Writing About AI, Economics and Fear

From Economic Law to Political Economy: Rethinking AI and Jobs

A few weeks ago, I wrote an essay on artificial intelligence and employment built around a simple but often misunderstood economic principle: Say’s Law.

My aim was not to deny that technological change can be disruptive. It clearly can. Entire professions may shrink or disappear. Skills that once guaranteed security can suddenly become obsolete. What I wanted to explore instead was a deeper question. Do the fundamental laws of economics stop operating when technology becomes frighteningly powerful?

My answer was no.

If production ultimately creates the means for demand, then innovation does not merely destroy jobs. It also reshapes opportunities. History suggests that while adjustment can be painful, the long-term story of technological progress is not one of mass unemployment but of transformation.

Recently, I was invited to adapt this argument for publication on Mises Wire. The editorial process was illuminating. Writing for a broader audience required sharpening the narrative, simplifying the mechanism, and focusing more directly on the policy implications of technological fear.

And in doing so, I realised that the most interesting part of the AI debate may not be technological at all.

The real uncertainty lies in how societies respond to disruption.

When people worry about robots taking their jobs, they are often expressing a deeper anxiety about instability and loss of control. Political systems tend to respond to these anxieties with interventions designed to slow, manage, or redistribute the effects of change. Yet history also shows that such responses can unintentionally weaken the very adjustment processes that allow economies to adapt and grow.

In this sense, the discussion shifts from pure economic logic to political economy. The question is no longer only whether markets can absorb technological shocks, but whether institutions will allow them to do so. Trust in spontaneous coordination, entrepreneurial discovery, and the flexibility of prices and wages becomes crucial.

Artificial intelligence may indeed transform labour markets in ways we cannot fully anticipate. But the long-term outcome will depend not only on algorithms and productivity gains but also on the frameworks within which individuals and firms are allowed to respond.

For readers interested in this line of thought, the original Substack essay explores the theoretical foundations of the argument in more detail. A shorter, more policy-focused adaptation has now been published on Mises Wire.

You can read the original essay here:
Can Economic Laws Debunk the AI Job Apocalypse?

And the adapted version here:
The Robot Won’t Take Your Job. Government Might.

Thanks for reading! Let me know your thoughts in the comments. — Attila

If you enjoyed this, explore more articles and ideas on my blog here.

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