Post-Labor Economics in one nutshell: Post-Labor Economics...
David Shapiro (L/0)@DaveShapi
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May 03, 2025
~7 min read
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Post-Labor Economics in one nutshell:
Post-Labor Economics addresses the looming economic instability caused by automation eroding wage-based aggregate demand, offering a market-compatible alternative to potentially distortive solutions like large-scale UBI. PLE proposes systematically shifting household income from declining wages towards property-based returns—like dividends and royalties—primarily through decentralized, county-level endowments that leverage existing legal structures (trusts, co-ops) to convert local assets (ranging from land and energy to data streams and cultural capital) into regular resident dividends. This bottom-up framework uses transparent, publicly-derived metrics, spearheaded by the Economic Agency Index (EAI) which tracks the crucial Wage:Property:Transfer income composition, guiding interventions via a practical "Measure -> Menu -> Monitor" loop. By fostering local innovation and aligning the incentives of citizens, government, and even outside capital through shared ownership models, PLE aims to build resilient, adaptable local economies where prosperity and agency are grounded in collective asset ownership rather than dependence on vanishing traditional jobs.
The longer pitch:
We stand at the precipice of an economic transformation unlike any seen before, driven by rapid advancements in artificial intelligence and robotics – what Klaus Schwab and the World Economic Forum termed the Fourth Industrial Revolution. While past technological shifts ultimately created new jobs, credible forecasts from institutions like the IMF, Goldman Sachs, and WEF itself now suggest a fundamental difference: automation is poised to significantly impact not just manual labor, but a vast swath of cognitive, white-collar work. Some estimates suggest nearly 40 percent of global employment is exposed. This isn't just about job titles changing; it's about the potential erosion of wages as the primary engine fueling our economies. For centuries, our economic models, from classical to Keynesian to neoliberal, have implicitly relied on a robust wage-labor contract to drive aggregate demand. If wages decline significantly, as many predict, we face the genuine risk of a demand-driven economic death spiral, where insufficient consumer spending power leads to business failures, further job losses, and deepening recessionary pressures, even amidst unprecedented technological productivity.
Faced with this prospect, the default solutions often proposed, like a Universal Basic Income, certainly warrant discussion and may form part of a future safety net. However, relying solely on large-scale government transfers funded by potentially massive tax increases raises significant concerns. As experiences like the Finnish UBI trial suggest, such transfers may not sufficiently replace lost income or address deeper issues of economic participation. More fundamentally, from a market perspective, replacing decentralized wage signals with centralized transfers risks distorting the very price information that allows economies to allocate resources efficiently, potentially leading us towards Hayek’s knowledge problem on a societal scale.
This is where Post-Labor Economics offers a different path, a structural adaptation rather than just a patch. It starts by acknowledging the three fundamental channels through which households receive income: wages from labor, returns from property or capital ownership, and government transfers. If the wage channel is structurally weakening due to automation, and the transfer channel carries significant risks and limitations, then sustainable prosperity must increasingly flow through the property channel. PLE, therefore, is fundamentally about redesigning our economic architecture to broaden the ownership of productive assets and shift the foundation of aggregate demand from wages to dividends, rents, royalties, and other returns on capital. This isn't about abandoning market principles; it's about making them work in an era where human labor is no longer the primary scarce input.
How do we achieve this? PLE proposes a pragmatic, decentralized approach centered on subsidiarity, focusing on the US county as the ideal scale for action. Counties already possess significant legal authorities – they manage land, issue bonds, run utilities, and enter partnerships. PLE envisions counties acting like mini-sovereign wealth funds, establishing County Endowment Funds. These funds would proactively manage local assets – not just obvious ones like land for solar farms or mineral rights, but also previously under-monetized assets like public rights-of-way for fiber optics, royalties from data center operations hosted locally, carbon sequestration credits from improved land management, or even revenue streams derived from local cultural heritage and tourism initiatives. Crucially, this relies on existing legal tools like public trusts, cooperatives, and standard lease or royalty agreements, minimizing the need for radical legislative overhaul.
But simply creating funds isn't enough. We need to know if they're working. This brings us to the maxim: "what gets measured gets managed." PLE introduces a suite of transparent, publicly derivable metrics to provide this crucial feedback loop. The cornerstone is the Economic Agency Index (EAI). Unlike GDP which measures output, or Gini which measures inequality, the EAI measures the composition of household income within a county – the ratio of Wages to Property income to Transfers. A rising EAI indicates a healthy shift towards income generated through work or ownership, while a falling EAI signals increasing dependence on potentially unsustainable external transfers. Complementing the EAI are the Collective Purchasing Power (CPP) index, measuring disposable income plus local dividends to gauge sustainable local demand, and the County Custodianship Index (CCI), assessing quality of life factors like environmental stewardship, governance transparency, and local amenities.
