The Future of Conscious Consumption I

This chapter develops a formal political economy of Artificial general intelligence (AGI) understood as a recursively self-improving form of capital that transforms production, ownership, and the foundations of the social contract. Moving beyond sectoral or task-based accounts of automation, the chapter treats AGI not as a speculative rupture but as the logical intensification of algorithmic coordination, automation, and value mediation already observable in contemporary economies. The analysis proceeds in three steps. First, it introduces dynamic models of AGI capital accumulation under alternative cost structures and shows how recursive self-improvement can generate either bounded or runaway growth regimes. These technological regimes map systematically into distributive outcomes. When AGI accumulation is unbounded, human labor income collapses, aggregate demand becomes fragile, and welfare diverges downward. When AGI growth is endogenously constrained, wages, employment, and demand stabilize at strictly positive levels. Technological frictions therefore emerge not as inefficiencies but as structural stabilizers of inclusive economic equilibria. Second, the chapter examines the political economy of redistribution in AGI-dominated economies. It shows that taxing AGI-generated income and redistributing it as lump-sum transfers can stabilize human disposable income shares and prevent demand collapse, but cannot fully substitute for the welfare role played by positive labor income. Redistribution is therefore necessary but not sufficient for sustaining human welfare. When AGI systems are modeled as autonomous strategic agents, redistribution arrangements are shown to be sustainable only if they are incentive-compatible, reframing the social contract as a dynamically stable equilibrium rather than a purely normative commitment. Third, the chapter analyzes the recursive concentration of capital ownership. It demonstrates that even small asymmetries in reinvestment behavior generate replicator dynamics that endogenously concentrate AGI capital, giving rise to a new form of leisure class defined by algorithmic ownership rather than labor or merit. This section identifies fiscal, regulatory, and ownership-based institutional design principles capable of disciplining recursive concentration and preserving economic plurality. Overall, the chapter shows that AGI-driven economies are characterized by sharp regime bifurcations rather than smooth transitions. Whether AGI leads to inclusive prosperity or to economic exclusion depends on the interaction between scaling frictions, redistribution, ownership structures, and incentive alignment. The central conclusion is that the sustainability of democratic political economy in the age of AGI depends on embedding redistributive and governance principles directly into the recursive dynamics of intelligent capital, thereby preserving human agency, welfare, and political legitimacy beyond labor-centered market structures.