Forget the Robot Tax. Tax the Tokens.

I read a paper this week called The AI Layoff Trap. It has an interesting thesis. If you look at what is happening with automation and laying people off, and take it to the ultimate conclusion, no one will have a job. If that happens no one can afford to pay for a company’s goods or services. So, logically, it doesn’t make sense for a company to automate all the jobs and lay everyone off. If they do that, they have no customers. The paper argues that even if it doesn’t make sense, businesses have no choice but to do it. Automate and lay everyone off - and have no customers. When a company automates work and replaces people with AI, it keeps all of the savings. The laid off people have less money to spend, but not all companies are moving at the same speed, so there are still employed people who can spend money. The loss of demand from the people laid off is spread over all the companies providing the services. This leads to an arms race. Everyone agrees that mass layoffs will…