When AI becomes our politics and economics

Machines are now performing activities that absolutely refuse classification under traditional economic models. They do not harvest wheat. They do not stamp steel on assembly lines. They do not smile at hotel reception desks. They think, they optimize, they create.

Their share of total global economic activity is now rising vertically. A recent viral piece called this unmapped territory the “ghost economy.” We welcome the conversation. But labels change with the seasons. The tectonic reality does not.

We have been writing about this for nearly three years. We gave it a name. We called it the fourth macro sector. Others may call it the ghost economy, the machine sector, the invisible GDP. The label does not matter. The arithmetic does.

Percentages of any whole must add to a hundred. If the machine share rises, that share must come from somewhere. The service sector is the donor. The segment that has become the majority of the developed world’s economy over the last 50 years is now ceding ground to something it cannot compete with, cannot regulate quickly enough, and cannot fully comprehend.

When the service sector was consuming manufacturing and agriculture, it was called progress. Now that the wheel has turned, it is called a crisis. Displacement was always someone else’s problem. Until it wasn’t.

There will be relative losers. That much is certain. But whether the beneficiaries on the other side are humans, machines, or something we have not yet learned to measure is a question nobody can settle. Not today, possibly not ever.

This brings us to the core realization of our era. Artificial intelligence is not just a chapter in future economics textbooks. It is going to be our politics. It is going to dominate our dinner table arguments. It will trigger our deepest personal identity crises. This is not a temporary phase of technological digestion.

This is the new permanent state of affairs. Every solved problem will birth a new existential dread. We are going to develop a distinct AI economic left and an AI economic right. We will birth an AI political left and an AI political right. Societies will fracture along lines drawn by algorithms. Not just now but at every point and always without permanent answers or any stable ground.

Even as specific concerns get addressed or specific positives materialize, new ones will rush in to replace them. We play deeply conflicting dual roles in this new era. We are both the eager consumers of machine labor and the displaced producers of human value. This paradox guarantees perpetual cognitive dissonance.

The tension is amplified by a chilling reality. Machines cannot speak for themselves. They do not offer apologies. They do not offer justifications. We are forced to project our collective screams onto their absolute silence. The debate will rage entirely in a vacuum of human projection.

The spectral historians

What is better? What we have or this? One of the most striking reversals of recent weeks has been a whiplash of public opinion. We watched “nobody is actually using artificial intelligence” become “artificial intelligence is devouring us whole.”

The speed of this pivot was breathtaking. The skeptics changed their arguments with the terrified fervor of late converts. They did not change their underlying conclusions. The conclusion always came first. The evidence was always completely negotiable. Fear simply found a new vocabulary.

The extreme optimists are equally guilty of intellectual fraud. They dip aggressively into historical archives for psychological comfort. They point blindly to the invention of the mechanical loom. They cite the widespread adoption of the automobile. They even weaponize the invention of flash-frozen food.

They dress blind hope in the respectable garments of historical analysis. Neither side can paint a credible roadmap of the coming decades. Both sides simply plunder the past for convenient anecdotes. History is stripped of its complex context to serve modern dogmas. We are using dead centuries to comfort our living fears.

What both camps share is a stubborn refusal to accept reality. We are standing in a genuinely unrecognizable era. Historical precedents offer zero intellectual protection. Outsourcing physical labor to machines was easy for our egos. Outsourcing cognition is a direct assault on human pride.

Forecasting the trajectory of machine intelligence with historical analogies is fundamentally absurd. It is like predicting the arc of a modern cricket match by analyzing a forgotten sport played in 18th-century Rajasthan.

The rules are entirely alien. The fundamental players are no longer exclusively human. The realization that our history books are utterly useless will take years to accept. The future has no precedent, but the opportunists already have a script.

As we wrote days ago inHistory’s Hallucinations, when the past fails us as a guide, we do not sit quietly with the uncertainty. We build instead. We construct fantastical visions on castles of assumptions, each tower more elaborate than the last. That has clearly begun and could soon be happening at an industrial scale.

Machines themselves are helping us build the most fanatical scenarios imaginable, engineered not for accuracy but for virality, calibrated to stoke the basest emotions of hope and dread in equal measure. Some of these visions will be proven right. Most will not.

It will not matter. By the time any verdict arrives, there will be exponentially more to process, more to fear, more to celebrate, more to argue about. The emotional bandwidth required to keep pace will exceed what most of us have. And that too will become someone’s argument. On both sides.

For now, the arrow of history points toward a few cold truths. Artificial intelligence will not be useless. It will not suddenly plateau on some invisible scaling law. It will not go unused by the masses.

