Firms may absorb incremental AI competence (better math, writing, coding) without much change, but if AI raises internal coordination enough, organizations can suddenly scale differently — producing abrupt increases in concentration, employment shifts, and wage patterns. That means the economic impact of AI could be lumpy and hinge on whether organizations cross a coordination threshold, not just on algorithmic performance.
— If true, policy should focus on organizational effects (antitrust, labor adjustment, industrial policy) and not only on capabilities or model safety — because crossing a coordination threshold could rapidly reshape markets and politics.
Arnold Kling
2026.11.14
100% relevant
Alex Imas and coauthors’ competence vs coordination essay, which Kling highlights as the key framing that determines when the economy transforms.
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