Editorial
The AI revolution isn't coming — it's here. While organizations race to implement AI for competitive advantage, a larger transformation threatens the foundations of liberal democracy itself. AI is systematically eroding free markets (through labor automation) and weakening representative democracy (through information manipulation).
This four-part series will map the emerging experiments worldwide that could reshape capitalism and democracy for the AI era. We examine eight possible societal endpoints and propose a path forward — Markets With a Social Purpose — where AI handles production while humans are rewarded for activities that build social capital.
For business leaders, the societal model that emerges will determine your future operating environment, talent pools, consumer bases and social license to operate.
The Interregnum: The Liberal Order Under Algorithmic Pressure
Liberal open societies rest on two great pillars, free markets and representative democracy, that have enabled innovation and prosperity for centuries. Liberalism decentralizes power and lets diverse ideas be tried in the wild, and those that meet human needs be scaled. This openness helps prevent society from being captured by elites; in theory, anyone with a good idea can get resources in the market or votes at the ballot box. But what happens when a new force, artificial intelligence, starts to corrode those pillars?
Today's AI revolution, in time, may systematically undermine both free markets and democracy.
Political campaigns, once a contest of two grand narratives, are already becoming micro-targeted information wars. Each voter can be bombarded with a bespoke narrative tuned to their fears and hopes, a strategy already glimpsed in scandals like Cambridge Analytica. As one digital democracy analyst put it, we risk a future where elections are "no longer a free choice by informed, rational individuals, but information warfare between well-funded parties." In such a world, genuine democratic debate is drowned in disinformation and echo chambers.
Meanwhile, free markets are being upended by the AI-driven obsolescence of human labor. Automation is rushing in to handle tasks like factory work, customer service, driving, working 24/7 without pay or coffee breaks. Various studies estimate that between 30-45% of jobs could be automated by 2030, and AI experts like Kai-Fu Lee predict 40% of jobs might disappear within 15 years.
Unlike past technological revolutions, AI isn't just replacing muscle jobs while creating new ones; it's coming for brain jobs too, and doing them at superhuman scale. The result? We may simply not need the bulk of humans for "economic labor" in the traditional sense. By mid-century or sooner, machines could generate most goods, services and even innovations.
Related Article: 10 Jobs Most at Risk of AI Replacement (And How to Transition)
A World With Money But No Meaning
The immediate answer that many offer is Universal Basic Income (UBI), taxing the robot/AI economy to give everyone a stipend. Yet, as a long-term social contract, UBI alone may be a flimsy patch.
Yes, Finland's 2017-2018 basic income trial showed higher life satisfaction for the unemployed who received payments, and large UBI pilots in Kenya are empowering the poor without reducing work effort. Even a Brazilian city, Marica, is rolling out an oil-funded basic income to 50,000 residents. But simply paying people to do nothing has dark side-effects.
Humans derive purpose and dignity from contributing. A lifelong "paid vacation" for the masses could yield a dystopia of aimlessness — what one might dub a “Hobbesian leisure trap” (think of it as similar to how unlimited holiday policies can paradoxically reduce employee satisfaction). Worse, our morality, which is always in flux, has historically been shaped by the need to compete either militarily or in commerce. With this shaping force removed, one might expect morality to evolve from successful behaviors to virally contagious ones.
A New Type of Liberalism for the AI Century
In short, AI is testing liberalism's adaptive capacity like never before. It is already centralizing economic power and increasingly centralizing political influence, to those who control the data and AI. Left unchecked, we could drift into what might be called a "Manipulated Marketocracy," a society in which both the market and the polity are dominated by algorithmic gatekeepers and curated illusions.
In that grim scenario, democracy becomes a hollow ritual, and markets become a playground for AI-enhanced monopolies. Government might be forced into massive welfare taxation (90% of GDP, as one analysis warned) just to prevent social collapse, all while true liberal freedom and dynamism would lay in tatters.
The good news is that this future isn't written in stone. Liberalism has reinvented itself in the past; from laissez-faire in the 19th century to social welfare states in the 20th, and it can evolve again. To prosper in this transition, we must understand why Liberalism has worked and find a way to put new wine in old bottles.
