When Labor Becomes Capital: AI and the Economics of Ownership

"You can be a red-blooded capitalist and still worry about the political stability of an economy in which ever more output flows toward shareholders instead of employees."

I've always considered myself a red blooded capitalist, and yes, I can see the worry. While I've been thinking about this for most of my career, I've been forced to think about it quite a bit more lately. 

The whole thing about capitalism is that you achieve wealth by owning stuff, not by doing stuff. There's exceptions of course, but generally the trick is, in the words of Warren Buffet, to figure out a way to make money while you sleep. 

As a partner in a firm, you are an owner of the firm, but really you make your money by selling your services. As soon as someone figures out how to deliver the same value using a capital asset rather than a human, your entire business is at risk. And that's exactly what AI is going to do. Take tasks that used to have to be performed by an artisanal professional and turn them into the output of a machine that can be owned and which will make its owner money while they sleep.

I think firms are starting to wake up to this, see what players such as Kirkland and DLA are doing. I think it's too soon to tell whether they will be successful or not, but I think it's important to acknowledge the threat and start figuring out how you can fit into the new world where value that has always lived in the 'labor' column is now moving to the 'capital' column faster than it ever has before.