We don't need to just make up fantasy stories

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Every few months, someone writes a viral post about how AI will destroy the economy. It looks like that’s just our lives now...This month it’s Citrini Research’s “THE 2028 GLOBAL INTELLIGENCE CRISIS” (yes, all caps, so you know it’s serious). The post imagines a 2028 scenario: AI automates white-collar work, companies collapse, private credit blows up, mortgages default, unemployment hits 10%.This Substack is reader-supported. To receive new posts and support our work, consider becoming a free or paid subscriber.Stocks fell earlier this week. People panicked, based on a random blog post.If you’re terminally online, you’re probably sick of hearing about this one already. I don’t want to go through point by point. Way too many people have already done that (and I’ll link some throughout.)But if there’s a niche here, Economic Forces is about taking that step back and thinking through the economics, through the price theory.So why do these types of arguments keep happening? How do they keep fooling smart people, but at the same time basically none of the economists fall for this line of thinking? More importantly, how can we avoid these pitfalls?As usual, basic economics can help us a lot. Because the Citrini post is not a new type of error. It’s the same error we see reading all sorts of news stories, this time dressed up in new clothes as fantasy. No economist or economics-adjacent person was blown away by it.We have a few basic principles that rule it out before the conversation starts. As usual, we don’t need to invent new theories every time a new technology comes along. T…