Jan Kulveit

AI may radically reduce both, making market transactions nearly frictionless while also making large-scale coordination easy.

The equilibrium size and structure of firms could shift in unpredictable directions, or the concept of a firmer might become less coherent.

Discrete agents and competition.

Market models assume distinct agents that cooperate and compete with each other.

Market and competition models usually presuppose you can count the players.

AGI systems can potentially be copied, forked, merged, or run as many instances, and what are their natural boundaries is an open problem.

Capital versus labor.

Basic concepts in 101 economic models typically include capital and labor as concepts.

Factors is production function, total factor productivity, Cobb-Douglas, etc.

Capital is produced, owned, accumulated, traded, and earns returns for its owners.

Labor is what humans do and cannot be owned.

This makes a lot of sense in modern economies, where there is a mostly clear distinction between things and people.

It is more ambiguous if you look back in time in slave economies.

Do slaves count as labor or capital?

It is also a bit more nuanced, for example, with human capital.

When analyzing the current world, there are multiple reasons why the things and people distinction makes sense.

Things are often tools.

These amplify human effort, but are not agents.

A tractor makes a farmer more productive, but does not make many decisions.

Farmers can learn new tasks, tractors cannot.