Agentic AI threatens structural consumer deflation
The rapid adoption of agentic AI will trigger a severe deflationary crisis by collapsing real wages and consumer demand, despite boosting corporate profits.
The argument
The host highlighted a thesis from the 'Sitrini' Substack arguing that as companies automate knowledge work with AI agents (costing $6-$7/day versus $400-$500/day for humans), corporate earnings and 'ghost GDP' will rise while real consumer wages collapse. This stands in contrast to Citadel's optimistic view that human wants are elastic enough to absorb displaced labor.
The thesis, stress-tested
✓ What validates it
- ✓A sustained decline in white-collar job postings alongside rising corporate productivity
- ✓Further sharp drops in enterprise software stock prices (like ServiceNow and Salesforce) following major AI model releases
▸ Risks discussed
- ▸The elasticity of human wants could create entirely new industries and jobs as historical technology shifts have
- ▸Government regulation or moral guardrails could slow down the pace of corporate AI deployment
Hear it yourself
"AI agents cost 6 to $7 a day versus 4 to $500 for a knowledge worker. 4% of GitHub is already authored by Cloud Code. It's projected to hit 20% by year end, and then just proof in the pudding on the day, Anthropic launched."
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