The Future of Conscious Consumption II

This chapter extends the analysis of recursively self-improving artificial general intelligence (AGI) from an intra-generational political economy to an explicitly intergenerational setting. Building on the preceding chapter’s demonstration that AGI-driven accumulation destabilizes the wage–demand–welfare nexus within a representative-agent economy, the present chapter asks whether post-labor institutions can remain economically viable and politically legitimate once these dynamics unfold across successive cohorts. To address this question, the chapter embeds AGI production and redistribution in a dynamic overlapping-generations (OLG) framework. This extension makes explicit the intertemporal mechanisms that were only implicit in the earlier analysis, including the evolution of labor income shares, the persistence of aggregate demand, and the distribution of welfare across cohorts that face systematically declining roles for labor in production. Redistribution is therefore evaluated not only by its contemporaneous stabilizing effects, but by its ability to sustain welfare and consent across generations as AGI capital deepens. The analysis focuses on a value-added tax on AGI-driven output rebated uniformly as universal basic income (VAT–UBI). Treated as a structural fiscal mechanism rather than an empirical tax system, VAT–UBI recycles automation rents into household income and restores the consumption–production feedback loop that collapses under laissez-faire automation. Within the OLG setting, the chapter characterizes equilibrium labor supply, consumption, and welfare under VAT–UBI; shows that redistribution prevents deflationary demand collapse; and establishes conditions under which lifetime welfare is weakly increasing across cohorts despite declining labor income. The central contribution is to demonstrate that the political economy of AGI is inherently intergenerational. Even when redistribution stabilizes outcomes within a given period, the durability of a post-labor social contract depends on whether successive cohorts inherit institutions that deliver rising welfare and meaningful economic participation. The chapter therefore reframes redistribution under AGI as an intertemporal coordination problem, linking the economics of recursive automation to questions of generational justice, legitimacy, and conscious sovereignty in an economy increasingly shaped by autonomous systems.