Marx, Keynes, and A.I

A new economic paper demonstrates that individual firms have rational incentives to adopt AI automation to reduce costs and stay competitive, but when all firms do this simultaneously, they destroy consumer demand by eliminating worker wages—creating a collective harm that benefits no one. This dynamic, which the author connects to Marx's concept of "coercive competition" and Keynes's concerns about wage deflation, shows that market competition itself can drive economically destructive outcomes, and that only policy interventions like an automation tax can prevent the trap.