AI Economic Simulation

Baseline Assumptions

• No global war that resets labor demand
• Governments respond slowly (no immediate universal basic income)
• AI productivity gains are real and accelerating
• Ownership of AI systems is highly concentrated
• Blue-collar automation lags white-collar by 5–10 years
• Capital markets remain functional

10-Year Simulation

Years 1–2: Invisible Collapse

• AI commoditizes analysts, junior lawyers, coders, marketing, finance ops, HR
• Teams shrink quietly by 20–40%
• Job titles remain; wages and leverage collapse

GDP appears healthy. Careers quietly break.

Years 3–4: Demand Shock

• White-collar consumption declines (housing, travel, subscriptions)
• Urban real estate weakens
• Universities lose value proposition
• Venture capital concentrates almost entirely in AI

Years 5–6: Structural Break

• White-collar work becomes task-based and gig-like
• Salaries detach from productivity
• AI firms dominate equity markets
• Tax base erodes; welfare demand rises

The belief that education guarantees mobility collapses.

Years 7–8: Social Repricing

• Luxury and automation boom; mass-market stagnates
• Underemployment explodes despite stable headline unemployment
• Anti-AI movements and protectionist politics intensify

Years 9–10: New Equilibrium or Crisis

Path A: Managed Transition

• Redistribution via AI dividends or sovereign AI funds
• Work redefined around care, creativity, human services

Path B: Depression-Like Breakdown

• Persistent demand collapse
• High unemployment and social unrest
• Capital trapped in AI with insufficient consumers

Comparison to the Great Depression