Can Libertarianism Exist When AI Tales Over?

[Prince.Skeletor]

If humans can’t compete with AI labor loses all market value.
Wages would collapse. There would be no buyers for human labor which and the core mechanism of wealth distribution in capitalism breaks down

Owners of AI systems (likely a few massive corporations or individuals) capture nearly all economic value.

Capitalism relies on consumers with money
If most people can’t earn money, they can’t buy goods, and demand disappears.

Libertarian free market capitalism requires a functioning labor market. If AI makes labor economically useless, the ideological foundation of libertarianism then personal responsibility through voluntary labor exchange ceases to function. Either libertarianism adapts, or it gets replaced by a new paradigm like perhaps AI techno-feudalism, UBI-backed social democracy, or something entirely novel.

So there’s only two options:

AI Techno-Feudalism:
A future system where a small elite owns and controls the AI, data, and infrastructure, and the rest of society becomes economically dependent on them, not through wages, but through digital fiefdoms.
People’s access to food, housing, entertainment, or even purpose may be entirely platform-based (e.g., Meta, Google, Amazon ecosystems)

Or


UBI-Backed Social Democracy:
A more optimistic and humane vision where the productivity of AI is taxed or socialized, and the wealth is redistributed especially through Universal Basic Income (UBI) and expanded public services.
AI and automation are seen as public goods, and heavily taxed to fund social program

ChatGPT helped me with the tables below:

Feature	AI Techno-Feudalism	UBI-Backed Social Democracy
Economic Power	Concentrated in tech elites	Distributed via taxes and UBI
Human Labor Role	Largely obsolete and unneeded	Optional, but meaningful roles encouraged
Freedom & Autonomy	Limited; platform dependence	Expanded through economic security
Government Role	Weak or captured by corporations	Strong and redistributive
Outcome for Most People	Digital serfs	Empowered citizens

Which Countries are going where?

Country/Region	Current Trajectory	Model Leaning Toward
United States	Deregulated AI, Big Tech rule	AI Techno-Feudalism (with democratic pushback)
Finland	UBI trials, ethical AI	UBI-Backed Social Democracy
China	State-run AI, mass control	Authoritarian Techno-Capitalism
Spain	Minimum income, worker reform	UBI-Backed Social Democracy (early stage)
Singapore	AI in public life, state tech	Technocratic AI Social Capitalism
Sweden/Denmark	Tech + redistribution	Social Democracy w/ AI integration

 

[Roadside]

People still play chess and have chess tournaments even though computers are way better.

"AI makes labor economically useless" is a meaningless pie in the sky idea. People will always put a premium on something "human made" and there is no signs of AI doing any real improvements in physical jobs. Many people have now become millionaires streaming - playing videogames online - providing 0 "economic benefit beyond human entiertainment. Mr Beast is now a household name multi millionaire doing a job that didnt exist 20 years ago.

If AI becomes perfect and does all the computer jobs perfectly humans will just adapt the same way they did when machines took the majority of the farming jobs. Luddite - Wikipedia Luddites destroyed weaving machines because they were so scared that everyone would be put out of a job. People just got richer and moved on to better things.