This reveals exactly how the technology will infiltrate every future argument. It will be used as a blank canvas for human insecurity. It will be weaponized for political ends, financial positioning, and bitter personal agendas.

We are only seeing the first skirmishes of a permanent war of interpretation. People will take aggressive stances on algorithms simply to secure their own relevance. History will be dragged from its grave to serve preformed conclusions. It will be shouted loudly across every platform. Volume is the only compensation for the total absence of evidence.

The ghosts we carry

The true crisis is not societal. The true crisis is fiercely intimate. Most of us wear two fundamentally incompatible masks. Economists hide this trauma behind sterile terminology. They speak casually of producer utility.

They speak academically of consumer utility. The reality is simpler and far more brutal. In different domains of our lives, we sit on completely different sides of the AI divide. We sit on opposite sides of our own lives. And, we switch sides constantly. Sometimes within the same hour. We are haunted by our own hypocrisy.

You might wake up drowning in profound gratitude. An artificial intelligence perfectly diagnoses a loved one. It spots the invisible anomaly. It actively saves a human life. You do not spare a single thought for the career of the displaced radiologist.

Nightfall brings a radically different reality. Your child returns home with an expensive engineering degree to discover that the job market has shifted beneath them. Fury rapidly replaces the morning gratitude. We are desperate to quarantine the magic from the massacre.

Then, before bed, the portfolio notification arrives. The AI infrastructure company posted record earnings. The retirement account is up. Three emotional states. None of them is dishonest. They inhabit one body. They occur on the exact same day.

A child in a remote village finally receives a world-class education. An algorithm tailors every lesson to her specific mind. It is a beautiful triumph of accessibility. It is also a quiet tragedy. That same child will never secure the offshore service job her older sibling cherished.

Our wallets celebrate the very efficiency that breaks our hearts. The ladder that lifted hundreds of millions into the middle class is being pulled up while a different, unfamiliar ladder is being lowered. Nobody knows if the new one reaches the same floors.

Every convenience comes twinned with a threat. Every gain in one role is shadowed by a loss in another. It is the modern condition of trying to reason with a moody, two-faced Gemini hovering in the OpenAI clouds, never quite knowing if today’s X-factor will be benevolence or foreclosure. The bribe of convenience is simply too sweet to refuse. We willingly fund the exact forces we deeply fear.

These internal divisions are not temporary. They are permanent features of the new economy. We will beg to separate the warmth of the fire from its devastating burn. The separation is impossible. We harbor a personal AI left and a personal AI right. Our political stance shifts dynamically with our daily convenience.

The trauma crosses generations seamlessly. Parents who cheat death via medical algorithms raise children who starve for economic relevance. Nobody designed it this way. It is simply what happens when a force this large moves this fast through a species this complicated.

The haunted arena

This intimate agony will inevitably bleed into public arenas. It will feed into conferences, forums, parliaments, and panel discussions that will never reach a resolution. We are watching it already. Great speakers and gifted orators will weaponize their rhetorical power to make their points.

Some will demand more control. Others will justify less. Most of the time, the speakers will know each other’s positions before anyone opens their mouth. They will talk past each other. Almost never to each other. They will perform exclusively for the approval of their own echo chambers.

These debates will carry a particular poison. Both sides will have genuine evidence. This is not flat-earth territory. Both the optimists and the pessimists will have real data, real stories, real people to point to.

That is precisely what makes AI intractable as a political subject. When both sides are partly right and both sides are partly wrong, resolution becomes impossible. Conviction becomes performance.

A recent global summit exposed this political theater perfectly. The host nation’s ruling party praised the infinite potential of machines. The political opposition warned of imminent algorithmic subjugation. They occupied diametrically opposite realities within the same week.

This intellectual civil war ignores all geographic borders. Authoritarian regimes will fracture just like liberal democracies. Corporations will split internally over hardware budgets.

Even in families, one will see the fault lines form around views toward machines. AI is becoming a wedge issue of the purest kind. Not because the positions are irreconcilable in theory. But because the people holding them are unable to occupy each other’s shoes even for a moment.

A new class of professional AI worriers is emerging. Fear may be the only industry growing faster than artificial intelligence itself. And the debates will carry an additional cruelty: every person in every audience is personally affected. The speaker on stage, arguing that AI will create more jobs than it destroys, may have an AI assistant drafting their next keynote.

The irony will be visible to all yet acknowledged by none. We are paying fortunes to prophets who use the devil’s tools to write their sermons.