These metrics power a "Measure -> Menu -> Monitor" cycle. Counties measure their baseline using the EAI/CPP/CCI dashboard. They then select interventions from a curated "menu" of proven options – drawn from real-world successes like Alaska's Permanent Fund, Chattanooga's municipal fiber co-op, Colorado's ESOP tax credits, Paducah's artist relocation trust, or rural energy cooperatives. The menu offers diverse paths, allowing counties to leverage their unique local strengths, whether it's abundant sunshine, a rich cultural history, or potential for data infrastructure. Finally, they monitor the quarterly updates to the dashboards to see the impact of their choices and iterate accordingly.
A critical question is why the capitalist class – from local business owners to VCs to global billionaires – would support a system that channels returns back to residents. The answer lies in aligned incentives and risk mitigation. For businesses, securing "willing wallets" – customers with spending power – is paramount as wages decline. Participating through mechanisms like patron-equity or data royalties becomes a competitive necessity for customer retention. For large-scale investors, including potentially billionaires like Bill Gates or Elon Musk, PLE offers stability and reduced risk. Investing in county endowments via non-voting County Capital Units provides access to diversified, potentially stable, low-correlation returns backed by real assets, functioning much like an infrastructure or ESG fund. Furthermore, partnering with counties (e.g., paying royalties for a data center or fusion plant) enhances their social license to operate, drastically reducing permitting friction and local opposition – a significant cost saving. This structure ensures that as their projects succeed and generate surplus, the local dividend automatically rises, creating a win-win rather than an extractive relationship.
Of course, challenges exist. Ensuring good governance across thousands of county funds, preventing capture by local elites, managing potential housing bubbles in successful counties, and addressing the risk of widening inter-regional inequality require robust guardrails. PLE anticipates these with built-in mechanisms like vesting periods for resident shares, NAV-based buy-ins for capital units, dividend smoothing buffers, diversification rules, and stringent transparency requirements. States play a crucial role in setting these minimum standards and potentially facilitating equalization.
In conclusion, Post-Labor Economics offers a comprehensive, pragmatic framework for navigating the profound economic shifts driven by automation. It provides a new lens (EAI, CPP, CCI) to understand local economic health, a menu of proven, market-compatible interventions focused on broadening ownership, and a decentralized, bottom-up implementation strategy centered on county-level agency. It aligns the interests of citizens, government, and capital towards sustainable local prosperity, ensuring that the benefits of automation are widely shared, not narrowly hoarded. It’s not about abandoning capitalism, but about adapting it – creating its next operating system, grounded in shared ownership and empowered local communities, ready for a future where work as we know it may no longer be the center of economic life.
Post-Labor Economics addresses the looming economic instability caused by automation eroding wage-based aggregate demand, offering a market-compatible alternative to potentially distortive solutions like large-scale UBI. PLE proposes systematically shifting household income from declining wages towards property-based returns—like dividends and royalties—primarily through decentralized, county-level endowments that leverage existing legal structures (trusts, co-ops) to convert local assets (ranging from land and energy to data streams and cultural capital) into regular resident dividends. This bottom-up framework uses transparent, publicly-derived metrics, spearheaded by the Economic Agency Index (EAI) which tracks the crucial Wage:Property:Transfer income composition, guiding interventions via a practical "Measure -> Menu -> Monitor" loop. By fostering local innovation and aligning the incentives of citizens, government, and even outside capital through shared ownership models, PLE aims to build resilient, adaptable local economies where prosperity and agency are grounded in collective asset ownership rather than dependence on vanishing traditional jobs.
The longer pitch:
We stand at the precipice of an economic transformation unlike any seen before, driven by rapid advancements in artificial intelligence and robotics – what Klaus Schwab and the World Economic Forum termed the Fourth Industrial Revolution. While past technological shifts ultimately created new jobs, credible forecasts from institutions like the IMF, Goldman Sachs, and WEF itself now suggest a fundamental difference: automation is poised to significantly impact not just manual labor, but a vast swath of cognitive, white-collar work. Some estimates suggest nearly 40 percent of global employment is exposed. This isn't just about job titles changing; it's about the potential erosion of wages as the primary engine fueling our economies. For centuries, our economic models, from classical to Keynesian to neoliberal, have implicitly relied on a robust wage-labor contract to drive aggregate demand. If wages decline significantly, as many predict, we face the genuine risk of a demand-driven economic death spiral, where insufficient consumer spending power leads to business failures, further job losses, and deepening recessionary pressures, even amidst unprecedented technological productivity.
Faced with this prospect, the default solutions often proposed, like a Universal Basic Income, certainly warrant discussion and may form part of a future safety net. However, relying solely on large-scale government transfers funded by potentially massive tax increases raises significant concerns. As experiences like the Finnish UBI trial suggest, such transfers may not sufficiently replace lost income or address deeper issues of economic participation. More fundamentally, from a market perspective, replacing decentralized wage signals with centralized transfers risks distorting the very price information that allows economies to allocate resources efficiently, potentially leading us towards Hayek’s knowledge problem on a societal scale.
