A Short Note On Post-AGI Economic Models and Governments as Large-Scale Employers

DOGE's goals - of cutting the government workforce, making things more efficient, reducing the size of the government - are laudable from a centrist or unbiased perspective, as governmental bloat and inefficiencies have a significant dampening effect on a nation's technological progress, but it is also ironic in this moment, considering that the trendlines are fast taking us to a world where governments will invariably be the biggest employers, and of one of the very categories of jobs that DOGE wants to rid the government of.

Much like the Saudi model, which employs 2/3rds of the native people in the government, nations around the world, starting with the richer ones, are likely to start employing an increasing number of people in "empty" or "paper" jobs that don't require the employees to do much, if anything at all.

There are lots of details and nuances to how such economic models will be implemented, but the bottom line is the most likely post-ASI widespread adoption scenario has high taxes for corporations - whose margins will be going through the roof, making such high taxes feasible - funding "easy" jobs for the majority of the population dispensed through the governments.

An example is Donald Trump supporting the Longshoremen (choosing inefficiency or largesse over leanness and the optimal use of capital for further capital growth), over plans for automated plans, at the cost of higher profits. It is telling that someone as transactionalist and bottom-line oriented as him chose this path, and it is a sign of the times to come.

While we tend to over-index on individuals and presidents' impact on the trajectories of societies, every now and then, you get some exceptions. It is also an especially delicious twist of fate that someone as volatile and mercurial as Trump will be the president during the widespread deployment of AGI, which leads to radical shifts in the economy and society. Presidential decrees don't matter all that much as a rule, but they very much would in this case. As for the how, my guess is as good as yours.

The model referenced above will be akin to a faux UBI state - and arguably, many jobs in the developed world are already like this, according to some prominent technologists and economists - take most jobs in large companies (Google could do just as well a job at a fifth of its mammoth workforce, and so could Microsoft), or most jobs in admin and management and most jobs in the government, and you see the Pareto principle apply prominently across the board, in an even more skewed manner - 10% bringing more than 90% of value for many large organizations.

As to why then would such companies be wasting billions every year on employees with low productivity and little-to-no "value", the answer is inertia, the answer is a natural equilibrium [they need to be seen as "strong employers" for them to continue to be in the good graces of governments, and to continue to get perks, and the answer is an optima as determined by the top brass, mostly implicitly - shareholders are happy to take a fraction of the profits, rather than maximize it or take all of it, to keep the ship going for the longest time. Large organizations develop all sorts of interesting adaptations, to survive in the Darwinian jungle of the modern society.

This does appear to me the best way to alleviate the pressures of widespread AGI deployment on the majority of the people who don't own businesses, and it is an optimistic sign or a happy coincidence that most indicators seem to be pointing at this as the most likely model or world we will be living in. More than that, I think this is the path humanity will traverse because this is the path that minimizes the inevitable suffering following The Great Transition the most.

To keep the party going the longest, even otherwise self-interested and greedy parties will accept this as the optimal path, for on most of the other paths, you have anything from disorders to upheavals to overthrows. After all, populism has become the name of the game, on both sides of the political aisle- there are those who are content with the status quo, and those who are deeply illusioned, and this is the filter that matters the most in the calculus of what political and economic systems are the most sensible.

The riches at the top are bound to continue to increase, at rapid rates, especially as the space economy, nuclear fusion, AGI, and robotics remove some of the fundamental constraints and bottlenecks to capital expansion [physical and intellectual labour, natural resources, regulations, and energy] and the only way not to have a left field, disruptive, or destructive event, like a revolution or a civil war is to keep on raising the floor, which becomes eminently achievable, nay imperative.

This dynamic, this model, also reframes the conversation from redistributing to radically increasing the size of the pie, and it buries Marx's ghost for once and for all, finally ending the spectre of class conflict that has been looming over our societies since The Communist Manifesto.