Instead of a universal productivity boom, AI will eliminate repetitive white-collar jobs. This will shrink the consumer base, reducing overall demand and creating a powerful deflationary force, further entrenching a feudal economic structure with fewer 'lords' and more 'serfs.'

The potential for an AI-driven, post-capitalist world of abundance is real. However, the path there will likely be as destructive as a world war, as the rapid upending of the economic order will throw society into chaos before stability is achieved.

An initial era of AI-driven superabundance will eventually end as the machine economy hits new resource limits (e.g., land, energy). At this point, the opportunity cost of allocating resources to "unproductive" legacy humans will skyrocket, and they will be outcompeted by more efficient virtual beings.

The advent of super-intelligent AI challenges the core tenets of free-market capitalism. When human labor competes against entities that are exponentially more capable, the 'creative destruction' model could lead to mass unemployment and social instability, forcing a move away from pure capitalism.

For current AI valuations to be realized, AI must deliver unprecedented efficiency, likely causing mass job displacement. This would disrupt the consumer economy that supports these companies, creating a fundamental contradiction where the condition for success undermines the system itself.

Emad Mostaque argues that as AI makes intelligence abundant (e.g., free expert medical advice), our economic system, which is built on scarcity, interprets the resulting job displacement and disruption as poverty, even if overall well-being improves.

As AI gets exponentially smarter, it will solve major problems in power, chip efficiency, and labor, driving down costs across the economy. This extreme efficiency creates a powerful deflationary force, which is a greater long-term macroeconomic risk than the current AI investment bubble popping.

Capitalism values scarcity. AI's core disruption is not just automating tasks, but making human-like intellectual labor so abundant that its market value approaches zero. This breaks the fundamental economic loop of trading scarce labor for wages.

Beyond automating tasks, Emad Mostaque's "Intelligence Theory" suggests AI's deepest impact is shifting the foundational axiom of economics. Instead of scarcity, the new core principle is persistence: how complex systems (like firms or AIs) maintain themselves by accurately modeling and predicting reality.