This is where Post-Labor Economics offers a different path, a structural adaptation rather than just a patch. It starts by acknowledging the three fundamental channels through which households receive income: wages from labor, returns from property or capital ownership, and government transfers. If the wage channel is structurally weakening due to automation, and the transfer channel carries significant risks and limitations, then sustainable prosperity must increasingly flow through the property channel. PLE, therefore, is fundamentally about redesigning our economic architecture to broaden the ownership of productive assets and shift the foundation of aggregate demand from wages to dividends, rents, royalties, and other returns on capital. This isn't about abandoning market principles; it's about making them work in an era where human labor is no longer the primary scarce input.
How do we achieve this? PLE proposes a pragmatic, decentralized approach centered on subsidiarity, focusing on the US county as the ideal scale for action. Counties already possess significant legal authorities – they manage land, issue bonds, run utilities, and enter partnerships. PLE envisions counties acting like mini-sovereign wealth funds, establishing County Endowment Funds. These funds would proactively manage local assets – not just obvious ones like land for solar farms or mineral rights, but also previously under-monetized assets like public rights-of-way for fiber optics, royalties from data center operations hosted locally, carbon sequestration credits from improved land management, or even revenue streams derived from local cultural heritage and tourism initiatives. Crucially, this relies on existing legal tools like public trusts, cooperatives, and standard lease or royalty agreements, minimizing the need for radical legislative overhaul.
But simply creating funds isn't enough. We need to know if they're working. This brings us to the maxim: "what gets measured gets managed." PLE introduces a suite of transparent, publicly derivable metrics to provide this crucial feedback loop. The cornerstone is the Economic Agency Index (EAI). Unlike GDP which measures output, or Gini which measures inequality, the EAI measures the composition of household income within a county – the ratio of Wages to Property income to Transfers. A rising EAI indicates a healthy shift towards income generated through work or ownership, while a falling EAI signals increasing dependence on potentially unsustainable external transfers. Complementing the EAI are the Collective Purchasing Power (CPP) index, measuring disposable income plus local dividends to gauge sustainable local demand, and the County Custodianship Index (CCI), assessing quality of life factors like environmental stewardship, governance transparency, and local amenities.
These metrics power a "Measure -> Menu -> Monitor" cycle. Counties measure their baseline using the EAI/CPP/CCI dashboard. They then select interventions from a curated "menu" of proven options – drawn from real-world successes like Alaska's Permanent Fund, Chattanooga's municipal fiber co-op, Colorado's ESOP tax credits, Paducah's artist relocation trust, or rural energy cooperatives. The menu offers diverse paths, allowing counties to leverage their unique local strengths, whether it's abundant sunshine, a rich cultural history, or potential for data infrastructure. Finally, they monitor the quarterly updates to the dashboards to see the impact of their choices and iterate accordingly.
A critical question is why the capitalist class – from local business owners to VCs to global billionaires – would support a system that channels returns back to residents. The answer lies in aligned incentives and risk mitigation. For businesses, securing "willing wallets" – customers with spending power – is paramount as wages decline. Participating through mechanisms like patron-equity or data royalties becomes a competitive necessity for customer retention. For large-scale investors, including potentially billionaires like Bill Gates or Elon Musk, PLE offers stability and reduced risk. Investing in county endowments via non-voting County Capital Units provides access to diversified, potentially stable, low-correlation returns backed by real assets, functioning much like an infrastructure or ESG fund. Furthermore, partnering with counties (e.g., paying royalties for a data center or fusion plant) enhances their social license to operate, drastically reducing permitting friction and local opposition – a significant cost saving. This structure ensures that as their projects succeed and generate surplus, the local dividend automatically rises, creating a win-win rather than an extractive relationship.
Of course, challenges exist. Ensuring good governance across thousands of county funds, preventing capture by local elites, managing potential housing bubbles in successful counties, and addressing the risk of widening inter-regional inequality require robust guardrails. PLE anticipates these with built-in mechanisms like vesting periods for resident shares, NAV-based buy-ins for capital units, dividend smoothing buffers, diversification rules, and stringent transparency requirements. States play a crucial role in setting these minimum standards and potentially facilitating equalization.
In conclusion, Post-Labor Economics offers a comprehensive, pragmatic framework for navigating the profound economic shifts driven by automation. It provides a new lens (EAI, CPP, CCI) to understand local economic health, a menu of proven, market-compatible interventions focused on broadening ownership, and a decentralized, bottom-up implementation strategy centered on county-level agency. It aligns the interests of citizens, government, and capital towards sustainable local prosperity, ensuring that the benefits of automation are widely shared, not narrowly hoarded. It’s not about abandoning capitalism, but about adapting it – creating its next operating system, grounded in shared ownership and empowered local communities, ready for a future where work as we know it may no longer be the center of economic life.
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