The parallel nobody is telling you
Venkatesh Rao, author of the Contraptions Substack, made a disturbing observation on October 25, 2026: today's panic around artificial intelligence and technological unemployment strikingly resembles the anxiety that accompanied the birth of capitalism. This is not a poetic analogy — it is a structural pattern that repeats throughout economic history.
Rao notes that mercantilist thought, which preceded industrial capitalism, rested on four interlocking beliefs. The most important: intelligence (and resources) were inherently scarce and needed to be tightly controlled by elites. The result of capitalism was a surprise to everyone: instead of creating a mass of useless people, it created a world where far more people could do things other than farm, while enjoying access to far more food and goods.
The parallel with our current moment is striking. The entire intellectual economy has been organized around the assumption that intelligence is expensive to produce and therefore must be carefully rationed. Education, professional expertise, research, consulting, software development — all shaped by the high cost of cognitive production.
But generative AI shatters that assumption. When the marginal cost of producing intelligence approaches zero, the entire cognitive economic system needs to be reimagined.
Intelligence economics as a revolution of desire
Mercantilist history ignored something fundamental: capitalism did not emerge because technology made production cheaper, but because it created a revolution in desire. People began to want new things. Peasant families who used to save on bread bought televisions, appliances, clothes. Demand expanded beyond any mercantilist predictability.
The same is now happening with intelligence. Rao argues that the real demand driver for AI is not big enterprises — it is prodsumers: professionals who use AI to create products they sell. An UI designer who uses AI to prototype interfaces she monetizes. A copywriter who uses AI to produce paid newsletters. A developer who uses AI to build micro-SaaS products.
These producer-consumers are the true growth engine of AI, and they are precisely the kind of person that cognitive mercantilists would consider "idle mouths" — someone who should be kept in a conventional job to contribute to the economy.
The human cost of anxiety
While thinkers like Rao draw historical parallels, the reality in Silicon Valley is more visceral. According to a June 2026 Bloomberg report, anxiety around AI is triggering mass burnout among technology workers. Matt Van Horn, a serial entrepreneur and father of four, has not turned off his laptop since he started using Claude Code — he runs more than a dozen AI agents simultaneously, and every ten minutes they ask him what to do next.
The irony is that the promise of AI was to liberate workers from cognitive manual labor. Instead, technology workers find themselves in a permanent state of alert, managing agents, competing with them, and fearing replacement by them. Anxiety does not decrease with productivity — it simply takes a new form.
Researcher Virginie Maisonneuve warned Bloomberg that entry-level jobs and white-collar positions will be the most impacted by AI. The number of employers expecting entry-level workers to be AI-competent has nearly tripled since late 2025, according to the National Association of Colleges and Employers.
Echoes of the past or a new paradigm?
The VentureBeat analysis on AI and employment shows that AI's impact on jobs is complex and multifaceted. The IMF's argument is that AI will follow the pattern of past technological revolutions: technology destroys existing jobs but creates new ones. The classic example: the automotive industry created 6.9 million new jobs in the United States between 1910 and 1950 — 7.5 million created, 623,000 destroyed.
But there are crucial differences. AI acts on cognitive tasks, not manual ones. This means it can outsource cognitive tasks potentially leading to more significant and widespread displacement than previous innovations. 74% of IT professionals expressed concern that AI tools will make "many of their day-to-day skills obsolete," according to a Pluralsight survey cited by VentureBeat.
Real cases already demonstrate this displacement: Swedish fintech company Klarna implemented an AI assistant that now handles two-thirds of the customer service workload that previously required 700 full-time staff. India-based e-commerce platform Dukaan fired 27 customer service agents and replaced them with a bot.
The fundamental difference between now and the past is speed. The agricultural revolution took centuries to consolidate. The industrial revolution took generations. The AI revolution is unfolding in months.
What happens next
If history really tells us anything, it is not that technological unemployment is inevitably catastrophic — nor that AI will simply be more of the same. History shows that the scarcity of intelligence, just like the scarcity of labor and energy, was broken by revolutions that nobody predicted. The question is not whether AI will destroy jobs, but who will be able to participate in the next expansion of cognitive consumption and who will be left behind in the transition.
Sources: Contraptions - Venkatesh Rao, Bloomberg, VentureBeat
✓ Independent sources cross-checked and verified before publishing
