AI and the Economics of Production and Consumption Breakdown

This report examines the potential for a structural break in the production-consumption cycle as AI shifts economic contribution from human labor to capital. While AI is expected to expand global output, the primary risk is a demand-side failure caused by the systematic transfer of income from high-spending workers to low-spending capital owners. The text argues that no non-human buyer can sustainably replace the mass household as the ultimate engine of consumption, making the redistribution of purchasing power a mathematical necessity rather than a moral choice. To prevent long-term stagnation, the economic loop must be reconnected through mechanisms like universal basic income, broader asset ownership, or a shift toward human-centric service demands. Ultimately, the transition to an AI-driven economy is less a technical challenge than a political-economic engineering problem focused on who owns the wealth generated by machines.