Corporations stop competing on price and start competing on lock-in. You don't buy healthcare, housing, or identity verification; you subscribe to a vertically integrated stack that provides all three, provided you remain a compliant user. The "moat" is no longer brand loyalty; it is the sheer impossibility of surviving outside the walls. The included get stability. The excluded face the raw friction of the unmanaged world. This isn't just "tech monopolies," it is corporate feudalism where your subscription tier determines your civil rights.

The thrid is fragmentation with islands of competence. Some polities capture rents, expand effective supply of housing and energy, and build a legitimacy story around a social dividend plus universal services. Others fail and hollow out. You get prosperous blocs, hard hard to cross geographic borders, and massive pressure at the edges of society. The winners feel moral. The losers feel trapped. The global system becomes less integrated, and local capacity becomes the end state.

Historically, real redesign happens when elites perceive a shared threat to the asset base and to social order. It may not be “global coordination,” it may be bloc level, and it may come with exclusion of non members. But you can imagine a new Bretton Woods style agreement, not out of idealism, out of fear, where key rents are taxed, where some form of broad claim on output is institutionalized, where energy and housing buildout becomes a national priority rather than a talking point. This scenario is less likely without shock, and more likely with it, which is a grim kind of optimism.

There are darker tails, of course, prolonged disorder and long emergence. History’s base rate for major transitions is not smooth. It is messy, multi generational, often violent, and rarely planned. The Roman world did not “solve” its transition. It lived through it.

The point of business?

Businesses do not exist to employ people. They exist to coordinate capital, risk, innovation, logistics, and market making under property rights. That function survives automation.

What changes is the revenue loop. If wages no longer finance mass demand, firms either sell to asset owners, compete prices down toward marginal cost where moats are weak, or they support some mechanism that creates solvent demand, cash transfers, services, social dividends, broad ownership. The ugly fourth option, which is already visible in embryo, is turning people into non monetary customers, attention, data, behavioral compliance, legitimacy, and building patronage ecosystems that convert dependence into revenue.

This is why the question is not “will business still exist.” It is “will business still be primarily about producing value,” or will it become primarily about capturing and defending rents around scarcities and control points.

The meaning problem does not wait its turn

We often treat "meaning" as the soft dessert after the hard meal of economics. This is a category error.

In a post-labor world, "meaning" is a hard security asset. Work organizes time, hierarchizes status, and sublimates aggression. If you remove the structure of work without replacing the containment vessel, you do not get a society of poets.

You get chaos.

Young men without purpose are not a "wellness issue," they are a volatility engine. If the state or the market cannot provide a narrative of utility, a reason why you matter, predatory narratives will fill the vacuum instantly. We will see the industrial scale production of synthetic purpose: gamified nationalism, radicalizing cults, and purity spirals that offer the feeling of a mission.

Legitimacy relies on the population believing the future includes them. If that belief evaporates, the "social cost" isn't depression; it is insurrection. We need to stop viewing meaning as a luxury good for the idle and start viewing it as a riot control structure.

So yes, we can talk about UBI. We can talk about rent capture, land value taxation, resource dividends, antitrust, broad capital ownership, housing supply, energy buildout blah blah blah.... We should.

But we should also admit the deeper reality: a post labor transition is not an economic debate inside a stable order. It is a pressure test of the order itself, including legitimacy, enforcement, and meaning.

And if we are honest, we should say the quiet part plainly. We may be entering a regime where our conceptual tools do not map cleanly onto the dynamics, where the timeline determines whether governance is possible at all, and where the first polity to demonstrate a workable settlement, even an imperfect one, changes what everyone else believes is feasible.

with love,

j.