What will be scarce?

April 14, 2026

Starbucks is a huge company (market cap of $112 billion) that sells one of the most standardized products in the modern economy. Making a cup of coffee or even one of the fancy specialty drinks is very easy to mechanize and reproduce. If the entire economy is soon to be automated, with labor being replaced with increasingly more sophisticated capital, Starbucks should be a canary in the coal mine—the technology for removing labor from its stores and replacing it with automated capital has been around for years. Over the past few years, Starbucks has done exactly that: in efforts to increase thin margins, management has automated more and more of the coffee-making business and instituted tightly mechanized processes for delivering it to customers. But instead of increasing automation, the opposite has happened. After trying to streamline the store experience with fewer workers and more automation, the company concluded that this had been a mistake. CEO Brian Niccol said that ``handwritten notes on cups’’, ceramic cups, and ``the return of great seats’’ had led more customers to ``sit and stay in our cafes’’, showing that ``small details and hospitality drive satisfaction.’’ More baristas are being hired per store and automation is being rolled back.

Economics is the study of decision-making under constraints, i.e., scarcity. If advanced AI brings material abundance—if machines can produce many if not all forms of human production at very low marginal cost—does economics become irrelevant? No, we will still have scarcity, but the kind of scarcity that matters will change. Ultimately the answer to any question about the future economics of advanced AI begins with identifying what becomes scarce. After answering that question, the rest of the analysis is pretty straightforward. In this essay I’m going to explore what becomes scarce when automation can replicate many if not all human production, and what that may mean for the types of jobs that emerge.

Before industrialization, it was difficult to separate a product from the person who made it. The weaver who made your shirt, the baker who made your bread: you personally knew them, and their skill and reputation were tied to the product that they sold. Economic transactions had a distinct social component that was innately linked to the consumption experience. The industrial production process changed this by breaking craft into standardized, repeatable steps. Performed by workers based on predetermined and regularized steps, capitalism produced something new: the commodity form, in which a product’s value lies in the product itself, detached from whoever made it. A table is a table, a phone is a phone. The screen that you’re reading this essay on was designed in one country, manufactured in another, using components from around the world. But none of this matters for the experience of buying and using the device.

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