The decline of white-collar jobs, which form the backbone of discretionary spending and credit markets, will create a contagion effect impacting every asset class worldwide, as the system was built on the assumption of their stability.
Apparent job growth in sectors like healthcare and education is misleading. This growth is primarily fueled by government spending and loan guarantees, not organic market demand, thereby concealing the true fragility of the private white-collar economy.
Initially, consulting firms will see a surge in business as corporations hire them to implement AI. However, this is a short-term boom. In the medium-term, the very AI they install will automate their own core functions, leading to their eventual disruption.
The labor market is a single interconnected system. As AI eliminates white-collar roles, displaced professionals will flood the blue-collar and gig economies, increasing labor supply and creating downward wage pressure across all sectors.
Companies like Uber and DoorDash build moats on customer lock-in. AI agents will eliminate this by automatically price-shopping for users, commoditizing demand. This shifts the competitive battleground to supply-side aggregation, lowering barriers to entry for new players.
The thesis that AI will displace labor, drive down prices, and hollow out consumer demand mirrors Marx's analysis of capitalism. Firms boost profits by replacing labor with machinery, but this ultimately destroys the purchasing power the system relies on.
Many dot-com bubble predictions for frictionless commerce failed because the technology wasn't capable. Today's powerful AI agents represent the maturation of that tech, finally enabling the seamless disintermediation that was envisioned decades ago.