The phantom reallocation

AI is the great reallocator. And the reallocation will produce winners and losers on a scale that modern economies have not experienced. The winners, if they are wise, will try to temper expectations. We witnessed a rare example of this recently.

The chairman of one of the world’s largest memory chipmakers, sitting on a stock that has more than quadrupled, facing analyst estimates for annual operating profit that have been revised from the extraordinary to the almost incomprehensible, cautioned publicly that the same forces producing those gains could just as easily generate staggering losses.

That is modesty from the summit of a mountain. Well-earned and definitely useful. This is not an age where one can afford to flaunt the gains.

The losers will not bother with modesty. They will saturate the earth with their desperate complaints. This reallocation represents the most violent disruption in modern economic history.

We have warned about the structural stress on the service sector for years. The cognition sectors are trembling. The office sectors are under active siege. The industries that swallowed the majority of the global economy are suddenly incredibly fragile. Extreme loss always demands a captive audience.

In some cases, pressures in the service/office/cognition sector are emerging from sectors once considered archaic. The rise of the fourth macro sector marks the end of the primacy of services, but also supports the physical sectors, at least until we have cognition infused into all things inanimate. Whether the immediate impact is visible in the software segment today, or in the shifting power between chip designers and chip manufacturers tomorrow, the unease runs deep.

We witnessed this friction intimately when a friend reacted with genuine anger to the suggestion that foundries and memory manufacturers could one day earn more than a celebrated chip design company. This interaction happened last year, when our supposition sounded so absurd that there was no room for a mind-numbing debate. It sounds less absurd by the month.

This reallocation extends beyond companies. It extends to countries. The service economies that lifted hundreds of millions into the middle class over the past two decades are directly in the path of the fourth sector’s expansion.

Nations that built prosperity on human cognition sold at a discount to the developed world are now courting AI investment at the very summits where they celebrate the technology that could hollow out their greatest employment engine.

Some may genuinely believe that risks of such displacements are negligible, but they are certainly not so trivial that genuine discussions beyond glib dismissals are disallowed.

The invisible question

Yet the optimists have genuine reasons to look only at the bright side. To understand why, we must confront the question that has no answer. It is the question beneath every debate, every conference panel, every late-night argument. It is the ghost in every economic projection. The simplest version of the question goes something like “is work necessary?”

On the production side of the ledger, the picture looks alarming. Machines are doing more. Humans are doing relatively less. Perhaps, in time, absolutely less. The fourth macro sector’s chart rises while the human share of productive activity flattens or falls. This is the image that terrifies. This is the image that fills viral thought experiments and earns headlines as of this week.

But flip the chart. Look at it from the consumption side. Everything machines produce ultimately serves human purposes. Machines do not eat. They do not watch films. They do not take holidays. The aggregate bounty available to humanity could explode upward. It will grow even as our labor share collapses.

This forces a brutal philosophical confrontation. Imagine a world with boundless free time. People look after their physical health. They pursue eccentric passions. They raise their children with total presence. They idle mindlessly in front of glowing screens. We lack the vocabulary to define a good life without a grueling job.

But there is no traditional work. So is that a paradise or a crisis? Is it liberation or erasure?

Nobody knows. And the absence of an answer is the root of the ghost economy debate. It is the root of the political fracture. It is the root of personal anguish. We cannot agree because the question itself has no stable answer. A society that cannot measure value will fight endlessly about values. Bad metrics do not stay in spreadsheets. They spill into the streets.

The horror is vastly more complex than this already impossible framing. Machines will not simply invent new flavors of domestic inequality. Imagine the poorest citizens of a wealthy nation.

Their absolute baseline needs might one day be perfectly met by automated abundance. The politicians securing this local utopia will look entirely inward. They will not spare a single thought for shattered communities across the ocean. A global Hunger Games scenario becomes highly probable.

No system will distribute these gains to the world as one. Machines working will produce inequality in new and unfamiliar forms. The AI left of one nation will be the AI right of another. Abundance for some will coexist with abandonment for others. Not because anyone chose cruelty.

But because the political and geographical fractures the world carries do not allow for the equitable distribution of free gains. We barely share within our borders. We will absolutely not share beyond them.

The unseen horizon

Permanence is a total illusion. None of these fierce debates will hold their shape. None of these current political alliances will survive the decade. The velocity of development breaks every predictive framework.

The burning questions of today will be obsolete by tomorrow morning. Today, artificial intelligence is primarily a cognitive force trapped behind glass. Tomorrow, it physically escapes the screen. It will animate heavy machinery. It will pilot humanoid robotics. We are arguing about the weather while the tectonic plates shift beneath our feet.