To thrive in the era of AI, our notions of markets and governance will need a reboot. We'll need to prevent "elite capture" by a new AI aristocracy and ensure these technologies align with broad human purposes. That means experimenting, now, with new models that preserve our open democracies while redefining how we earn a living, how we govern ourselves and how we guard the truth. Fortunately, around the world, a motley crew of pioneers are already trying to chart possible paths.
Related Article: AI Won’t Adopt Human Morality — It’ll Build Its Own
Early Prototypes of an AI-Era Economy
Across the globe, innovators are responding to technological upheaval with bold social experiments. These range from new ways of providing income and services, to new democratic processes, to new tools for fighting disinformation. Each offers insight into how we might reinvent market and democratic institutions for the 21st century. We can group these experiments into three themes:
- Economic innovation
- Governance innovation
- Information integrity
UBI Pilots Offer Clues — and Warnings
In recent years, several countries have piloted no-strings cash stipends to residents.
Finland's government ran Europe's first major Universal Basic Income experiment in 2017–2018, paying 2,000 unemployed people €560 a month. The outcome? Employment didn't significantly increase or decrease, but recipients reported less stress, higher life satisfaction and better wellbeing than the control group. It turns out that removing the bureaucratic hurdles of claiming unemployment benefits and guaranteeing a basic income floor can improve people's mental health, even if it doesn't magically get them new jobs.
Over in Kenya, the charity GiveDirectly is in the midst of the world's longest UBI trial, a 12-year program providing villages with a basic income. Two years in, the findings are heartening: people did not become lazy or wasteful; in fact, they invested in businesses, earned more and didn't quit working. Long-term security encouraged risk-taking and entrepreneurship.
In Brazil, the city of Marica (population ~157,000) is going beyond pilots to implement a municipal basic income for tens of thousands of residents, funded by local oil royalties. The program gives 130 reais (US$64) per person each month via a local digital currency (the Mumbuca), which equates to roughly 75% of Brazil's poverty-line income.
These UBI experiments suggest that, when done right, a universal basic income can reduce poverty and stress, but questions remain about scaling costs and keeping people motivated and connected without traditional jobs.
Providing Needs Instead of Cash
Another approach says, if AI-driven abundance lets us meet everyone's needs, why not guarantee essential services directly instead of cash? In the UK, researchers and activists have proposed Universal Basic Services (UBS) as a complement or alternative to UBI. The idea is for government to ensure free access to things like healthcare (already covered by the NHS), education, public transport, internet connectivity and housing support — the basics one needs to lead a decent life.
While the UK hasn't implemented a UBS package nationwide, elements are appearing. For example, Wales and some English cities are experimenting with free universal meal programs and transit passes for youth.
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Tallinn, Estonia, made all public buses, trams and trains free for city residents in 2013, aiming to boost mobility for low-income people and reduce car traffic. The ridership did increase, though car usage fell less than hoped.
These experiments test the principle that in a wealthy, AI-productive society, people might benefit more from guaranteed basic goods and services than from cash alone.
Related Article: Can AI Transcend Our Universe? Training Machines on Alternate Realities
Preston’s Blueprint for Economic Resilience
In some places, innovation is coming from the ground up by exploring how local economies are structured. The Preston Model in Preston, England, is one famous case of “community wealth building” (essentially keeping economic value circulating locally rather than extracted to distant shareholders).
After the 2008 crash, local inward investment collapsed, and so this formerly struggling city adopted a new strategy: leverage the purchasing power of local institutions (like the city council, police, university) to buy from local businesses and cooperatives. Between 2012 and 2017, Preston's anchor institutions redirected hundreds of millions of pounds to local suppliers, raising the local procurement from 39% to 79% of their spending. That £200 million boost created jobs and earned Preston recognition as the UK's "most improved city."
Preston also fostered new worker cooperatives, drawing inspiration from Mondragon in Spain. Mondragon itself is a legendary example: a federation of cooperative businesses founded in the 1950s Basque region, it grew to over 70,000 worker-owners and billions in revenue, making everything from appliances to finance. In Mondragon co-ops, workers collectively own the firms and cap top pay ratios, often to no more than 6:1 between highest and lowest salary.
