This is what I mean when I talk about AI's nth order effects.
hodlbod
npub1jl…jynqn
2026-05-29 21:27:12 CEST
Author Public Key
npub1jlrs53pkdfjnts29kveljul2sm0actt6n8dxrrzqcersttvcuv3qdjynqnPublished at
2026-05-29 21:27:12 CESTEvent JSON
{
"id": "5fd1fd85b76c541a0ec6d21a71f0373be52204953cec22f7a6eef4bfadb3dc96",
"pubkey": "97c70a44366a6535c145b333f973ea86dfdc2d7a99da618c40c64705ad98e322",
"created_at": 1780082832,
"kind": 9802,
"tags": [
[
"r",
"https://www.owenmcgrann.com/p/the-dead-economy-theory"
],
[
"context",
"This is what I mean when I talk about AI's nth order effects."
],
[
"client",
"highlights.shakespeare.wtf"
]
],
"content": "Turn one: a company licenses AI to replace a significant portion of its workforce. Costs drop. Margins expand. The stock price goes up. Everyone on the earnings call is happy. When Block’s Jack Dorsey laid off nearly half his workforce in March, citing AI coding agents, investors responded with a twenty-five percent stock price surge in after-hours trading. The market rewarded the elimination of human labor with an immediate, massive transfer of value to shareholders.\n\nTurn two: the replaced workers stop earning income. They cut spending. The businesses they used to patronize see revenue decline. Some of those businesses also adopt AI to cut costs, compounding the displacement. Consumer demand contracts across the economy.\n\nTurn three: the company that fired its workers to save money discovers that its customers were, in aggregate, other companies’ workers. Revenue growth stalls. The AI subscription that was supposed to be an investment in efficiency turns out to be a contribution to the destruction of its own market.",
"sig": "1ca545c2788422b07955ea9ccb374769958bae02457ffdb8d80f2e0222d9e95112f0cc3ffa1b8ce48008ec7a19f76fd05060edd2fa5a9c62b183e5fec664ac56"
}