When cognition is attached to machines, let’s call them robots, the current displacement debate about the service sector would appear like the first act. Act two involves physical labor. Act three, maybe machines sending their likes to Mars. What do we know?

Fantasies aside, desperate governments will eagerly resurrect discarded economic theories. They will dress old ghosts in modern clothing. Universal basic income will become a mainstream mandate. Punishing wealth taxes will be proposed daily. Levies on robotic labor will dominate legislative sessions.

Outright bans on autonomous deployment will gain sudden political traction. These are ancient ideas waiting for an existential crisis. They will be pulled from the intellectual attic, dusted off, and presented as solutions to a problem that is mutating faster than any policy cycle can track. Every regulatory framework announced with confidence will look incomplete within months. Every political consensus will be a draft.

There will also be positive developments aplenty. The moment AI is recognized as a genuine equalizer in healthcare or education for the most underprivileged, something will shift in the discourse.

But that too will be temporary. Because in what we have called the super-Moore era, two and a half years of observable history tells us one thing with confidence: whatever we think will happen, happens faster than expected, and far more arrives alongside it.

Our coordinates keep changing without warning. We acknowledge the absolute inevitability of strict regulations. We recognize the coming political and economic cycles around the machine. We will endure capital expenditure cycles and profit cycles. We will suffer regulatory cycles and brutal swings of public sentiment.

Every global headline will feature the algorithm. An ever-diminishing faction of skeptics will continue screaming about hype. They will look increasingly ridiculous to the rest of the world. Machines are cementing their absolute dominance over our markets and our laws. Denial is a luxury we can no longer afford to finance.

The silence that haunts

A popular nightmare currently envisions a sterile future. It imagines an economy humming with infinite supply and zero human demand. It projects a deflationary void where algorithms produce everything and consume absolutely nothing.

This is a profound misunderstanding of our species. It is a profound misunderstanding of the fourth macro sector. The fourth macro sector is not a hollow, robotic factory. Even if machines turn into isolated engines of cold production, they could also be the source of joyful, gratis consumption for multitudes.

That, unfortunately, is a side point, for now. The events of the week show that they are already engines of raw emotion. Discussions over these algorithms will actively drive our deepest anxieties. Artificial intelligence has invaded our psyche completely. A single theoretical exercise can now wipe billions of dollars from our markets. We are completely addicted to the convenience.

We are equally addicted to the terror. We angrily demand the warmth of the fire while demanding total immunity from the burn. That separation is a childish fantasy. The fourth macro sector will keep rising vertically. The traditional service sector will keep donating its lifeblood to fuel that explosive ascent. We are building a paradise paved entirely with anxiety.

This transition will not merely polarize rival political factions. It will violently polarize a single human mind. You will passionately disagree with yourself before breakfast. You will completely abandon your deepest convictions by dusk.

The grand political theater will keep filling with terrified hypocrites. The family dinner table will become a bitter battleground of internal contradictions. The algorithms are not the phantoms. We are the actual ghosts haunting our own changing economy. We are terrified of our own reflection in the black glass of a screen.

One absolute thread must hold before we close. The machines will not defend themselves. We must hope they never learn how. That pristine silence will shape everything that follows. Criticizing a silent piece of code is infinitely easier than confronting an angry person who can shout back.

Blaming a nameless algorithm is vastly cheaper than firing an incompetent corporate board. It is safer than admitting a failed policy. Machines are the absolute perfect political targets. They do not cast ballots in local elections. They do not organize labor unions. They do not write bitter editorials. They do not weep on national television.

The political cost of demagoguery against a server farm is exactly zero. When the cost of blame falls to zero, toxic blame becomes our most abundant manufactured product. We will eagerly project every societal failure onto their silent servers, rightly and wrongly.

We must resist the temptation to close with certainty. A neat conclusion would be incredibly satisfying. It would also be a spectacular lie. We are walking blindly into a world where the argument never actually ends.

It simply updates. It updates because the silent machine keeps moving forward. It updates because our dual roles constantly collide in the dark. We are walking into a world of unprecedented grief and unimaginable benefit.

We owe no gratitude to the code for the benefits. We are absolutely justified in debating the brutal risks. Without that fierce debate, we have zero hope of finding solutions. We will not, and should not, stop begging the universe for an impossible compromise.

Nilesh Jasani is the founder and CEO of GenInnov Pte Ltd Singapore. This article first appeared on www.geninnov.ai and is republished with permission.Read the original here.Read more atwww.geninnov.ai/blog