Preston hasn't become Mondragon overnight, but its experiment shows how regional economies might adapt in a post-AI era by focusing on local resilience, cooperative ownership and keeping the fruits of automation circulating within communities.
Alternative Currencies for Economic Stability
Another set of economic experiments reimagines money itself. The island of Sardinia, Italy, did exactly this after the 2008 crisis. Sardinia's small businesses were starved of euros, so in 2009 some entrepreneurs launched Sardex, a “mutual credit system” (essentially business-to-business barter with a digital ledger). Local businesses join the Sardex network and can trade goods and services with each other in Sardex credits (1 Sardex = €1) without using cash. Over a decade, Sardex blossomed to 3,200 member companies with €51 million worth of transactions circulating in the Sardinian economy.
The WIR Bank in Switzerland is a similar older system: since 1934 it has run a parallel currency for small businesses (the WIR franc), which today has 50,000+ business members, about 17% of all Swiss SMEs, trading the equivalent of 1-2% of Switzerland's GDP in WIR credits each year. During recessions, WIR activity spikes, helping firms stay afloat when Swiss franc loans are scarce; it acts as a counter-cyclical source of liquidity cushioning the locality from global economic storms.
These types of economic models could inspire future "AI dividends" currencies or local tokens that distribute the gains of automation to people who contribute to society in non-traditional ways.
Moving Beyond GDP as the Only Scoreboard
Finally, some governments are reframing economic success altogether. Tiny Bhutan famously rejected GDP as the supreme metric, instead adopting Gross National Happiness (GNH) as its development compass.
Since 2008, Bhutan's constitution has enshrined GNH, and policymakers use a GNH index and screening tools to judge major decisions. The index includes good governance, cultural preservation, environmental conservation and mental wellbeing. For example, any new policy (a hydropower project, an education reform) is assessed for its impact on citizens' happiness and the environment; policies that flunk the happiness test go back to the drawing board.
In New Zealand, the government of Prime Minister Jacinda Ardern launched the world's first Wellbeing Budget in 2019, explicitly aiming "to put people's wellbeing and the environment at the heart of policies." New Zealand's Treasury developed a Living Standards Framework with indicators like mental health, income distribution, environmental quality and social connection. Budget proposals must articulate how they improve wellbeing in these dimensions, not just GDP.
As Ardern said, "GDP alone does not guarantee improvement to our living standards, citizens' health and life satisfaction, is the metric by which a country's progress should be measured," not just wealth. The practical upshot was New Zealand's 2019 budget poured new funds into mental health services, child poverty reduction and Maori and Pasifika community programs.
This shift toward "wellbeing economics" aligns with a future where providing economic security is necessary but not sufficient; the ultimate goal is improving quality of life. If AI means material plenty with fewer workers, societies can take the opportunity, and must out of necessity, focus on health, education, art, sport, learning and community as ends in themselves.
The New AI Economic Order
Through these economic experiments — UBI, UBS, cooperative models, new currencies and wellbeing metrics — we see pieces of a new AI era economic order emerging. They're about broadening the definition of value beyond just corporate profits or wage labor, and ensuring humans can thrive even if the traditional job-for-pay paradigm fades.
Not all will work, and certainly not all at once, but they offer building blocks for a future where new types of markets serve society, not vice versa.
Related Article: Social Purpose Markets: A Bold Solution for the AI-Driven Job Crisis
Strategic Takeaways for the AI-Transformed Economy
- Strategic Considerations: The shift from GDP to wellbeing metrics will fundamentally alter how investments are evaluated and regulations are crafted. Companies should begin tracking their contribution to societal wellbeing metrics now.
- Operational Impact: Local procurement requirements like the Preston Model are likely to spread. Organizations should map their supply chains for local alternatives and consider the strategic advantages of community wealth building.
- Talent Strategy: As UBI experiments scale, traditional employment incentives will weaken. Purpose and contribution will become primary motivators. Companies must redesign engagement models accordingly.
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